More than 15,000 people are helping fight the fires in Southern California.
devastating wildfire The impact that has hit the Los Angeles area in recent weeks has further disrupted an already tight housing market, causing rental prices to rise, raising concerns about price gouging.
Authorities say more than 12,000 structures have been destroyed los angeles The area wildfires, which have affected Pacific Palisades and Altadena as well as the Malibu area. At least 27 people have died in the wildfire, which remains a threat as firefighters work to contain the blaze fueled by Santa Ana winds.
The fires have destroyed a large number of homes in those areas and due to the dynamic nature of the wildfires many people in the area are still under evacuation orders, leaving area residents looking for rental housing options the first to hit the market. In comparison, prices are increasing dramatically. A fire broke out.
“The wildfires have had a deep and far-reaching impact on the housing market in Los Angeles,” David Berg, founding partner of Compass, Smith & Berg Property Group, told Fox Business. “Entire neighborhoods have been devastated, displacing homeowners and placing enormous pressure on already limited housing inventory. Families who have lost their homes are urgently looking for rentals, creating a crisis.” “Demand is increasing in nearby communities.”
View of a Pacific Ocean beach property destroyed as a result of the Palisades Fire in Malibu, California on January 12, 2025. (Frederick J. Brown/AFP via Getty Images/Getty Images)
Redfin chief economist Daryl Fairweather echoed a similar sentiment, telling Fox Business that not only those who are currently seeking rental accommodation Look for higher rents, but “people whose leases are expiring soon may get a rent increase they didn’t expect.” Fairweather said high demand near fire zones is causing some residents to look for rentals farther away, such as Santa Barbara.
Joel Berner, senior economist at Realtor.com, told Fox Business in an interview that from Jan. 4 to Jan. 11, there were several ZIP codes near fire areas that saw a significant jump in rental prices after the fires. The 90403 ZIP code, which he said is in Santa Monica, southwest of the Palisades Fire, saw a 33.9% increase in rents. Another Santa Monica ZIP code, 90404, saw rents rise 23%, while Central Pasadena’s 91125 ZIP code also saw rents rise 20% over that period.
Berner noted that the data is still “noisy” as other parts of L.A. have seen week-over-week rent declines, and the full impact of the rental market will be available once we have a full week of post-fire data. Could be easy. Effect.
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A view of structures and homes damaged by the Palisades Wildfire in the Pacific Palisades neighborhood of Los Angeles on January 11, 2025. (Accel/Bauer-Griffin/GC Images/Getty Images)
California law limits price increases to 10% of the pre-emergency price in the wake of a declared emergency, and Attorney General Rob Bonta emphasized in a recent press conference that the anti-price gouging rules apply to housing and rentals. come into force.
Zillow, a real estate marketplace that includes rental listIt told Fox Business that it was responding to those affected appearing on our platform by “activating our internal systems to flag potential violations and removing listings with price increases that exceed the emergency limit status.” is taking action to help address price increases in rental inventory in areas. ,
“If renters see any potential violations, we encourage them to report the listing to Zillow and California authorities. We believe it is important for housing providers to follow local housing regulations, “That includes consumer protections against price gouging during and after a natural disaster, and we are providing resources to help them understand their responsibilities,” the statement from a Zillow spokesperson continued.
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Destroyed homes along the Pacific Ocean following the Palisades Fire in Malibu on Wednesday, Jan. 15, 2025. (Eric Thayer/Bloomberg via Getty Images/Getty Images)
Stuart Gabriel, a finance professor and director of the UCLA Ziman Center for Real Estate, told Fox Business in an interview that although homes in fire areas were generally fairly valuable, some residents may be older or have more modest incomes than they should. Those may be more affluent neighbours, as some of the residences are six or seven decades old. This could create challenges when they want to rebuild.
“You have to separate the value of the home from that of the occupants, and in the case of homes built in the 1950s and 1960s, clearly, the owners have wealth in the form of their housing equity – but they are not otherwise high-income families. “In fact, they may be quite modest income households and they may also be older households in many cases,” he explained.
“So it’s not at all clear that these families have the means or the financial capacity to pay back the necessary loans and engage in a rebuilding process that is going to be difficult and complex and will take some time and a tremendous amount of energy,” he said. . Added.
Chimneys stand amid debris after the Palisades Fire passed in Pacific Palisades, California on January 8, 2025. (Augustin Polier/AFP via Getty Images/Getty Images)
Gabriel said state and local officials are looking to work quickly on rebuilding similar structures in fire-ravaged areas, but he said there are likely to be changes in terms of density of buildings, use of fire-resistant materials, different landscaping . and other structural changes address fire risk,
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“There will be a rebuilding of these neighborhoods. It can’t happen – these neighborhoods are too valuable, they are too valuable. But it will take time to replace and restore the facilities and get these communities back to a new balance,” Gabriel said.
