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California Wildfires Heat Up Housing Crunch

California Wildfires Heat Up Housing Crunch

Areas of California affected by wildfires may have an inadequate supply of emergency housing for victims because those markets were already facing severe inventory shortages, industry experts warn. The fires have torn through Northern California’s wine country, destroying thousands of homes and businesses. In particularly hard-hit Santa Rosa, rents are already among the highest in the country. Inventory shortages and skyrocketing home values there may leave displaced homeowners with few options while their houses are being rebuilt. Prior to the fires, the Santa Rosa apartment occupancy rate was 96.5 percent, according to RealPage data.

Burbank Housing, Sonoma County’s largest operator of affordable housing units, had 15,000 people on its waiting list for low-income apartments even before the fires began, CEO Lawrance Florin told Bloomberg. That number will undoubtedly swell and put even greater pressure on an already tight rental market.

Florin says he hopes the fires prompt state and local politicians to revisit their restrictions on new construction. Some critics blame restrictive state and local zoning regulations for making new-home building too pricey and time-consuming across the state. “There’s the possibility that as folks start to rebuild, they do so with higher density and more units,” Florin says.

Housing shortages have been common across the country, and a natural disaster can make it even worse, says Nela Richardson, chief economist at Redfin. “The housing system can’t handle the shock,” she says. “Any event—even a big rainstorm that floods out several basements in a neighborhood—something as trivial as that can overwhelm the system.”

The fires continue to burn in California, with more than 221,000 acres of land and an estimated 3,500 homes and other structures destroyed, according to the California Department of Forestry and Fire Protection. At least 40 people have died in the wildfires.

Source: “Deadly California Fires Stretch an Already Tight Housing Market,” Bloomberg (Oct. 13, 2017)

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