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As fires continue to burn in and around Los Angeles, burning more than 40,000 acres, destroying more than 12,000 homes and other buildings, and killing at least 25 people since last week, two things are clear. It is becoming. California must rebuild quickly. Rebuild it another way.
Housing affordability and availability in Los Angeles, and broader California, was already in crisis before the fires.
Since January 7, tens of thousands of families have been forced to evacuate and are scrambling to find a place to stay. Many people, willing to pay large sums of money to stay in the area, were stunned to discover that there were virtually no rental options available.
The rental market in the area was already tense before the fire. According to an analysis by KoStar Group, the vacancy rate (meaning the percentage of rental housing units that are vacant and vacant) is 2.1% in western Los Angeles County, currently affected by the Palisades fire, and in Pasadena, where Eatonville was located. It turns out that it bottomed out at 3.8%. The fire burns. The vacancy rate in Los Angeles as a whole was about 5%.
For larger apartments with three or four bedrooms, the rental options are even worse. Most new homes developed over the past decade are studios or one- or two-bedroom apartments, built with singles, couples without children, and adult roommates in mind.
“If you live in a city that hasn't historically allowed family housing, it doesn't matter how much money you have,” said Matt Lewis, communications director for California YIMBY. ” he said. “Fires have always been thought of as something that happens to other people.”
However, the impact on housing goes far beyond the immediate needs of evacuees. Faced with mounting losses from increasingly severe climate disasters, insurers have raised premiums across the state in recent years and renewed coverage for about 3 million homeowners in vulnerable areas. I'm refusing. (The state updated regulations to force more insurance companies to cover homes in fire-prone areas, but those changes went into effect just before the recent fires.)
As a result of losing insurance, many newly uninsured homeowners turned to California's FAIR Plan, a last resort that provides limited home insurance at a high cost. FAIR plans are not publicly funded, so if their reserves and reinsurance are depleted, insured homeowners in the state will pick up the cost.
“All policyholders, not just FAIR plan policyholders,” could be at risk from fires, said Dave Jones, director of the Climate Risk Initiative at the Center for Law, Energy and Environment at the University of California, Berkeley. told Vox.
In other words, all Californians could face premium increases next year, potentially making living costs even higher in a state that is already among the least affordable.
These wildfires could be a tipping point for California's already unstable housing ecosystem. As insurance premiums soar, current residents and prospective home buyers alike are faced with an impossible choice. They can absorb rising costs, give up their property or leave the state altogether.
Years of warning about this scenario have proven prescient. Policy decisions in the coming months will determine whether the state is able to stabilize its housing market or whether the fires trigger a wave of foreclosures, homelessness and exodus unprecedented in California history.
California politicians have so far taken small steps to make it easier to rebuild homes quickly, but housing advocates say the time is now for bolder leadership: They argue that in addition to repairing damaged housing, we need to significantly increase the amount of fire-resistant housing. Homes and apartments in low-risk areas for people of all income levels.
On Sunday, California Governor Gavin Newsom issued an executive order seeking to waive permitting requirements under the landmark California Environmental Quality Act (CEQA), which notoriously hinders residential development. To quickly rebuild the property, Newsom also suspended permitting requirements under the state's Coastal Act, which guarantees protection of California's coastal resources, including beaches and environmental wildlife.
However, these flashy measures were not meaningful reforms. Single-family homes are already exempt from CEQA, and the Coastal Act already exempts the reconstruction of disaster-destroyed homes from general coastal permits. Legal experts were skeptical that this would lead to real change, especially since rebuilt homes must comply with zoning and building codes that have changed significantly over the years.
On Monday, Los Angeles Mayor Karen Bass followed suit with her own executive order calling for expediting the rebuilding of Pacific Palisades, but critics say the city's already delayed permitting The order says nothing about funding additional staff, citing staffing shortages as a contributing factor. .
Merely restoring what was lost, which would take years even with hasty permission, will not be enough to stem the growing crisis.
As insurance companies begin to deploy artificial intelligence to assess local climate risks and state insurance rules evolve to allow insurers to charge higher rates to policyholders for more vulnerable homes, fire and There will be more pressure to rebuild suburban housing to withstand other natural disasters. disaster. This will undoubtedly result in both construction and insurance costs being higher than before the fire.
These changes could force long-overdue changes in how and where leaders build their homes. That means moving away from fire-prone suburban sprawl and toward dense urban areas that are naturally more fire-resistant. But without the large-scale zoning changes that make this type of urban development possible, middle-class and working-class families, especially those who inherited homes in communities like Altadena and Pasadena, would not be able to afford it. The crisis could actually accelerate displacement, as people are forced out of uninsured areas. go.
Dowell Myers, a policy and planning professor at the University of Southern California, told Box that there is still no good data on how long-time residents who inherited their homes have endured higher insurance premiums. The average annual cost of homeowners insurance in the state has soared to $3,100, a 62% increase compared to the national average, and double-digit increases in some coastal and interior California regions. facing an increasing rate.
To build housing for people who can't afford soaring insurance premiums or multimillion-dollar homes, advocates are urging policymakers to build homes in densely populated, relatively fire-resistant cities that are already They want to make it easier to build homes in locations with up-to-date building codes and rapid emergency response. Time to minimize risk, mandated sprinkler systems, and updated infrastructure.
Communities need to rebuild in different ways, faster and more densely than before.
A bill introduced by California lawmakers in 2020 would have exempted infill housing from CEQA, but it died in Congress. Lawmakers could reintroduce it and pass it quickly, and advocates are urging Newsom to support such a measure.
“The real challenge is that we're so slow in tackling this that we won't actually solve the problems of people who need housing today,” said California's Lewis Inbee. spoke. “This crisis will no doubt spill over into other states. People who are unwilling or unable to rebuild will find themselves without a place.”
Increasing barriers to homeownership
While fires have taken a toll on homeowners, this crisis has made the situation even more stressful for renters.
The ripple effects of California's insurance crisis could extend far beyond current homeowners, exacerbating an already severe home affordability crisis. For renters, who make up more than half of Los Angeles County residents, the impact could be devastating.
The insurance crisis is having a “three-pronged impact” on housing affordability, as Noah Patton, disaster recovery manager at the National Low Income Housing Coalition, puts it. Rising insurance costs have brought more potential buyers into the rental market, increasing demand. Meanwhile, landlords are passing these costs on to tenants through rent increases, and developers are helping to finance new affordable housing projects in disaster-prone areas that are “in dire need.” I'm having a hard time.
California is particularly at risk, with nearly 186,000 people already living on the streets or in shelters, an 8% increase from 2022. Homeless people are already exposed to the climate crisis and wildfire smoke, especially if they cannot shelter in place. For many households that spend more than half of their income on housing, even a small rent increase could trigger a chain reaction to eviction and homelessness.
Residents forced to evacuate due to fire may be allowed to temporarily live on their property in RVs, tiny homes, or other modular structures, but this stopgap solution is It does nothing to help the many Californians who still struggle to become owners or pay rent in the first place. .
“While many Millennials have been able to take advantage of record-low mortgage rates during the pandemic, young people continue to face a housing affordability crisis with sales showing little sign of improving. No,” Chief Darryl Fairweather said. Economist at Redfin. “Additionally, these devastating wildfires are occurring in Los Angeles, which already has one of the least affordable housing markets in the nation, with median home prices exceeding $900,000.”
