Wildfires intensify the city’s already critical housing affordability issues, with rents soaring and residents struggling to find affordable homes.
The already strained housing market in Los Angeles has reached a breaking point after catastrophic wildfires ravaged neighbourhoods, deepening the city’s affordability crisis. With at least 24 fatalities and over 12,000 buildings destroyed, the fires have triggered an urgent need for housing, exacerbating the city’s ongoing rental challenges.
Before the fires, Los Angeles’ rental market was already in crisis, with a vacancy rate of just 5% and a median rent of US$2,299. But the destruction caused by the fires has escalated the demand for housing, leading to even tighter competition and rising costs. Patrick Michael, the owner of LA Estate Rentals, noted a sharp spike in inquiries, with up to 500 calls per day compared to pre-fire numbers. In a glaring example of price gouging, he pointed out that a Beverly Hills property’s rent increased from US$35,000 to US$40,000 following the fires.
The situation is most dire in areas hit hardest by the fires, where vacancy rates have dropped to as low as 2.1%. The demand for homes is particularly high in neighbourhoods such as Pasadena and western Los Angeles County, where displaced residents are seeking housing near their destroyed properties. With many people having lost all their belongings, the demand for furnished rentals has also increased, driving up prices even further.
The crisis is particularly severe for lower-income residents, many of whom were already struggling with high housing costs and rent burdens. These renters—who were spending over 30% of their income on rent—now face even steeper challenges as rental prices surge. Moreover, the lack of savings and inadequate insurance coverage means many displaced individuals are unable to cover the costs of move-in fees and deposits, further complicating their search for new homes.
Real estate data reveals that rental prices have surged across Los Angeles, with some listings experiencing price hikes of up to 30%. For example, a four-bedroom home in Santa Monica saw its rent rise from US$8,750 to US$12,500 after the fires, before dropping slightly to US$9,950. These price increases are most notable in high-end areas on the Westside, where landlords are capitalising on the heightened demand.
California law prohibits rental increases of more than 10% after an emergency is declared. However, the enforcement of these regulations has become a growing concern, as landlords continue to raise rents beyond the legal limit. Despite the state’s anti-price gouging laws, which impose heavy fines and possible jail time for violators, the practice persists, leaving many residents feeling helpless.
Additionally, homeowners in fire-prone areas are grappling with insurance policies that do not cover the rising costs of rebuilding or replacing belongings at inflated post-disaster prices. Some are even forced to pay for temporary rentals out of pocket while awaiting insurance claims.
As the rental market becomes increasingly competitive, many Los Angeles residents are being pushed out of the city altogether. The housing crisis shows no sign of abating, and solutions to the escalating problem remain elusive.
