Rents Soar Near Wildfire Zones as Housing Shortages Worsen
Rents and home prices near the Southern California wildfires are rising as the housing market in the area, which already lacked affordable options, tries to absorb thousands of newly displaced families.
Nearly 13,000 homes and thousands of commercial properties were destroyed in the January fires, one of the costliest natural disasters in U.S. history. The Apartment List Rent Model tracks multifamily rent changes in real time, and the company has been following trends in the markets affected by the wildfires.
Anecdotes of price-gouging abounded in the immediate aftermath of the fires, causing regulators to enact emergency legislation to curtail this behavior. Still, Apartment List said the underlying fundamentals in the market will continue to drive up housing costs. In addition, housing prices typically rise from January through August due to seasonal demand patterns.
However, in a few cities near the wildfires, rent increases are on pace to exceed those of previous years, including 2021 and 2022, when rent growth broke records. Santa Monica, Glendale, and Pasadena are among the markets where these price increases have been noted.
According to Apartment List, rents across Los Angeles are up a modest 0.7% this year. However, rents are up 3% in Santa Monica through February and 2% in Glendale and Pasadena.
“Similar rent growth is also being measured in Ventura County, which has exploded in popularity during the pandemic era,” said the report. “Rents across Southern California will certainly continue to go up in the coming months, as normal seasonal trends are accelerated by housing shortages that have been exacerbated by the wildfires.”
Apartment List noted these rent figures reflect large multifamily properties listed on its platform and may differ from single-family home rentals and smaller portfolio rentals.
Source: GlobeSt/ALM