Skip to main content

The Camp Fire Is Creating California's Next Housing Crisis

With each passing day, the number of structures destroyed by the Camp Fire rises. The fire is easily the most destructive in California's history, unleashing a housing crisis of untold proportions. In the short-term, rents could spike, while over the longer term high costs could make any efforts to rebuild the devastated town of Paradise a pricy endeavor.
Cal Fire estimates show that at least 17,148 buildings have been swallowed by the Camp Fire’s flames. That’s nearly 4,000 more than the rest of the 5  most destractive California fires combined. There are tens of thousands of climate refugees living in temporary arrangements ranging from families’ and friends’ spare rooms and couches to hotels to shelters to tent cities in a Wal-Mart parking lot in Chico, located about 15 miles from the areas hardest hit by the Camp Fire. Rains are on the way  this week, which could send people in search of more firm shelter. 
There is nothing on the scale of the Camp Fire in modern American history, but if you want to find the closest analog for what comes next, the 2017 Wine Country Fires are it. They held the record of the most destructive fires in California history for all of a year, destroying thousands of houses and apartments in Napa and Sonoma counties. Rents spiked in the immediate aftermath, according to data compiled by Zillow at the time.
“We also saw an influx of homes that have never been rented before,” Aaron Terrazas, the company’s senior economist, told Earther. He noted that these properties were likely people’s vacation homes or short-term rentals that were opened up to people displaced by the fires. 
Terrazas said he expects to see rental prices in Chico and communities near the Camp Fire similarly rise in the next 2-3 months. But that’s pretty much where the comparisons end, because the regions are so different. 
“Many people at least in Napa and Sonoma moved further afield into the East Bay or San Francisco or even the South Bay,” Terrazas said. “There were a lot more option for people displaced from Santa Rosa [the city at the epicenter of the 2017 fires] compared to people displaced from the Camp Fire.”
Indeed, while the Bay Area is dealing with an affordable housing crunch, it still has more options than Butte County and the area near the Camp Fire. It also had to absorb dramatically fewer displaced people and lost far fewer housing units. In Butte County, the nearly 13,000 homes lost in the fire represent 13 percent of the county’s housing stock. There’s unlikely to be space for everyone who wants to stay in the immediate aftermath. That could mean the area never quite bounces back as people settle into places further afield, similar to what happened in the wake of hurricanes like Andrew, Katrina, or more recently, Maria, Harvey, and even Michael. The cost to rebuild could make the climb to recovery even steeper.
The median home value in Butte County is already about 9 percent higher than the national average (though it’s about 45 percent less than across California as a whole). But there are a number of factors that could make building new homes even more expensive, including trade and immigration policies put in place by the Trump administration. 

Comments

Popular posts from this blog

Some home shoppers are calling it quits, convinced that prices have peaked

Two years ago, Mike Saavedra moved to Southern California, equipped with a new high-paying healthcare job and a plan. The former Arizona resident would rent by the beach while becoming familiar with neighborhoods where he may want to purchase a house. But a few months after starting his search, the Manhattan Beach renter cut it off. It was, he decided, the wrong time to buy. “I definitely think home prices are slightly overinflated,” Saavedra, 48, said. And he thinks there’s a good chance they’ll fall. “I would kind of like to wait and see if that happens.” After nearly seven years of sometimes fevered price hikes, the Southern California housing market has  slowed markedly  in recent months. Sales have fallen from year-ago levels and price appreciation has shrunk. In Los Angeles and Orange counties, year-over-year price increases peaked at 8.2% in April and have declined every month since. In October, home prices in those counties rose 5.5% over th

Most Expensive U.S. Home Sale Ever: Billionaire Ken Griffin Closes On $238 Million New York Penthouse

A Manhattan penthouse is now the most expensive home ever sold in the United States. Hedge fund billionaire Ken   Griffin closed on an apartment under construction at 220 Central Park South this week for around $238 million. A spokeswoman for Griffin confirmed the sale, which was originally reported by Wall Street Jurnal  The deed is not yet available in city property records.  The figure destroys the previous New York City record of $100.47 million set in 2014; Computer billionaire Michael Dell was recently exposed as the owner of that penthouse in nearby ONE57. The prior national record was also set that same year when Barry Rosenstein, another hedge fund billionaire, purchased an East Hampton spread for $147 M. Since then, nine-figure sales have been largely concentrated in and around Los Angeles.  However, Griffin, with a net worth of $9.9 billion, is no stranger to massive real estate purchases. Just this week it came out that he spent $122 million on a London home    close

Los Angeles, Orange County home price gains smallest in 6 years

Two new home price indexes provide further evidence Southern California home prices are softening amid slower sales and rising inventory. The S&P/CoreLogic Case-Shiller Home Price Index released Tuesday, Jan. 29, shows house prices were up 4.4 percent year over year in November in Los Angeles and Orange counties. That’s the smallest gain since September 2012. Meanwhile, the separate and more comprehensive CoreLogic Home Price Index released earlier this month showed house prices up 5.2 percent from year-ago levels in Los Angeles County and the Inland Empire. House prices rose 3.3 percent in Orange County. Those are the smallest gains in L.A. and Orange counties since the summer of 2012 and the smallest gain in the Inland Empire since the summer of 2015. Case-Shiller figures show appreciation is falling in the nation as a whole as well. The firm’s National Home Price Index showed U.S. home prices up 5.2 percent in November – the eighth consecutive month of slowing home