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 and businesses.
“Our housing market was impacted prior to the devastating fires in Sonoma and Napa Counties. Available inventory has been an issue for 4 or 5 years so with the loss of another 8 to 10 percent of our housing units it will be years before we see a balanced market again. Many economists are predicting 4 to 5 percent increases in property values over the next 3 to 5 years. My hope is that people, with the assistance from our government, will be able to rebuild quickly and in a cost effective manner.” – Bill Facendini, President and Broker
Making sense of the story:
- 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.
- 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.
- 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.”
- Housing supply is short across the entire Bay Area. Displaced homeowners looking to relocate would find the most comparable home values to Sonoma County in Contra Costa County, to the east of San Francisco, Trulia’s Ralph McLaughlin said. Renters may have to travel as far as San Benito County, south of San Jose, based on comparable rents. Meanwhile, the onslaught of permit applications and heightened demands on construction labor will likely lengthen the rebuilding process.
Published on 2017-11-02 06:20:33
