Los Angeles Rental Market on Fire - Literally

It's 2AM. You've been rudely awakened by your neighbor frantically banging on your door.

You step outside to smell a strong charred scent as a cloud of dark, heavy ashes fills your lungs.

You look to your left, and then your right... everything is on fire.

You grab your kids, your dogs, and anything else you can find as you sprint towards the car.

The sound of a choppers wings pierce the sky as you hold back your tears.

My home will be ok. Everything will be ok.

Right?

The terrifying reality is, everything was not ok for over 200,000 Angelenos.

Over 11,100 homes damaged or destroyed. And more than 240 Apartment buildings eliminated.

As Los Angeles has faced a housing shortage of over 70,000 people over the last several decades, we are now faced with an unprecedented surge of homelessness.

People got desperate and landlords became hungry.

Apartments faced an increase in rent of around 15-20%.

That's about 2 years of rent increases in a matter or weeks.

Single-family homes saw rents jump 30-40%, making them virtually unaffordable for many displaced residents.

Real-World Analysis / Examples: (Brace Yourself)

• The observed rental property in Pasadena, just one month prior to the LA fires, was listed at $4,000 per month and jumped to $7,500 overnight! (thats a 53% increase)

  
  

• A single-family home in an unaffected area from the fire zones escalated from $5,000 to $8,000 a month.

  
  

While we're all in favor of the beast we call Capitalism, this is a step too far.

Legal Pushback: California doesn't technically have the authority to control rent increases on market-rate units. Lets take the business mogul's Edward Kushins and Willie Baronet who notably raised rents by 36% post-disaster.

LA County then responded by hiking the maximum fine for gouging landlords from $10,000 to a somewhat notable $50,000 fine.

The Economic Domino Effect: Housing wasn't the only sector feeling the burn.

• Insurance premiums for homeowners have soared, with some policies doubling post-disaster

• The rebuilding process faces massive hurdles from skyrocketing construction material and labor costs (mainly thanks to astonishing tariff increases and mass deportation efforts)

• Temporary shelters being overcrowded, and emergency housing is nearly impossible to find anymore.

  
  

Will Rent Decrease after the LA Fire Renters Gouging? (No.)

While it's a painful pill to swallow, and almost impossible to predict, some claim that Governer Newsom's extension of rent caps and eviction protections may help.

Understanding Los Angele's landscape and housing demand is essential to answering this question.

As a Permit Expeditor, it's safe to say that it will take an absolute minimum of 5 years to rebuild our city back to what it was. That means it will be at least 5 years of extreme housing shortages...

...Matched with the limited LA City topography, and you've got a wonderful recipe for some more tenant exploitation opportunities.

In Conclusion:

Just when we think we've got everything under control, we're quickly reminded that we are at the mercy of Mother Nature.

Humans are constantly in search of gaining more control--since control means stability and reliability. We realize that in a world as advanced as this, we can still fall prey to circumstances completely outside of our control.

All we can hope to do now is band together in harmony--for together, we are strong.

- Odysseas Lamprianidis

"Fortune Sides With Him Who Dares"