The wildfires sweeping through Los Angeles are likely to exacerbate the region’s housing affordability crisis now and in the future, housing analysts and advocates said.

Rents will rise, especially near the epicenter of the massive fires around Pacific Palisades and Altadena. Anyone planning to rebuild a home will face stiff competition for contractors. And the impact on the shaky home insurance market could lead to increased costs for all Angelenos.

“It’s going to happen quickly,” Stuart Gabriel, director of UCLA’s Ziman Center for Real Estate, said of the impact of mass evacuations on pushing up housing costs. “It’s hard to quantify. I don’t think anyone knows what that number is.”

Although the destruction is a small percentage of Los Angeles County’s 3.7 million homes, the impact is significant on available supply and likely to get worse as fires continue to burn with little or no control. As of Thursday afternoon, fire officials estimated the Palisades and Eaton fires had destroyed more than 9,000 single-family homes, apartment complexes, businesses and other structures. For comparison, in 2023, the last full year of U.S. Census data available, 24,300 residential units, including apartments and condominiums, received building permits in Los Angeles County.

Larry Gross, executive director of the tenants’ rights group Economic Survival Coalition, said he is concerned that thousands of relatively wealthy refugees are being squeezed into the region’s tough rental market.

He said some landlords will likely try to take advantage of the situation by raising rents and evicting tenants in favor of displaced homeowners who can pay more. state price gouging rules The goal is to prevent such situations, but Gross said more steps need to be taken to ensure enforcement.

“We need to think outside the box,” he says. “Both state and city officials need to take action to ensure this crisis is not amplified by profiteers.”

Analysts said the fires will add myriad stressors to Los Angeles’ housing problems, many of which are already at risk of worsening. More than 65,000 homeowners in Los Angeles Insurance contract not renewed State officials had hoped new regulatory changes would lure insurers back into high-risk areas. Faced with huge losses from fire – initial estimates were Damages amount exceeds $50 billion — Companies may move away Or raise premiums not only for homeowners and homeowners but also for rebuilding others throughout the region, said Richard Green, director of the USC Rusk Real Estate Center.

“No one knows what the insurance companies will do in the aftermath of this,” Green said.

Rebuilding housing will face additional challenges, contested between a limited supply of contractors and a dwindling construction workforce, a key factor maintaining the low level of housing production in Los Angeles pre-fire. That’s a factor, he said.

“There is already not enough,” Green said. “That was one of our problems.”

Gabriel said that to get people into new housing, Los Angeles needs to revolutionize its lengthy permitting process for development, which should have been an urgent call even before the fires.

In 2023, he co-authored a study showing that it will take time. It will take nearly 5 years to complete The average unit in an apartment complex, and a significant portion of its time involves bureaucratic approval.

“These homeowners and the city cannot afford to wait five years to rebuild these homes,” Gabriel said.

He called on Mayor Karen Bass and the City Council to create a streamlined approval process for homeowners affected by wildfires and use it as a model for system-wide change.

The devastating fires have made solving the city’s housing problem difficult, but it remains important, Gabriel said.

“Addressing the availability of affordable housing is critical if the City of Los Angeles wants to remain competitive with many other metropolitan areas nationally and internationally,” he said. “If the city fails in this regard, there will be new reasons for families and businesses to look elsewhere.”

Times staff writer Andrew Khouri contributed to this report.