Demand for temporary housing likely to push up rent prices
As thousands of residents displaced from Los Angeles County wildfires look for temporary housing, rent and home prices are likely to rise, local economists predicted.
Expect to see demand soar for hotel rooms and short-term rentals.
See also: Free and discounted accommodations for wildfire evacuees
“We know there’s a chronic shortfall of housing in the region and the state as a whole,” said Robert Kleinhenz, director of Cal State Long Beach’s Office of Economic Research. “Clearly, this loss of existing housing in these various communities is only going to make a bad and chronic situation somewhat worse.”
Since the firestorm began five days ago, tens of thousands of people evacuated homes in the path of the larger Palisades and Eaton fires. Beyond short-term rentals and hotel rooms, residents who lost homes will be looking for new lodging.
Rental vacancy rates could drop, and average rents could rise as much as $200 to $300 monthly, if the loss of housing gets worse, said Richard Green at USC’s Lusk Center for Real Estate.
“There are a lot of well-to-do people who are going to be looking for rental property now, and landlords know that,” added Adam Rose, a professor at USC’s Sol Price School of Public Policy who studies the economics of disasters.
So, they’re likely to raise their rents, possibly displacing current tenants so they can charge more.
“That would be a terrible outcome, but it could happen,” Rose said.