Wildfires exacerbate an already strained market, leading to astronomical rental rates and rising concerns over price gouging.

The housing affordability crisis in Los Angeles, already one of the most expensive cities in the United States, has worsened dramatically following devastating wildfires that have decimated entire neighbourhoods. The fires, which have killed at least 24 people and destroyed over 12,000 structures, have created an urgent need for housing, putting immense pressure on the city’s already limited rental market.

Before the fires, vacancy rates in Los Angeles were already critically low, with just 5% of apartments available for rent. The median rent for a property stood at US$2,299. But as the fires have displaced thousands, the demand for housing has skyrocketed. Patrick Michael, the owner of LA Estate Rentals, reported a surge in calls to his office, with inquiries reaching up to 500 per day, a stark increase from the pre-fire volume. He mentioned a recent case where a Beverly Hills property’s rental price was hiked from US$35,000 to US$40,000 after the fire, a move he described as “price gouging” and a result of the city’s intense housing competition.

The rental market has become particularly tight in areas affected by the fires, with some neighbourhoods experiencing vacancy rates as low as 2.1%. With many displaced individuals seeking housing close to their destroyed properties, demand has surged in areas like Pasadena and western Los Angeles County. Additionally, those seeking rentals are now increasingly looking for furnished homes, which come at a premium, as many have lost all their belongings in the blaze.

The wildfire’s impact is also being felt at the lower end of the market, where many residents who lost their homes are struggling to compete in a rapidly escalating housing market. Many renters are already “rent burdened,” spending more than 30% of their income on housing, and now face even greater challenges securing new homes due to rising rental prices. The lack of savings and insufficient insurance coverage is also complicating the situation for many, making it difficult to cover deposits and move-in fees for new leases.

Real estate data shows that Los Angeles’ rental prices have seen significant hikes since the fires began, with listings showing price increases of up to 30%. For example, a four-bedroom home in Santa Monica saw its rent jump from US$8,750 in November to US$12,500 after the fires before dropping slightly back to US$9,950. Experts suggest that this trend is primarily affecting high-end properties on the Westside, where landlords are experimenting with aggressive price hikes due to increased demand.

While California law prohibits rental price hikes of more than 10% following a declared emergency, there are growing concerns over the enforcement of these regulations. Despite the state’s anti-price gouging laws, which can carry fines and even jail time for violators, the growing number of landlords raising prices remains a challenge.

Many homeowners, particularly in fire-prone areas, are also struggling with insurance limitations, which do not always cover the full costs of rebuilding or replacing belongings at the inflated post-disaster prices. Some homeowners have resorted to paying for new rentals out of pocket while waiting for insurance claims to process.

In this increasingly competitive rental market, many residents are finding themselves priced out of the city altogether, and Los Angeles’ housing crisis continues to intensify with no clear solution in sight.