By Bianca Machain, Feb 25, 2025
What do you do when your home is reduced to ash? Where do you go?
That’s what many residents are asking themselves in places like Altadena and Pacific Palisades following the Palisades and Eaton fires. Following these blazes, rent prices have skyrocketed, while costs to rebuild average between $400-$600 per square foot.
In the 24-day burnings, these Los Angeles fires collectively destroyed 16,000 structures, claimed nearly 30 lives and burned approximately 37,000 acres in total. For many residents, the devastation has not ended.
The overall supply and demand chain in housing and building material is disrupted with fewer homes available. On the one hand, there are residents who no longer want to live in the affected areas, believing it may happen again. At the same time, there are tenants who yearn to rebuild their homes where they began them. Ekaterina Chernobai, a finance, real estate and law professor, said the people affected have their whole lives there, further explaining they have their jobs, kids’ schools and childhoods in those areas.
“That’s the kind of life they know,” Chernobai said.
Carsten Lange, a Cal Poly Pomona economics professor, said landlords are experiencing windfall profit, a sudden gain in profits and can benefit from this tragedy. However, the economic consequence is that tenants whose homes are still standing experience a rent increase. In the affected and surrounding areas, rent has jumped as much as 90% higher than before the fires.
The Disaster penal code section 396 says that in a state of emergency, it is illegal to raise the price of essential items, one of which is housing. There has been significant outrage regarding how landlords have engaged in price gouging following the fires with some landlords being hit with fines as high as $50,000. Despite the fines meant to deter the unfair price increases of essential items, including housing, in the state of emergency, there are steady reports of price gouging, between Jan. 7-18, price gouging reports rose 5065%. Some Southern California citizens are even calling for arrests to be made for these price-gouging landlords.
The Disaster penal code section 396 says that in a state of emergency, it is illegal to raise the price of essential items, one of which is housing.
Another problem that many residents are facing is inability to rebuild if their insurance was cancelled prior to the fires. Many reports of canceled fire policies came in shortly before the blaze began, and numerous reports following up after the fires came as well.
Chernobai and Lange agree that homeowners should have the right to buy fire insurance.
“If you don’t have fire insurance, then you don’t have the means to replace a house, regardless of how you got your first house,” Lange said.
As of January 10 2025, California has banned insurance companies from canceling the fire policies of those in the path of destruction. This temporary ban will last a year to help homeowners in the home recovering processes.
Lange explained many of the destroyed homes were inherited, thus the cost of building is higher than anticipated.
For those looking to rebuild, according to Chernobai, construction of their homes is pertinent to their safety. The design choices saved some homes from burning while the rest of the o neighborhoods turned to ashes. The architect Greg Chasen said designer choices such as concrete perimeters and tempered glass windows are reasons the home in Pacific Palisades remains undamaged.
Even with the possibility of rebuilding, fire victims are left wondering what measures will be taken to ensure this never happens to anyone else. With recently imposed tariffs, the price of construction materials will increase, Chernobai said. Interest rates are also on the rise, with mortgage interest rates floating around 6%.0-6.8% as of February 2025. These additional costs will affect residents’ abilities to rebuild or even relocate.
Amiyah Ellsworth, a political science student, is vocal that the state and local government have to help the fire victims.
“It’s disappointing that people take advantage of those in awful situations,” Ellsworth said. a “But it is vital that our officials provide aid to those affected.”
The time and resources that will be spent on proper reconstruction are fundamental to avoiding similar tragedies. For those affected by the fires, resources are available.
Feature image courtesy of Victoria Mejicanos