The Eaton and Palisades wildfires that devastated California have been contained after almost a month. However, finding homes is a new difficulty for Southern California and state agencies.
With thousands of homes destroyed, billions in losses, and a worsening of the state’s housing and homelessness challenges, the flames caused substantial long-term harm. California already lacked 1.2 million affordable houses before to the disasters, with 500,000 units lacking in Los Angeles County alone.
According to Ryan Finnigan, an associate research director at the University of California, Berkeley’s Terner Center for Housing Innovation, this heartbreaking loss will undoubtedly exacerbate the housing situation in a number of ways. There is still a great demand for more affordable housing in Los Angeles, and those who have been evicted from cheap homes may require the greatest assistance in finding stable housing again.
In an already competitive market, where thousands of people are looking for homes at once, even those who are displaced from market-rate or high-end property will experience difficulties, which will probably drive up costs for everyone.
In addition to disrupting the home insurance market and decreasing housing options, especially for those with lower incomes, natural disasters are exacerbating the housing crisis in the United States. And if disasters increase in frequency and severity, that trend is probably going to continue.
Fires in California reveal that states’ last-resort insurance programs may be overloaded.
Experts caution that the fastest-growing cause of homelessness in the globe is climate change, which uproots millions of people each year. The Internal Displacement Monitoring Center reported in 2023 that 32.6 million people were displaced by disasters globally in 2022 alone.
The international think tank Institute for Economics & Peace estimates that by 2050, calamities might force 1.2 billion people to flee their homes worldwide.
The repercussions are already being felt.
Homelessness in Hawaii increased by 87% during the Maui wildfires in 2023. Experts estimate that California’s homeless population will increase significantly in 2025 as a result of flames in Los Angeles destroying around six times as many homes.
According to Jeremy Ney, a macroeconomics policy expert who researches inequality in America, natural disasters lead to a sharp increase in homelessness. Although preventing permanent homelessness is the main objective of aid groups such as the Red Cross, many people may not recover for ten years or longer.
The Migration Policy Institute estimates that 3.2 million individuals in the United States were evacuated or displaced due to natural catastrophes in 2022, and that by the end of the year, over 500,000 of them were still unable to return home.
It can take a long time to recover. According to NC Newsline, state officials in charge of Hurricane Helene’s recovery in North Carolina issued a warning that crucial federal financing for home reconstruction would be postponed for months, possibly until next fall.
When a disaster strikes, the Federal Emergency Management Agency, or FEMA, provides emergency shelters, disaster unemployment insurance, and rebuilding subsidies with an emphasis on providing short-term help. However, the long-term projects, including repairing infrastructure and creating housing programs, are left to state agencies, according to Samantha Batko, a senior scholar in the Urban Institute’s Housing and Communities Division.
“Homelessness response systems face long-term systemic challenges, while disaster relief programs like FEMA concentrate on short-term recovery,” Batko added. During disasters, people who reside in exposed areas, such as automobiles or street corners, are more likely to be exposed to debris and ash [from flames], which increases the risk of health problems and ER visits.
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According to Batko, who co-authored the paper for the institute, there were about 2,200 unsheltered residents on Los Angeles Skid Row at the time of the Eaton fire, and they were suffering from some of the worst air quality effects.
The homelessness issue in Los Angeles was already severe: Only 27,000 shelter beds were available for 75,000 homeless people in Los Angeles County last year. Thousands more people now without homes as a result of the fires, adding to the already overburdened system.
To launch a coordinated and successful response, the pertinent federal, state, and local governments, as well as L.A. County and its 88 communities, must be in agreement, according to Finnigan of the Terner Center for Housing Innovation.
Another twist could be on the horizon.
President Donald Trump suggested dismantling FEMA and letting the states handle disaster response, with the federal government covering some expenses, during his visit to western North Carolina last month. Since then, he has issued an executive order demanding a thorough evaluation of FEMA and suggestions for enhancements or structural adjustments. State emergency management promptly responded that FEMA’s assistance was required.
Recovery from disasters is not equal: Because insurance policies cover a large portion of the rebuilding costs, homeowners with insurance usually recover the fastest. However, the insurance business has started to collapse as climate calamities get worse. According to a New York Times investigation, insurers lost money on homeowners coverage in 18 states, or more than one-third of the nation, in 2023.
A trend that started in California, Florida, and Louisiana but has now extended across the nation, it has resulted in an insurance crisis marked by increased premiums, decreased coverage, or insurers withdrawing entirely.
Alexandra Alvarado, director of education and marketing at the American Apartment Owners Association, a lobbying organization for the industry, projected that these insurance-related issues would have been a defining legislative issue for California even prior to last winter’s fires.
According to Alvarado, who spoke to Stateline in December, property owners are very concerned about whether they will have insurance or coverage in the event that another wildfire or comparable incident destroys their home and whether it is worthwhile to rebuild and start again. Since we’re witnessing this in other places as well, I believe that lawmakers will be keeping an eye on it in addition to our own.
Despite Trump’s assertion, the majority of experts believe that deportations would not likely alleviate the housing situation.
Since colder, wetter weather increases dangers, especially for Los Angeles County wildfire survivors, California Insurance Commissioner Ricardo Larare reminded insurers of their legal obligation to pay mudslide damage from recent wildfires during the flames.
Due to the flames, State Farm, California’s biggest home insurer, has already petitioned the state to authorize emergency rate increases. They are requesting an average increase of 22% for homeowners and 15% for renters.
There are several challenges in the long-term healing process, particularly for marginalized and low-income groups.
Households with lower incomes suffer disproportionately from and are more susceptible to climate disasters. It’s possible that residents live in older, riskier dwellings that are more likely to be destroyed. Because land was less expensive or because redlining prevented families of color from relocating, lower-income neighborhoods were constructed in low-lying flood plains in several locations.
According to Katie Arrington, a disaster recovery specialist for Boulder County, Colorado, many households are unable to pay for flood or homes insurance, and stringent eligibility requirements may keep them from being eligible for disaster relief loans.
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Homes equivalent to those destroyed by disasters are frequently out of reach for renters, those living in mobile homes, and households without insurance. Many displaced residents are forced to choose between leaving their neighborhood entirely or enduring months or years of instability in the absence of financial safety nets.
Those who have insurance heal more easily than those who don’t. According to Arrington, homeowners typically recover more quickly than renters. There s a spectrum, from homeowners with full insurance to renters without insurance, and each group faces very different recovery timelines.
One major barrier to recovery for renters is the post-disaster surge in housing costs. A Brookings Institution report published in October 2023 shows that effective rents typicallyrise 4%after a disaster and remain elevated for at least five years.
In the past few weeks in Los Angeles, fire-affected neighborhoods such as Venice and Santa Monica saw rents surge by 60-100% within days, fueling calls forstronger enforcementof California s anti-price gouging laws.
California lawmakers in January allocated billions in funding to state and federal government relief efforts and put an immediate moratorium on evictions. The governor s office also has issued an executive order prohibiting Los Angeles-area landlords from evicting tenants whoprovide shelterto survivors of the Los Angeles-area firestorms.
For many municipalities, past experience is the only real preparation for disaster recovery. And sometimes, a bit of luck helps, too.
In 2021, the Marshall Fire in Coloradoforced the evacuationof 35,000 residents in Boulder County and destroyed nearly 1,000 buildings. County officials say their response benefited from both preparation and circumstance.
Some of our success was due to experience, but some of it was luck. We had a vacant county-owned building available to house the disaster assistance center, which allowed us to act quickly, said Arrington, the disaster response manager for Boulder County. If we had needed to rent or find a less-central location, the response would have been slower.
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Across the U.S., states are grappling with similar challenges.
In North Carolina, state-led efforts such as theBack@Home programhelped rapidly rehouse approximately 100 displaced households after Hurricane Florence in 2018, and later helped nearly 800 households find more permanent homes. The program has since become a model for addressing disaster-fueled displacement.
Similarly, after Tropical Storm Helene last fall, Asheville, North Carolina, allocated $1 million in rental assistance to prevent displacement. While Red Cross and state-run shelters were scheduled to close by Nov. 10, the city coordinated with the WNC Rescue Mission to keep one shelter open longer for the remaining displaced residents.
By Dec. 31, 2024, all nine remaining shelter participants had secured exit plans ensuring no one was left without a place to go, according to the city s spokesperson, Kim Miller.
Hawaii also has launched large-scale relief initiatives. In response to the 2023 Maui fire, HomeAid Hawaii, in partnership with the state, developed interim housing solutions for 1,500 displaced residents for up to five years.
Disaster-driven homelessness requires targeted programs that meet the needs of people at risk, said Batko, of the Urban Institute. States must integrate housing policy into emergency preparedness, or they ll find themselves overwhelmed when the next disaster strikes.
In Colorado, Boulder Countyhas managedto rebuild or begin construction on about two-thirds of the homes that were lost.
Boulder County is aiming for an ambitious 90% recovery rate, meaning 9 of 10 displaced households will find a new homes in the area. But even that success comes with a twinge of mourning for what was lost.
We started this recovery with a goal to get close to 90%, so we re proud, Arrington said. But we also recognize that some parts of the community have changed forever.
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