LA Wildfires Worsen California's Housing Crisis Amid Rising Shortages
TEHRAN (Tasnim) - The ongoing wildfires in Los Angeles County have destroyed thousands of homes, compounding an already severe housing shortage in California.
Wildfires in Los Angeles County have razed at least 10,000 homes, with more at risk as the flames remain uncontrolled.
This devastation exacerbates California's acute housing shortage, despite efforts by Governor Gavin Newsom and state legislators to ease construction barriers.
State officials report that California should build 180,000 housing units annually. However, current trends show a decline.
Newsom’s latest budget highlights a significant drop in residential permitting due to rising interest rates, with permits in the third quarter of 2024 down 13.5% from the previous year, averaging just 102,000 units annually.
The budget forecasts low housing production until interest rates fall, predicting a potential rise to 125,000 units by 2028 as construction and mortgage costs decrease.
Newsom's 2017 campaign pledge aimed for 3.5 million new housing units by 2025, but with current construction rates, that goal remains distant. His 2019 inauguration speech introduced a "Marshall Plan for affordable housing," yet current projections indicate less than a quarter of his target will be met by the end of his term.
California's housing crisis is among the worst in the nation, worsened by a significant drop in construction from 200,000 units annually in 2005 to half that number today.
This decline is linked to the aftermath of the 2008 housing bubble, which led to stricter mortgage qualifications and a limited housing supply, particularly as millennials entered the market.
Dowell Myers of USC's Sol Price School of Public Policy notes that tighter credit and low construction have left young home seekers facing the lowest housing availability in decades.
Myers emphasizes the importance of housing policies that account for demographic shifts to prevent supply-demand mismatches.
The wildfires' impact further strains the already limited housing stock. Myers warns that constrained supply reduces resilience to disasters, potentially accelerating gentrification as displaced residents compete for limited housing.
