Deadly Camp Fire fuels California’s raging housing shortage

Dec. 04--As ominous as the dark smoke that choked the Bay Area while California's most destructive wildfire raged 200 miles north, a second tragedy now is looming over the state -- the loss of thousands of homes in an already housing-starved region.

The deadly Camp Fire destroyed nearly 14,000 homes in Butte County, resulting in up to $9 billion in residential losses, according to a recent estimate by property data company CoreLogic. In a matter of hours, the fire wiped out the equivalent of nearly 18 percent of the roughly 80,000 new homes California produces in an average year.

The fire also killed at least 88 people.

As the state struggles to overcome a dire housing shortage that has driven up home and rental prices and forced many residents to move out-of-state, the property loss compounds an already critical situation. When coupled with the 1,500 structures destroyed in the Woolsey Fire in Southern California this month, the more than 5,600 structures destroyed in last year's Tubbs Fire in Napa and Sonoma counties, and the nearly 1,100 homes destroyed last year in the Carr Fire in Shasta County, it's devastating. And experts say Bay Area residents may feel its effects.

"It is so severe," said Amie Fishman, executive director of the Non-Profit Housing Association of Northern California, "that massive action is needed to address what was already an urgent crisis. There needs to be major federal and state investment in housing and affordable housing."

California has lagged behind its housing goals for years, according to an assessment published this year by the California Department of Housing and Community Development. To meet projected growth, the state needs to add 1.8 million homes to its housing stock by 2025, or 180,000 each year. But only about 100,000 homes were added in 2016, the most recent year the assessment tracked.

To keep pace with demand in the Bay Area's strong economy, the region needs to build 187,990 homes between 2015 and 2023, according to state goals adopted by the Association of Bay Area Governments. But earlier this year, 97.6 percent of California cities were failing to meet their state-mandated housing production goals.

As many as 50,000 people were evacuated as the Camp Fire swept through Butte County, and those displaced residents have flooded nearby towns already short on housing. As a result, cities such as Sacramento, a relative bastion of affordability for Bay Area residents fleeing a staggering cost of living, may see rents and home prices increase, said Sarah Karlinsky, senior policy adviser for urban planning public policy think tank SPUR.

Bay Area developers also will have to compete with a flood of demand for building materials and construction workers for Butte, Sonoma, Napa and Shasta counties as they rebuild, said John Protopappas, president and CEO of developer Madison Park Financial Corporation. The region already is experiencing a shortage of construction workers and rising building costs, and that increased competition may drive costs still higher, which could lead to higher rental and purchase prices, Protopappas said.

"I think the Bay Area's going to feel the impact," he said.

Meanwhile, in Butte County, the housing market has become as cut-throat as in Silicon Valley and San Francisco. There are no vacant rental properties left, and homes are selling for between $30,000 and $100,000 above asking price, with multiple offers, said Jennifer Morris, executive director of the nonprofit North Valley Property Owners Association, which launched the website campfirehousing.org to connect displaced residents with available housing. Shortly after the fire, evacuees set up a tent city in a Walmart parking lot in Chico.

"People are very desperate," she said. "It's a really large catastrophe that I don't think anyone has any great solution on how to handle."

By Monday, FEMA had yet to move any displaced residents into its signature trailers. The agency had moved two families into RVs, and planned to move in two or three more over the next few days, spokesman Michael Hart said. FEMA estimates about 2,000 people need housing help.

On a recent conference call with reporters, Tina Curry, deputy director of California's Office of Emergency Services, acknowledged that "when are people going to get housed?" is the big question.

"The answer to that, is as soon as we can," she said.

In the meantime, FEMA is putting evacuees up in hotels and offering them money to pay for rental housing. But that doesn't do much good when there's nothing to rent.

With no housing available, Michael Charvel, a guitar maker and musician who co-owns owns Wayne Guitars with his father, Wayne Charvel, has bounced from place to place ever since his Paradise home burned down. He stayed at a friend's rental property in Chico, then headed to Anaheim to stay in his best friend's uncle's house and finally booked a hotel in Irvine through Friday.

"It's kind of one day at a time," said Charvel, who eventually hopes to rebuild in Paradise.

Like Butte County, other communities hit by natural disasters also have seen the crises impact their housing markets.

After Hurricane Katrina devastated the New Orleans area in 2005, home prices in nearby Baton Rouge shot up, said Frank Nothaft, chief economist at CoreLogic. Rent prices also rose in Santa Rosa after the Tubbs Fire, in the Houston area after Hurricane Harvey and in the Cape Coral, Florida, area after Hurricane Irma last year, according to Nothaft's research. And mortgage delinquency rates spiked in all three regions after the natural disasters, as some residents lost their jobs or sources of income.

Randy Cloyd, 62, plans to rebuild on his 1-acre lot in Paradise. But he knows the process may take years, and in the meantime, he worried it would quickly become impossible to find a home nearby. That's why almost as soon as he and his wife confirmed that their three-bedroom home with a barn, fruit trees and bee farm had burned down, they began searching for a new home to buy. The market in Chico already was too hot, so they turned their gaze toward Oroville. About two weeks ago, they landed a three-bedroom house for $184,000 -- it was the third property they'd made an offer on.

It's a relief to have a stable place to go, Cloyd said. But most of his friends and neighbors from Paradise weren't so lucky and still are living in hotels.

"I tried telling them really early that you guys need to either find something, anything, to rent or get into or look at buying something very quickly," Cloyd said. "Because what I feared is happening -- and that's just that there is nothing."

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