Families, workers in Sonoma County on edge as rental market tightens after fires

Nov. 12--Ben Hernandez and his family have spent the past five weeks in hotels, unable to find a place to rent after wildfires destroyed more than 5,000 homes in Sonoma County, including their three-bedroom tract house in northwest Santa Rosa.

"It's looking more and more like we might have to stay with relatives," said Hernandez, who works in maintenance and construction. His homeowners insurance is paying for the hotels, he said, but the company "is only going to give you so much housing money" toward a future when the family can rebuild in Coffey Park.

County renters, property managers and housing advocates say the October wildfires grabbed hold of a constrained rental market and squeezed it by the throat.

"It was bad before the fire," said Keith Becker, general manager and broker for DeDe's Rentals in Santa Rosa, which had 14 rental properties destroyed. "This has only made it worse. And it's made it worse on so many different levels."

Some who lost rental homes to fire said they are now paying substantially more for new places. Housing advocates said tenants in existing rentals also are reporting rent increases. Other renters told advocates they have received notices to vacate their current units, perhaps to make room for those able to pay more money.

Many fear the destruction of so much housing in affluent and middle-class neighborhoods could cause a chain reaction that eventually forces significant numbers of workers and their families from the county. Housing advocates maintain those with little means will be the most vulnerable.

"We're extremely worried that we're going to have a second wave of displacement," said Ronit Rubinoff, executive director of Legal Aid of Sonoma County. "We know the folks at the bottom of the market get pushed out first."

Sonoma County last month suffered the most damaging wildfires in U.S. history. The fires killed 23 people here and caused nearly $3 billion in property damage, including 5,130 homes destroyed.

Local and federal officials have yet to report what portion of the burned-out families were renters. What is known is that 4 in 10 county households overall were renting in 2015, according to U.S. Census data.

County Supervisor James Gore told Coffey Park neighbors at a meeting Tuesday that only 3 in 10 burned-out renters had insurance to cover their losses. That means the vast majority of the affected renters must rely on federal disaster aid for such items as temporary housing, a program that has been extended an extra four weeks to Dec. 7.

Santa Rosa apartment rents have risen 6 percent in the past year, with the average two-bedroom unit priced at $1,910, according to rent tracking website Apartment List. That compares with average increases of 4.3 percent for California and 2.7 for the nation.

The city's vacancy rate for 2016, the most recent available, was 2.3 percent, "which is basically zero," said senior research associate Sydney Bennet.

Bennet said it likely will take another month for the company's estimates to show the fire's effects on rents. She predicted rents will continue to rise, partly because the fire resulted in more high-income renters entering the market with the ability to pay more to find temporary housing.

Real estate website Zillow earlier reported a 36 percent jump in county median rents after the fire in a seven-day period ending Oct. 18. For Santa Rosa, the median rent increased 16 percent.

However, it seems likely that jump in the county median rent was related at least partly to a shift in the market, namely an increase in higher-priced vacation rental houses that insurance companies have been procuring for more affluent clients to move into.

There was a similar but opposite effect in prices during the home foreclosure crisis that began a decade ago. Then, the dramatic plunge in median prices for resale homes was soon exacerbated when the mix of available properties shifted dramatically toward the lower end of the market.

Those who found new rentals after the fires said their searches required perseverance.

"My wife was at it daily" reviewing Craigslist and other rental websites, said Henry Arriaga, whose Coffey Park duplex burned.

Arriaga and his wife, Hilary, applied for four or five rentals before being offered a triplex unit in Boyes Hot Springs.

"We jumped on it," he said of their acceptance. "We didn't want to wait."

The Arriagas now are paying roughly $2,000 a month for a two-bedroom unit, as are Miguel and Maricella Lopez for the two-bedroom condominium they recently moved into off Occidental Road in west Santa Rosa. For both families, that amounts to about $400 a month more than for their former homes in Coffey Park.

Miguel Lopez said the required deposits also increased. The total for the first month's rent and all the deposits amounted to about $5,800.

Even so, Lopez said, he has a home now because his former property manager helped him find the new unit and his renter's insurance company advanced funds to cover the initial costs.

"If not," he said, "I'm not sure where we would be at the moment."

Ben Hernandez's insurance company is trying to help find a place for his family. But Hernandez, his wife, Renee, their two sons and an uncle are seeking something in relatively short supply: a place with at least three bedrooms.

In the meantime, the days in hotels in Napa, Santa Rosa and Sebastopol are "getting tiring," Hernandez said. "This is no vacation."

Property managers said the rush for rentals started right after the fires.

"We had a couple of dozen vacancies on Oct. 7," said Jock McNeill, president of Alliance Property Management in Santa Rosa. "And in the week following, we filled everything in."

Alliance suffered 27 destroyed homes out of roughly 1,000 rentals.

McNeil said frustrations over the housing market could cause such workers as police officers, teachers, doctors and others to move away.

"Not only is the cost of living prohibitive," he said. "Now, there's nothing to choose from."

Becker of DeDe's Rentals said he still has some two-bedroom and smaller units available for rent, though rarely larger places.

He was able to find rentals for four fire-displaced tenants and three of his owner clients who lost homes in the fires. But he said he received many calls from people he has known for years "saying, 'Please, Keith, I hope you can help.' And the simple answer was, no, I couldn't."

Property managers suggest that since the fires, renters are increasingly acting the way homeowners have for the past few years. For both now, the lack of housing choices is pushing families to simply stick with what they have rather than seek a new home that may better meet their needs.

"We are definitely seeing that people are reluctant to move," said Patty Goodwin, property manager and chief financial officer for the Santa Rosa property management company Pine Creek Properties.

Since the fires, only three renters among the 974 units have submitted move-out notices, "which is pretty darn low for us," Goodwin said.

Many said they heard complaints of large rent hikes for new and existing tenants.

District Attorney Jill Ravitch said in an email that her office has received more than 60 reports of price gouging. The majority of those instances don't amount to a violation of state law, she said, and her staff is "aggressively pursuing evidence on the remaining cases."

Such groups as Legal Aid and the North Bay Organizing Project said they have started discussing the need on an emergency basis to enact a "just-cause eviction" law that would limit the reasons why a landlord can force a tenant to move.

"The need was there prior to the fires and the need is even more necessary now," said Davin Cárdenas, a co-director of the organizing project.

Santa Rosa voters rejected rent control and just-cause eviction limits in a June ballot measure that overturned the law the City Council had previously enacted. However, the council recently set an emergency limit on rent hikes to no more than 10 percent until April -- a provision that reflects state law on price gouging.

Legal Aid would like the city to go further in dealing with the current crisis by enacting an emergency rent freeze, plus language limiting the reasons tenants can be forced to move.

To ease the rental shortage, most agreed the county needs more housing.

Santa Rosa Mayor Chris Coursey said constructing more homes and apartments remains a priority, even as the city helps property owners rebuild homes ruined in the fire.

"We're going to work hard to build new housing as we work hard to replace destroyed housing," Coursey said.

He noted a meeting last week with Federal Reserve officials exploring how to "loosen up the money" needed to help accelerate construction projects in areas devastated by the state's recent wildfires.

"There's a lot of interest focused on Santa Rosa right now ... a lot of potential investment" with respect to housing, Coursey said.

To date, there haven't been signs of a large exodus of families because of the fires. For example, three schools around Santa Rosa either were destroyed by fire or closed as a result of safety concerns. But officials for those schools report that 95 percent or better of the affected students have returned to their current school districts for classes.

Even so, Anita Maldonado, CEO of the California Human Development Corp., a Santa Rosa nonprofit that serves low-income residents, said she increasingly hears clients lament they may leave the area because of the difficulty in finding affordable housing. The people on the edge include house cleaners, farmworkers and those in the hospitality industry.

"These folks did a lot of the work that makes Wine Country, Wine Country," she said.

You can reach Staff Writer Robert Digitale at 707-521-5285 or [email protected]. On Twitter @rdigit.

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