Out of the destruction, fresh challenges arise

California’s most destructive wildfires caused tragic deaths and widespread displacement in Wine Country. Unless local leaders move quickly, it could also make California’s housing crisis far, far worse.

The Wine Country fires this month destroyed thousands of homes. The damage was particularly extensive in Santa Rosa, a once-affordable enclave that lost a full 5 percent of its housing stock. The horrible economics of disaster practically prescribe a difficult future for the residents of Santa Rosa — higher home prices, higher rents and a long rebuilding process.

“It’s very, very tough,” said Oscar Wei, a senior economist with California Association of Realtors. “Displaced homeowners will need a place to stay, and so will renters, and the supply of rental properties has gone down.”

There have already been scattered stories about enormous spikes in rental prices, which spurred both the Sonoma County Board of Supervisors and the Santa Rosa City Council to vote for tighter rules against gouging, or raising prices by more than 10 percent.

“I think raising the rent on someone because you can, due to an emergency like this, is predatory behavior,” said Santa Rosa Mayor Chris Coursey.

Santa Rosa’s City Council also voted to temporarily lift restrictions on alternative housing, including options such as mobile and small manufactured homes, so that more people can be housed more quickly.

“These structures will be allowed temporarily in a wide swath of town,” Coursey said. “We want people to have the ability to live on their property while they’re rebuilding.”

Local officials are certainly aware of these future housing challenges, and they’re taking steps to mitigate them.

But to offer fire-displaced residents the most protection, they’ll have to take bigger — and braver — action.

“If they just rebuild the same type of housing, prices will just keep going up,” Wei said. That’s true despite the disaster. For about six months after a disaster like the fires, Wei said, buyers are historically discouraged before deciding that lightning won’t strike twice. “If the area is still desirable, and the Bay Area is,” Wei said, “buyers will return relatively quickly.”

Add in a confluence of Bay Area factors — low supply, high demand, and a tight market for construction labor — and the fact that newly constructed homes sell for larger prices than older ones.

Economists predict that North Bay housing could

potentially be more expensive in a year than it was before the fires.

That’s bad news for the thousands of predominately moderate-income residents who are currently displaced. Santa Rosa’s city manager, Sean McGlynn, has said that the housing situation is expected to be so dire that up to 8,000 displaced residents will leave Sonoma County altogether.

But all is not lost. The North Bay, like many regions of the Bay Area, is dominated by single-family houses. If local officials take advantage of the opportunity to encourage the construction of more multifamily housing — which can house more people for lower prices — they can lower the cost of housing for renters and home buyers alike.

“If they revisit their zoning policies, and work with developers, local officials could encourage housing construction that’s more affordable for residents,” Wei said.

Coursey said Santa Rosa is open to the idea — to a point.

“We are not currently considering rezoning singlefamily-home neighborhoods as multifamily housing areas,” Coursey said flatly. “In the areas that have burned, people have a vested right to rebuild what they had before. But there are commercial areas that burned, and they might be ripe for multifamily-housing construction.”

In addition to city-owned parcels near transit corridors, Coursey said the city is seeking to speak with the owners of certain fire-damaged commercial buildings, like the Kmart on Hopper Avenue near Highway 101, about possibly transforming their properties into housing. “It’s up to them, of course,” Coursey said. We urge local officials and landowners to work together for the good of Santa Rosa.