Camp Fire in Paradise: How a Natural Disaster is Aggravating Housing Shortages in California

The November wildfires that ravaged Northern and Southern California took their place as among the worst natural disasters in the State’s history. The fires destroyed more than 125,000 acres of Northern California and also devastated the Southern part of the State, with a total death toll of at least 11: 9 in Northern California and two in Southern California. The California Department of Forestry and Fire Protection reported a loss of 6,522 residences, and a report issued by CoreLogic estimated that the total reconstruction cost value was approximately $18 billion.

As the campfires moved across the State, they displaced thousands of homeowners and renters, fueling the already pervasive housing shortage. According to a recent statement issued by the Executive Director of the Non-Profit Housing Association of Northern California, “massive action” is required to address the shortage. With 1,500 homes destroyed in Southern California, more than 5,600 in Napa and Sonoma, and nearly 1,100 in Shasta, thousands are displaced. The Non-Profit Housing Association estimates that in order to rectify the shortage, 1.8 million homes are needed by 2025.

Because the fires ravaged some of the most expensive areas in the State, residents are facing a dilemma: rebuild (which would be extremely costly) or move on and look for more affordable housing elsewhere. This issue is particularly pronounced in places like the Town of Paradise in Northern California, a town of retirees who, on a fixed income, are realizing that they simply cannot afford to rebuild. 

This shortage is quickly becoming a statewide issue: In Butte County, there are no vacant rental properties left, and homes are selling for between $30,000 and $100,000 above asking price. Due to these rising costs and the discrepancy between supply and demand, the estimated 52,000 who’ve been evacuated and displaced have been taking up residence in hotels, shelters, and makeshift refugee camps.

Government Assistance through HUD

The U.S. Department of Housing and Urban Development has announced disaster relief measures for victims, specifically in Butte, Los Angeles, and Ventura Counties, proposing the following measures:

• Providing foreclosure relief– HUD is imposing an automatic 90-day moratorium on foreclosures on FHA insured home mortgages. For assistance, call your loan servicer or FHA Resource Center at 1-800-304-9320.
• Making mortgage insurance available– The section 203(h) program provides FHA insurance to disaster victims whose homes were destroyed or damaged to such an extent that reconstruction is necessary. Some borrowers from participating FHA lenders are eligible for 100 percent financing for new homes, including closing costs.
• Making insurance available for both mortgages and home rehabilitation– The section 203(k) loan program allows those who’ve lost their homes to finance the purchase or refinance of a home along with repair through one single mortgage, allowing those whose homes were damaged to finance the rehabilitation of their homes.
• Making information on housing providers and HUD programs widely available– HUD will share information with FEMA and the State on housing providers that may have available units in the impacted counties. HUD will also connect FEMA and the State to subject matter experts to provide information on other programs that HUD offers displaced homeowners.

Find more disaster resources from HUD and its partner agencies here.

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At Harmony Communities, we feel strongly that each resident has a sense of home. That they come home from work and feel pride in their environment and in their place in the greater community. That families are comfortable raising children in our neighborhoods, and that couples and singles know that they belong to something bigger than their four walls. In other words, we seek to create harmony within each community, making our communities not just passable, but peaceful, safe, functional, and beautiful.