LA Fires Didn’t Discriminate in Their Destruction — But Recovery Efforts Could

The Pacific Palisades, Eaton, Hurst, and other fires this winter have brought unfathomable loss to Los Angeles County and marred the new year for many — erasing seaside mansions in the well-heeled Palisades as eagerly as they did less opulent homes in the vibrant historically Black community of Altadena. Still, as attentions turn to rebuilding and recovery, all victims, as Angelenos made equal in loss and grief, may well find their fortunes once again separated out by class and race, like particles strained through successive filters.

These social filtering mechanisms arise in various guises: a flooded rental market ripe for price gouging, the unaffordability of legal representation for claimants to press for insurance payouts, and the risky deals on offer from speculators who have descended to cajole residents into selling burned lots for cheap. For some, their unburned wealth will ease them through legal, financial and bureaucratic barriers to recovery. Other families, like homeowning working people, may have to settle for merely cutting their already disastrous losses.

While the fires were undiscriminating, the city they burned was not. The effects of historical redlining created the Altadena neighborhood, with a population 58 percent people of color. It subsequently thrived — but now, a UCLA study found, its older Black homeowners have been disproportionately harmed by the Eaton Fire. And across burned areas, low-income jobs held by people of color might be permanently eradicated — as many as 35,000 positions. Unfortunately, just as the losses have been, the recoveries will also be marked by unequal realities. Nevertheless, a broad field of local organizers is activating to counteract forms of exploitation that, while exacerbated in the wake of the fires, long preceded their first sparks.

Gouged Out of the Market

Prior to the fires, Los Angeles was already wracked by multiple interlocking housing crises — crises of unaffordable rents, insufficient affordable housing and resultant homelessness, which has reached staggering extents. Now, with tens of thousands of structures destroyed, losses of both housing and employment have sent innumerable desperate people rushing into a constricted market.

Less scrupulous landlords saw opportunity: Rents have been documented rising by leaps and bounds, increasing by 50 percent or more in some egregious cases. This level of price gouging in a market that was already widely unaffordable ensures that the wealthiest victims, able to absorb usurious rates, will be the first in line for shelter.

Estuardo Mazariegos is the co-director of the Los Angeles office of the Alliance of Californians for Community Empowerment (ACCE), a grassroots nonprofit that organizes communities of color to advocate against housing exploitation, among other injustices. Truthout reached Mazariegos to better understand what sorts of inequalities might mark Los Angeles’s period of fire recovery and housing reconstruction.

Obviously, people with lower incomes are soon weeded out of rental markets at their currently exorbitant rates. But there are knock-on effects as well: “There’s definitely a strain on the overall community because of the impact. Children not going to school, folks finding it harder to get their documentation, finding it harder to access the services that they need. So definitely, lower-income folks have a harder time recovering and finding housing afterwards,” Mazariegos noted.

California Penal Code 396 prohibits price gouging (for rent, defined as increases over 10 percent) during a declared emergency. The state appears to be holding to it: Attorney General Rob Bonta announced he would be pursuing price-gouging landlords; his office has sent hundreds of warning letters, and is beginning to bring forth charges in a couple of cases for violation of the gouging statute.

Rents have been documented rising by leaps and bounds, increasing by 50 percent or more in some egregious cases.

To dissuade gouging, though, the state must be aware of it, and oversight capabilities are limited. Citizen reports have proven essential. It certainly helps make a case against gougers that listings on the popular rental site Zillow contain a price history. Making use of this and other public information, a group of Angelenos — tenant organizers, outraged homeowners, data gatherers, and other volunteers — have united against gouging under the banner of the Rent Brigade.

The Brigade enlists volunteers to seek out and document illegal price increases of over 10 percent and report them to the state. On January 27, the Rent Brigade released a report indicating a 5,065 percent increase in gouging over 11 days, with new listings also appearing far over fair market value.

The chance to profit is also leading some impatient landlords to attempt to evict longtime tenants, who are more likely to have rent stabilization and other protections, so that new tenants can be brought in at a higher rate. To do so, some resort to outright tenant harassment — an astonishingly callous tactic, and a very real problem. The post-fire gouging “results in a secondary outcome: an increase in the harassment of tenants throughout the city to have them self-evict,” said Mazariegos.

Chelsea Kirk is an organizer with the LA Tenants Union and a researcher with Strategic Actions for a Just Economy; she is also one of the advocates spearheading the Rent Brigade effort. Reached for comment, Kirk talked about what her volunteers are seeing and expanded on the Rent Brigade’s current efforts to confront the second-order evictions problem: “We began by tracking instances of rent gouging, and are now crowdsourcing data on evictions, because elected officials aren’t seeing the people being indirectly displaced by the fires. Their stories are being crowded out.”

Wild Speculation

Of course, in crisis, there is opportunity; this is the logic of “disaster capitalism,” also known as the “shock doctrine,” in Naomi Klein’s famous formulation. It’s appearing here in the form of speculators seeking to snap up damaged lots on the cheap. Their approach capitalizes on desperation — a pressing uncertainty among many fire victims that their losses will be remunerated, thanks to the tenuous conditions in insurance — as well as, perhaps, an instinct to strike while fire victims are still in an emotionally vulnerable state, more likely to hastily accede to a devil’s bargain.

Mazariegos confirmed hearing reports of residents receiving unprompted cold calls with lowball offers. “It’s unfathomable, and unconscionable, that folks are getting calls after they lose their entire life’s work,” he said. “Folks are recovering from a moment of ultimate loss.”

It’s not entirely clear who these interests are in every case — but what most concerns Mazariegos and his fellow advocates is the possible intrusion of private equity, already a voracious acquisitor of housing for investment purposes. “We’re on guard right now and really monitoring the situation in burned places, and checking in with folks who are organizing on the ground, seeing who’s calling up [to make underpriced offers], to figure out if it’s private equity. That’s one of the things we’re all concerned about.”

“We began by tracking instances of rent gouging, and are now crowdsourcing data on evictions.”

Gov. Gavin Newsom’s office has stepped in to aid with both the speculation and the price-gouging by issuing two executive orders, a three-month ban on unsolicited below-market offers and a rent increase cap, respectively; the latter order will also help create more temporary housing. These are welcome reprieves. (In addition, Los Angeles City Councilmembers Eunisses Hernandez and Hugo Soto-Martínez have advanced a local motion seeking a yearlong moratorium on evictions and rent hikes.) Still, as Mazariegos pointed out, “This was not necessarily done only because Gavin Newsom did so out of the kindness of his heart. It was community members that stepped up to the plate and said, ‘You need to do something about it now.’”

ACCE helped advocate that the government adopt these protections as part of the Keep LA Housed Coalition, which includes several major advocacy groups. They’re also calling for “a rent freeze and other tenant resources and petitions to keep tenants housed,” as well as better protections and enforcement, Mazariegos said. It’s also worth noting, as Schuyler Mitchell did for Truthout, that a vast network of mutual aid efforts, with varying degrees of official organization, have arisen to help lift up their neighbors in need.

Insured and Unsure

Those who have lost homes face a grim choice: whether to find a home elsewhere and leave behind their community, or stay to face what could well be a grueling rebuilding process.

Blair Miller is the principal project coordinator of the City of Los Angeles’s Economic and Workforce Development Department, leading the department’s real estate group; she is also a former member of the Pasadena Planning Commission and a board member of Heritage Housing Partners, an affordable housing preservation nonprofit. On a call with Truthout, Miller laid out the barriers to reconstruction. She spoke chiefly to concerns in the historic Altadena neighborhood, where she lives. Her own home was very nearly lost in the Eaton Fire. “Altadena was an extremely special place,” she said. “It’s really sad, and I’m not sure what to do about it except to feel sad.”

Many families of color bought homes in Altadena to escape redlining in the 1960s and 70s — far enough back that, by now, many own their houses outright. For many, the fires represent the destruction of life savings and inheritances: wealth that was intended to be amassed generationally, providing descendants with more ease. Miller agreed that while local developers are not necessarily the ones to blame, the lowballing speculators do pose a threat: “When you’re talking about speculative buyers or homebuilders, yeah, there’s gotta be an army of people out there trying to take advantage.” Those types of wheeler-dealers are likely there to quickly flip lots for a profit — in large part, they’re probably “not the same developers who will eventually build,” she believes.

For those who do want to stay and rebuild, insurance may simply not make up the full difference. “Here’s the first problem: People aren’t insured enough to rebuild,” explained Miller. The building costs were at about $500 or $600 per square foot for single-family homes in the area. Those costs are really, really likely to go up. There’s competition for building materials and for labor.”

Some claimants will have riders allowing them to retroactively establish they were not informed that they were underinsured — but those who don’t, Miller added, “are not going to be able to fight their insurance companies, so they’re just going to wind up with not enough money.” There is some chance of state intervention. So far, Insurance Commissioner Ricardo Lara did issue guidance that mandates insurance companies at least provide advance claim payments to victims — though not all are receiving them.

Still, many policyholders, lacking various insurance protections, may also face an insurmountable leap in premiums. Many will be forced to turn to the expensive, low-benefits California FAIR Plan — and even that backup plan’s continued existence as a solvent entity is in major doubt.

The Inevitable Trade-Offs

Rebuilding efforts will form a nexus where various state practices and developer incentives intersect — a balancing act involving calculated trade-offs. First, homeowners and/or developers will face a permitting process that, even “prior to this,” said Miller, “was just a nightmare.” She described an outsourced permitting department with poor interagency communication, which often left would-be builders frustrated. “If the permit process were to continue [post-fire] at the rate it was before, that would push the rebuilding process out to 10 or 15 years.”

That’s a remarkably long time — and an entirely nonviable wait for most. Nevertheless, in the absence of reform, permitting will remain worryingly impaired. Improvements to agency processes are doubly necessary, added Miller, because, “unless you have a group of trained professionals [at agencies] who are empowered to hold the speculators to design standards, then speculators are just going to get ticky-tacky cheap options approved, and throw them up.”

The results of such quick and dirty profiteering would be a blow to a neighborhood’s character, and likely value as well. Yet issues abound should the opposite approach be indulged too far: As Miller said, “If you put lots of design review on it, then people who do want to do good stuff are going to get stuck in this system that was already taking way too long.”

Other trade-offs will involve hedging safety costs against inevitable future fires. There are certain construction decisions that increase fire safety and are more or less zero-cost. But there’s a spectrum of protection: Adding metal roofs and fireproof windows, Miller pointed out, would expand costs considerably. Should such measures be mandated? If they are, “because of the competition for labor and materials, [costs] could go way higher than that,” she said.

“Here’s the first problem: People aren’t insured enough to rebuild.”

Rebuilding in exurban areas now known to be risky involves still more difficult decisions. “Parts of Altadena that burned are very much up in the hills. Are they allowed to build back? Can they ever get insurance?” Miller asked rhetorically. The same question will arise for some of the ultrawealthy-owned properties, which in general are more commonly found at the “wildlife-urban interface,” that were lost in the Palisades fires.

However these tensions play out, it’s evident that the wealthy are better poised to navigate them. “They’ll have the ability to hire an architect and a contractor,” noted Miller. “Because they’ll be ready faster, they’ll be able to get to the front of the line. So, they’ll probably be building faster, unless the county does something to take care of that.”

In other words, a capricious process of bureaucracy, claims and counterclaims by various stakeholders, warped incentives to profit and a complex set of cross purposes will be set in motion as Los Angeles County neighborhoods rebuild — a process that will inevitably disadvantage and frustrate many fire victims. Throughout it all, as in so many other realms of this world, the very wealthy will quickly find themselves at considerable advantage.

As the bitterly familiar result of inequality, it seems evident that the residents who populated beautiful neighborhoods like Altadena, especially the less wealthy and people of color, are less likely to come through the process to their benefit — and less likely to regain what they’ve so painfully lost.

“Yes, there is an immediate need and impact in the burned areas,” Mazariegos said of the crisis. “But this is just like throwing a rock in a pond. There are ripples, and the ripples are starting to be felt across the region. And it’s low-income people and communities who have been historically underinvested … that will feel these effects the most.”