Out of the Fire and Into a Real Estate Nightmare

The DC-10 jetliners were still dropping hot-pink fire retardant on the fires raging across the Santa Monica Mountains when Angelenos began frantically calling their real estate agents. Most of them were looking for a rental in a good zip code—something comparable to the home they’d just lost. Often, they wanted a yard for the dog, and for the place to be close to work, community, and their kids’ schools.

“The Palisades looks like a war zone,” says luxury real estate agent Shelton Wilder. “I started trying to find homes for people while I was watching TV, waiting to see if my own house was going to survive. People are devastated.” Her voice breaks. “I’m sorry I’m crying. I’m crying with clients all the time. There are people who have had their homes for 40 years and it’s gone. There are people who were renting who have nothing left. I’m evacuated right now too, and my kids don’t have a school anymore because it burned down.”

Real estate agent Shana Tavangarian-Soboroff—her dad is high-end developer Ardie Tavangarian and her father-in-law is civic leader Steve Soboroff—says she was having breakfast with a client when her husband called, said they had to evacuate, and asked what he should grab for her. “I told him to bring my face wash,” she says. “I thought we’d be evacuated for the night. I didn’t ask for my engagement ring, which I took off because my fingers were so swollen”—Tavangarian-Soboroff’s baby is due in February—“or my passport, nothing. All we brought was my face wash and the dog.”

Even so, Tavangarian-Soboroff kept taking calls from desperate clients and tried to find them a place to live. If it’s surprising that so many people in LA consider their real estate agent an emergency contact, keep in mind that the city was in the midst of a housing and homelessness crisis even before the flames erupted. According to a 2024 analysis by Zillow, LA was short 336,728 homes as of 2022, and Redfin recently estimated that 12,941 homes have been destroyed by the Palisades and Eaton Canyon fires.

Clean up of hazardous materials—like lithium batteries from cars and cell phones that could potentially explode and leak toxic gas—is projected to take a month, while the subsequent debris removal could take a year, according to the mayor’s office. Architects, contractors, and other skilled laborers are expected to be in high demand, and rebuilding could take years. In other words, staying in an AirBnb or hotel isn’t financially realistic for most, so the faster people can get into a long-term lease the better. But many residents will likely have to take their insurance checks—assuming their insurance wasn’t canceled before the fires—and relocate. Real estate agents say friends and clients intend to move south to Manhattan Beach, north to Santa Barbara, or even as far as Aspen, Austin, or New York City. Meanwhile those who can afford it are skipping the crazed rental market altogether and purchasing new homes not far from the ones that were just reduced to ash.

The only thing left of Ryan Jacula’s Pacific Palisades real estate office is the sign. Nevertheless he’s been on the phone with clients who are looking to lease houses every day from 6:30 a.m. to 11 p.m. since the fires started. He estimates that there were only about 160 single-family homes for rent west of La Cienega Boulevard as of late last week—and guesses that half of those are already taken. Like every other real estate agent Vanity Fair spoke to for this story, he says he doesn’t want to profit off of a natural disaster and is not taking commissions from fire victims who are asking him for help.

But—this may or may not shock you—some people in the real estate business would rather make a buck. According to one agent, a house near the Palisades that was listed for $30,000 a month in December rented for more than $60,000 last week. “The person who got it paid two years up front and had to wire over $1.5 million in cash,” they say. Rental prices near the Eaton Canyon fire aren’t quite as eye-popping, but the demand is unprecedented. “I have a family who can afford $10,000 a month. Last week, I found three single-family homes for them to look at,” says Rob Moore of Compass, who primarily works on the Eastside. “Of the three, two were already rented and the other had too many applications already. Even houses that were sitting on the market for months before now are just out the door.”

In an attempt to rein in rent-gouging, Governor Gavin Newsom has extended the state’s emergency protections for tenants: Landlords and businesses that increase the rent over 10% could face up to a year in jail, a $10,000 fine, or both. Attorney General Rob Bonta has charged two realtors for alleged violations, and announced this week that more than 650 price-gouging warning letters have been sent to hotels and landlords. But Chelsea Kirk, a tenants rights advocate, says it’s difficult to catch every corrupt landlord in the city. Eager to fight back, she started a public Google doc that has screenshots from Zillow demonstrating what properties were listed for before the fires and what they’re listed for now. She posted the list on her Instagram and it quickly went viral. Now Kirk has 150 volunteer researchers, and—if the list is correct—some landlords have raised their prices over 30% since the fires started on January 7. At press time, a Malibu beach house that was listed on Zillow for $11,750 a month in 2021 is now on the market for $23,000 a month. A home in Atwater Village was $6,450 a month in October and relisted on January 10 for $27,000 a month (an increase of 318.6%). The price dropped to $6,950 five days later and has since been removed.

That doesn’t necessarily mean that it was rented out. Kirk says some landlords may prefer to wait until they can lease them for more than Newsom’s 10% cap. According to real estate agents, people who were thinking of renting out their second homes in LA have changed their minds, claiming they’re worried about overcharging and breaking the law.

As a result, there are a lot of homes sitting empty when the fires have sent thousands of people scrambling. “This is a big learning lesson for politicians about the housing system we’ve created in LA where we prioritize profit over housing people,” Kirk says. “We need to get hard on vacancy control. We’re understanding that, Oh, shit, this housing system we’ve built up in the aftermath of World War II when we moved away from public housing is failing us.”

Well, not all of us. Los Angeles’s superrich already appear to be tiring of the rental market after three weeks of looking. For some of them, the mantra is now “buy, baby, buy.” A house in Cheviot Hills listed for nearly $3 million sold this week for $6 million—a price so extravagant that real estate agents all over town are astonished.

“I’ve never seen anything like this before,” says one agent, noting that even during COVID the highest they’d seen anyone pay over the asking price was $1 million. “Is there a gold vein under [that house] or something?” Another property, which was listed for $4.2 million, had been sitting on the market for about 60 days. Recently, it received five offers at, or over, the asking price. Despite the fact that the fires weren’t even out yet, Wilder says, a showing of a single-family home in Encino drew 250 people over the course of a weekend. One day later there were multiple all-cash offers, all for hundreds of thousands of dollars over the asking price.

The Palisades has long been considered one of those idyllic places that nobody wants to leave. Similarly, Altadena was considered a bucolic haven with old-growth trees, a well-established Black community, and artists and musicians who were priced out of Silver Lake years ago. But not everybody can buy their way out of this nightmare. Nancy McSween, a Compass real estate agent who’s lived in Altadena since 1978, says some people are leaving because they paid off their mortgages, then let their fire insurance lapse.

Still others discovered that their insurance wouldn’t be renewed not long before the fires broke out. Some people who lost their coverage were reinsured via the state’s Fair Access to Insurance Requirements (FAIR) plan, which provides modest fire coverage to high-risk homes that insurance companies will no longer touch. Senator Alex Padilla recently said the plan had about $377 million to pay claims as of January 10, but Verisk, a global data analytics company, estimates that the fires have caused between $28 billion and $35 billion in property damage. A recent study of the December 2021 Marshall fire in Colorado suggests that many more people will soon discover that they’re underinsured and might not have enough money to build a new home.

Leasing a place while you rebuild your decimated home, buying a new one, or just leaving town altogether—it all feels like defeat to one screenwriter whose family moved out of Malibu after being evacuated during the 2018’s Woolsey Fire. They resettled in the Palisades, which seemed safer, only for their Palisades home to burn down, while the Malibu house remains standing. “For me, the Palisades has basically been nuked,” he says. “If we rebuild, what will it be at the end of it? Is it going to be like Pottersville? Because I think there’s something symbolically resonant about Rick Caruso’s mall being [one of the only things] that survived.” Caruso reportedly hired private firefighters to save his luxury shopping center, Palisades Village, but as one real estate agent observes, “I don’t think a lot of people are going to be rushing in to buy Chanel right now.” (VF has reached out to Caruso’s company for comment.)

The screenwriter is looking at new houses, but when he sees one for sale in the canyons, which serve as fire super-funnels? “I think, Fuck that.” He might move his family to Calabasas, which would be close to where his kids’ schools have temporarily relocated, but, he says, “I’m probably too snooty to live in the valley.”

He might not have a choice. Nobody seems to know how nearly 13,000 homes are going to be rebuilt in anything like a timely fashion, or how fire victims will be relocated in a city, which already has a homeless population of more than 75,000. One agent says he heard a rumor that a large bank is planning to offer interest-free home loans to fire victims. Others say the government is going to have to get involved. Perhaps that’s why Newsom, whom Donald Trump has called “Newscum” on social media, gave the newly elected president a hug when he arrived to tour the damage last week. Said Trump to Newsom, “It’s like you got hit by a bomb.”

“Honey, it’s really hard,” says Wilder, who adds that the community has come together and been exceedingly generous to one another. “I’ve sent 30 pairs of Uggs so far to my real estate friends and clients and anybody that I meet who’s lost their home. Uggs are my love language right now.” Wilder is worried that some fire victims are making big real estate decisions while they’re still in shock, which is not to say that she blames them. “The heartbreak is that it’s really hard to find like-for-like. Clients tell me what they want and I say, ‘You lived in utopia. I can’t find that.’ Not an easy thing to say to people who are traumatized.”