Los Angeles residents affected by the wildfires can expect to see rent prices increase as they look for a new place to seek shelter in the aftermath. Real-estate experts say rent hikes are inevitable, and the wildfire’s effects on the housing market will be long-term.

Los Angeles was already one of the most expensive and competitive housing markets in the U.S. before the wildfires. Now that nearly 180,000 people have been displaced in LA, the rental market stands to become even more costly as people whose homes were damaged seek short- and long-term places to live.

“The LA housing market was already tight and undersupplied prior to the fires, so this will inevitably lead to increased rental housing costs in the immediate term,” Sean Roberts, CEO of California-based offsite homebuilder Villa, told Fortune.

In 2024, the California Housing Partnership reported nearly half a million low-income households didn’t have access to an affordable home, adding Los Angeles renters need to earn $48.04 per hour—nearly three times the city of Los Angeles minimum wage—to afford the average monthly asking rent of $2,498.

By comparison, the average monthly rent in the U.S. is $1,748, according to RentCafe. That makes Los Angeles rent nearly 1.5 times the national average. Plus, Los Angeles is short 500,000 housing units, according to the County of Los Angeles Homeless Initiative.

Experts say it’s still too early to tell exactly how much landlords have increased or will increase rent, but more expensive housing is practically unavoidable. But how much grace landlords will give remains undetermined.

“Hopefully, unscrupulous landlords don’t resort to price-gouging people impacted by the fires who need a place to live,” said Roberts, who heads up the largest ADU builder in California. “This behavior should be prevented given the declared state of emergency—which caps rent increases based on certain parameters—but it’s hard to know how well that will be enforced.”

Real-estate analytics firm CoStar also projects the vacancy rate for multifamily will fall throughout the first quarter of the year as vacant apartments are leased for short-term housing, likely for people who were displaced due to the wildfires.

“In the short term, rent growth will certainly accelerate, and vacancy will decrease as displaced households need housing,” Jay Lybik, national director of multifamily analytics at CoStar, told Fortune. “It’s difficult at this time to know how much higher, however.”

It’s likely, though, the wildfires will push rent growth up from the current 1% range, he added. By comparison, rent growth during the pandemic peaked at the beginning of 2022 at 6.7%.

It’s also likely adjacent housing markets that weren’t directly affected by the fires will see rent inquiry and price increases, Daniel Cabrera, founder and CEO of Fire Damage House Buyer, told Fortune.

“Families seeking housing may have to make sacrifices on either location or affordability, forcing some renters into neighboring regions or smaller cities,” said Cabrera, who has 15 years of experience in fire-damaged real estate and housing.

The long-term impact on Los Angeles housing

As is evident from the aftermath of other natural disasters, it will be a while before Los Angeles bounces back from the tragedy.

“Rebuilding the destroyed housing stock will take years, so the impact of the fire will not be a short-term event,” CoStar’s Lybik said. “Long term, we could see more multifamily units added given the lower vacancy rate.”

And if more long-term multifamily units need to be built, there will also need to be more short-term units available for construction workers.

“As LA turns towards rebuilding the impacted neighborhoods in the months and years to come, workers involved in the rebuilding will also need housing proximate to the areas being rebuilt which will also drive additional demand for rentals,” Roberts said.

History also tells us prices could be a problem for renters in the aftermath of the wildfires. After New Orleans residents and landlords got the go-ahead to move back to the city following Hurricane Katrina in 2005, supply was extremely limited and “competition was fierce,” according to Realtor.com. As a result, the typical New Orleans resident paid 33% more in rent in the few years following the catastrophe, according to Unity of Greater New Orleans.

“Unfortunately, natural disasters tend to put a lot of inflationary pressures on the housing market,” CoreLogic Chief Economist Selma Hepp told Fortune. Hepp and her team are currently monitoring whether rents will surge as households who evacuated or lost their homes seek new shelter, as well as mortgage delinquencies.

“Rebuilding takes years,” Cabrera said.

Experts say Los Angeles rental prices will ‘inevitably’ spike post-wildfires