The initial shock of the Mendocino Lake Complex Fire has passed, but like any crisis, the long-term effect upon survivors and the entire community will be long-lasting.
For years, the entire county, has struggled to maintain a robust inventory of affordable houses. According to Drew Nicoll, realtor with W Real Estate, the fires have made a bad situation far, far worse. He is sounding the alarm – concerned that without immediate efforts to create additional housing, the makeup of the county will be forever altered by an exodus of native Mendocino County residents and an influx of homebuyers and renters from Sonoma County –many of whom are fire victims whose insurance settlement dollars go much farther in the Ukiah area.
“Let’s face it. In general, the entire state has had a housing shortage for some time,” explains Nicoll, who runs the Nicoll-Pallini Group sales team at W Real Estate. Currently, Nicoll and his realtors are working with hundreds of people affected by the fires – people who are still desperate for permanent housing.
“I know of people living in shops, in garages, people who are camping out and staying with friends. Right now it’s hard to even find RVs, trailers or modular homes. At my gym, there are people who are still showering there because they don’t have a place to live,” he explains.
Nicoll is doing his best to help clients find a place to live, but notes that the challenges that faced renters, homeowners and first-time buyers prior to the fire are now compounded exponentially.
“The previous lack of housing folds into the current housing crisis related directly to the fires,” says Nicoll, adding that several factors came together to create the current housing shortage.
“Historically, Ukiah and Mendocino County have had a low-growth and even a no-growth perspective. That’s one part of the issue. The other part is the functionality of government and the time and money it takes to get a project off the ground. Sewer hookups for the housing project near the Redwood Health Club will cost $2.4 million. Time is money for builders. All of these factors create a lack of homes. Part of the reason we’re not building enough houses is because it doesn’t make economic sense to build single family homes,” he continues.
Historically, says Nicoll, the construction of luxury homes helped to subsidize low-income housing. “But on the other end, no homes ended up being built for the middle class. If you’re 25-40 years old with a median income of $40,000- $50,0000, that will not buy you a house. So what options do those people have? Rentals. Now you bring in the fires, and we have a real crisis on our hands.”
Before the fires, the smattering of available rental houses were going for about $1,600 to $2,000 monthly.
“Now that people are starting to get insurance money, tenants are going to get eviction notices as fire victims come in with higher rental dollars,” says Nicoll.
Though he notes that landlords may not legally raise rents by more than 10 percent, Nicoll says that insurance companies pay out “comparable value” for their clients who are renting while waiting for their homes to be rebuilt.
In some cases, particularly for wealthy homeowners in Sonoma County’s Fountaingrove subdivision, that can translate into tenants willing and able to pay far above the market value for a rental.
For renters, says Nicoll, finding a place is about who you know. “And you can’t have pets, you must have an 800 credit score, and you have to have first, last and a security deposit.”
Nicoll has been seeing a wave of homebuyers and renters coming north from Sonoma County.
“We’re seeing an influx – a migration from Sonoma and the Bay Area north. Six of the 10 houses I’ve sold recently are to people moving from Sonoma, Marin and Sacramento. If this trend continues, Ukiahans will be pushed out of their community. Our most expensive homes are cheap to some of these homebuyers, and we offer a good quality of life here.
“If they’re affluent, they can buy a Mendocino County home for half of what they would pay in Sonoma County, and keep some money in the bank. So Sonoma County residents are buying our available housing stock, which is causing home prices to rise even more. This situation is pricing our community out. There’s nothing to buy in Willits and there’s virtually no inventory in the valley,” says Nicoll.
“Currently we have less than one month’s inventory – less than 15 houses in the $300K range for sale in our area. We have maybe one home for under $300,000. For all these homes you’re getting multiple offers because affluent people are also in desperate situations, so there’s always someone who has more money than you and is willing and able to make a higher offer.”
Several months ago, Nicoll posted a question on his Facebook page, asking people to guess how many houses were currently on the market. “I asked this question before the fires. People guessed between about 40 to 60 homes. At that time, it was 17 houses. So today, you have literally hundreds of people fighting over a dozen or so houses.”
Nicoll hopes that those who have opposed building in the past will think about the ramifications, particularly in today’s context of the post-fire housing crisis. “If you really care about our community and culture, I hope you’ll think about the need to build dwellings for this community that are going to work for everyone, because gentrification has already been jumpstarted here. The fires have just magnified this situation. The word is out. I don’t see prices in Ukiah going down unless there is some additional crisis.
“We’re in danger of losing our culture and forever changing our community. Some people are waiting to see how insurance money pays out. But if you have to wait three-to-five years to have your home rebuilt, what do you do between now and then?
“I know of people who are moving to Idaho, Texas, Nevada, Arizona. A lot of people are leaving because of lack of choice – people who I feel add wealth and benefit to our community. We need to retain Ukiah’s brightest and best. We need people to stay or return here from college to raise our next generation of kids, and these are the very people who are leaving our community.”
On the other hand, says Nicoll, “If you’re 60 years old, living in Santa Rosa and don’t want to wait five years to rebuild, Ukiah starts to look very good,” he continues.
In 2008, says Nicoll, people moved to Sonoma County in response to the economic downturn, increasing the county’s population by 10 percent. “All those people were employed, and Sonoma grew. Now, people are commuting an hour from here to Sonoma. It’s not that crowded here and the commute is comparatively simple. They’re coming, so we’d better figure something out quick,” he notes.
“Now that we know the implications, we can plan for the future,” says Nicoll.
In the past, Nicoll feels a “NIMBY” attitude has promulgated some of the resistance to building new homes.
“Some groups oppose what is perceived as urban sprawl. Others who live in town have opposed higher density housing. But if you want the people who were born and raised here to stay, we have to figure out a way to provide housing for them, and facilitate solutions in a healthy way. No one wants to see the valley torn up. We need smart growth, and that can be done with good planning.”
Nicoll feels that the need to increase the region’s housing stock is “desperate.”
“Building will help maintain our community. If we increase supply, we alleviate problems.”
But he also feels that builders need incentives. “California is an overregulated state. There’s about $80,000 to $100,000 in government regulations and red tape added to the cost of a house. But we can streamline the process. We can defer or even waive fees to help get the process going. Bond measures can be created to help subsidize utilities. But you’re still talking about a years-long process.
“Community needs to hold government responsible. I’m not blaming individuals. But think about the pressure on building and planning staff right now – just to keep up with rebuilding new homes, working on new housing developments and implementing the new marijuana guidelines. I don’t think they have the staff or the capacity to handle this. This is just another issue.”
In the short term, Nicoll would like to see the development of condominiums, which he feels are more financially viable than building apartments.
“We could build three-bedroom, two-bath gated condos with a pool, a park, a gym and garages. There’s less environmental impact with condos and they make great starter homes. I’m trying to find developers interested in a project like this,” he notes, adding that the county has expressed interest in encouraging mixed-use projects of this kind.
“It brings first-time homebuyers into the market. Condos are affordable and can be something we can be proud of. Look at the handsome new buildings next to the Grace Hudson Museum. A project like this would help ease the housing pressure in about 24 months, instead of five years.”
Nicoll also thinks it’s imperative to track the changes that the regulated cannabis will bring to the county. “Everything with this industry is changing rapidly. If the county becomes a tourist destination, there’s even more reason to increase our inventory, one way or another.”
With all these concerns, what should individuals do? “It’s hard to say, ‘do this or do that.’ It depends on how much equity you have in your home and if you’re a fire victim, what your insurance adjustments will be. We’re suggesting people reach out, case-by-case to trusted real estate professionals to look at all your options and figure out the best course of action.”
Nicoll feels that the market will continue to be strong for the near future. “If you have a house to sell, now is the time to do it. If you’re a builder, you’ll have lots of opportunities. If you want to buy, look for off-market opportunities.”
Nicoll would like to see the development of the Lover’s Lane subdivision. “It’s a great spot. It doesn’t make sense to keep that portion in Ag zoning. Both the Gardens Gate project by the Health Club and the Lake Mendocino subdivision seem like three places to start.”
“This isn’t about being greedy,” says Nicoll. “We’re facing a serious crisis that will forever change our community, and I’m hoping all of us can work together to create the community we want for ourselves and our children,” he concludes.