Santa Rosa housing scarce before the fire — what now?

Firefighters work to contain the Tubbs fire at the Overlook apartment complex off of Bicentennial Way in Santa Rosa, Calif., on Monday, Oct. 9, 2017. Firefighters work to contain the Tubbs fire at the Overlook apartment complex off of Bicentennial Way in Santa Rosa, Calif., on Monday, Oct. 9, 2017. Photo: Gabrielle Lurie, The Chronicle Photo: Gabrielle Lurie, The Chronicle Image 1 of / 74 Caption Close Santa Rosa housing scarce before the fire — what now? 1 / 74 Back to Gallery

The fires that destroyed at least 2,000 homes and other structures in the North Bay could put more upward pressure on rents but also cause buyers to think twice before purchasing a home in the ravaged region.

In June, voters in Santa Rosa narrowly rejected a measure that would have implemented rent and eviction controls. As in many Bay Area cities, rents there have been rising because the supply of new homes has not kept up with demand, which in Sonoma County is being driven largely by the growing industries of tourism, wine, beer and cannabis.

The rental vacancy rate in Sonoma County last year averaged 2.3 percent, compared with 3.3 percent in California and 5.9 percent nationwide, according to U.S. Census Bureau data.

“We didn’t have surplus supply at all. Now we have an awful lot of people who don’t have a place to live, and they may not have a place to work,” Santa Rosa City Councilwoman Julie Combs said. “We cannot rebuild fast enough, even if everyone has adequate insurance, which I’m doubting. Access to builders, construction workers and construction materials will be limited. We are talking about a year of recovery.”

Combs said she expects that rents and housing prices will continue to go up and “our workforce will not be able to afford that.”

On Tuesday, RentCafé.com, an apartment search website, said the average rent in Santa Rosa rose 6.4 percent in September year over year, the steepest increase of any Bay Area city.

“There had been plans to bring rent control (back) to the ballot in November 2018. This strikes me as making that more urgent,” Combs added.

The supply of places to buy or rent in the Wine Country also has been diminished by the conversion of homes to vacation rentals. Last year the Sonoma County Board of Supervisors prohibited new permits for vacation rentals in many unincorporated areas popular with tourists. Napa County and the cities of Sonoma and Healdsburg also have prohibited or limited them.

It’s hard to quantify the impact of the fire on home prices and rents without knowing how many were destroyed, where they were located and what type they were. The total housing stock — including homes and apartments — is about 60,000 units in Napa County and 200,000 in Sonoma County. Santa Rosa, the Bay Area’s fifth-largest city, has about 70,000, said Aaron Terrazas, senior economist with Zillow, a home-search website.

If the majority of homes destroyed were villas and estates, “it would have a very minor effect. There is a lot more supply in that upper tier. If it was affordable housing, we could see rents begin to increase as people look for alternative housing arrangements,” Terrazas said.

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When it comes to home sales in Napa and Sonoma counties, “I think it will cause a slowing of buyer demand,” as people assess whether they want to live in a danger zone, said Gerry Snedaker, a broker with Better Homes and Gardens Real Estate Wine Country Group. “I don’t think prices will fall, but they will stabilize” at their current rate of appreciation — around 6 percent to 8 percent a year.

Snedaker agreed that previous demand for luxury homes has led to a surplus in that sector. For the market overall in Sonoma Valley, there is a three-month to four-month supply of inventory, which means it would take about that long to sell all homes on the market at the current pace of sales. However, 25 percent of homes on the market are listed at $3 million or more, and for that segment “there is a 38-month supply,” Snedaker said.

Some of those homes could be taken off the market if their owners rent them to people waiting for their homes to be rebuilt, he added.

Many people who lost homes are just beginning to figure out where they will live. Saraj Cory, who lost her home on Mark West Springs Road and owns a company that makes food processing equipment, is living temporarily in her company’s industrial building. Cory, a ham radio operator, has already heard from five ham operators who offered her family — including husband, teenage son, two cats and a dog — a place to live. Her husband’s sister in Bodega Bay and a friend in San Jose have also offered lodging.

Westin Miller, an adviser with Pinnacle Capital Mortgage, and his wife, Amy, bought a house in Larkfield, north of Santa Rosa, in April. “We could have bought in Marin, but we really did not want to have to be stressed paying $4,000 a month,” he said. Miller moved his business from San Rafael to Windsor, and Amy got a job in the intensive care unit at Santa Rosa Memorial Hospital.

Now the only thing left in their neighborhood is a line of chimneys, a few melted cars and ashes. He’s staying temporarily with his parents and working out of an office in Novato.

His gut feeling is that the real estate market “will come to a bit of a halt as people sort things out. Things like appraisals, home inspections, any repair work” could be delayed if people who do those jobs are displaced, he said.

“We are going to rebuild and live there,” Miller said. But others may decide rebuilding is too hard and move away.

Combs said the Santa Rosa City Council will be looking at ways to speed up reconstruction. It could contract with additional plan reviewers “so people can get fast, maybe over-the-counter building permits.”

Owners seeking to rebuild apartment complexes as they were could get speedy reviews, she added. It will take longer to replace single-family homes, because the city will have to deal with each homeowner individually.

“If people are ready to rebuild, I’m ready to help them rebuild, even if it’s bigger, even if it’s smaller” than their original house,” Combs said. “I’m hoping we can convince them to build an additional dwelling unit (on their property) and help others out.”

Kathleen Pender is a San Francisco Chronicle columnist. Email: kpender@sfchronicle.com Twitter: @kathpender