In the wake of devastating wildfires in Los Angeles County, a new trend is emerging: investors are purchasing a significant number of vacant lots in burn zones, raising concerns about the future of impacted communities.
Investor Activity Increases in Burn Zones
A recent report from Redfin found that investors are scooping up nearly half of the vacant home lots being sold in L.A. County burn zones. Following the Eaton Fire, which destroyed thousands of homes in and around Altadena, signs appeared stating “Altadena is not for sale.” However, nearly a year later, many families have determined rebuilding is financially out of reach, leading to increased sales to investors.
Analyzing sales data from July, August, and September, Redfin researchers discovered that approximately 40% of vacant lots in Pacific Palisades went to corporate buyers. In both Altadena and Malibu, that figure rose to 44%. This marks a substantial increase compared to 2024, when neither Pacific Palisades nor Altadena saw any vacant lot sales during those months. Malibu did see some sales in 2024, but only 21% were to investors before the fires.
Sheharyar Bokhari, Redfin’s principal economist, explained, “It’s not uncommon to see that when disasters hit a place, investors come in.” He added that the difficulty in valuing vacant lots can create opportunities for investors to purchase properties at lower prices with the intention of reselling them for a profit.
Concerns Over “Disaster Capitalism”
The trend has sparked anxieties among residents, particularly in Altadena, a historically Black community. Zaire Calvin, who lost his home and sister in the Eaton Fire, described the situation as “disaster capitalism,” warning that rebuilding could become a pursuit driven by capital rather than a return home for families. He stated, “It’s like they’re preying on us while we’re still praying for hope and help.”
Similar findings were published in October by the nonprofit Strategic Actions for a Just Economy, which reported that 49% of sales in the Eaton Fire burn zone went to corporate entities. Some efforts are underway to mitigate speculative development. Assembly Bill 851, signed into law by Gov. Gavin Newsom in October, prohibits unsolicited offers on properties in burn zones until 2027.
The Greenline Housing Foundation is actively purchasing lots in Altadena from distressed sellers, with the intention of rebuilding homes and selling them at below-market prices to first-time buyers.
The Future of Rebuilding
While investor activity isn’t necessarily detrimental, according to Bokhari, investors “can afford to clean up lingering environmental damage and build homes that comply with the latest fire safety codes.” However, uncertainty remains regarding the types of homes that will be built – whether for sale or rent – and whether these developments will benefit long-term residents and contribute to generational wealth building in communities like Altadena.
Lori Gay, president and CEO of Neighborhood Housing Services of L.A. County, noted that while 61 lots in Altadena sold between July and September, more are expected to become available. She emphasized that “Most families we’ve seen want to go back home. They’re not trying to leave. They’re trying to figure out how to stay.”
Frequently Asked Questions
What percentage of vacant lots in Altadena and Malibu are being purchased by investors?
Approximately 44% of vacant lot sales in both Altadena and Malibu during July, August, and September went to investors, according to a Redfin report.
What is Assembly Bill 851?
Assembly Bill 851, signed into law in October, outlaws unsolicited offers on properties in burn zones until 2027.
What is the Greenline Housing Foundation doing in Altadena?
The Greenline Housing Foundation is buying lots from distressed sellers in Altadena and intends to rebuild homes to sell at below-market prices to first-time buyers.
As communities begin the long process of rebuilding, will the influx of investment ultimately serve to restore and revitalize these areas, or will it accelerate displacement and reshape the character of these historically significant neighborhoods?
