Wildfires Threaten to Further Strain Spokane Area’s Housing Market: ‘It’s Going to Have a Huge Impact’

(TNS)—Sitting at home in Medical Lake (Washington) watching news coverage of the Old Trails fire sweeping through northwest Spokane, Cindy Altheide’s heart ached for the people forced to flee their homes, not knowing what they would return to — or what the years ahead may hold.

Three years earlier, Altheide and her husband John lost their dream home in the Gray fire, one of more than 360 houses destroyed by two blazes in Spokane County on the same day. Unlike many of their neighbors, the couple had their home rebuilt in less than a year, thanks in part to their own experience in the insurance and mortgage businesses and the fact that the house had been constructed just four years before the fire.

But Altheide said recovering from the Old Trails, Autumn Lane and Fairview fires—which together had burned more than 10,000 acres and destroyed over 900 structures as of Friday—could take far longer. Fire officials have not yet specified how many of those structures are houses.

“It’s going to be a jump in the housing market,” she said. “Let’s say there’s 750 houses lost. That’s 750 houses that the Spokane area did not intend to build.”

That level of demand will quickly overwhelm the capacity of experienced builders in the area, said Altheide, a retired mortgage lender who financed builders. Even if construction firms come from farther away, she said, rebuilding the lost housing could take years.

Lee McIntyre, president of the Spokane Association of Realtors, said that even before the fires, the Spokane area had 20,000 to 30,000 fewer homes than would have been ideal to stabilize the local housing market. Families who have lost their homes to the fires and have the means to buy another home now, he said, are likely to do that while new homes are built on the land scorched by the fires.

“What that’s going to do is allow our market to spike for sales, and then our inventory is going to deplete really quickly,” McIntyre said. “And we have a lack of inventory to begin with, and so that’s going to make our availability for homes even harder for those that don’t have the means. My biggest worry is our first-time homebuyers that don’t have as much means as some folks do. They’re going to struggle.”

McIntyre said the availability of housing in North Idaho could draw some wildfire survivors to relocate rather than waiting to rebuild on the same properties.

After Ben Cabildo and his wife Joyce lost their home to the Gray fire, they opted to buy a house in Spokane Valley rather than rebuild in Medical Lake.

“We didn’t rebuild because the area we were at, it’s pretty hard to rebuild,” he said. “It takes years and it will take a lot more dollars than we were able to get from the insurance.”

In addition to his age, Cabildo said the pain of losing the home they had worked so hard for was a factor in their decision to move after the fire.

“It doesn’t go away,” said Cabildo, 77. “In fact, it gets worse these days, because of the three big fires in Spokane. It’s painful that all the other people are experiencing the same thing.”

Joel White, executive officer of the Spokane Home Builders Association, said he spent all week on the phone with builders, gauging their capacity to jump into the rebuilding effort. Although the local home-building market was relatively slow before the fires, he said, their capacity is likely to be overwhelmed—even as other builders from the Tri-Cities, North Idaho and other nearby areas pitch in.

“It’s going to have a huge impact,” White said. “It’s going to have an impact in the short term on apartment housing and the rental markets, which will put upward pressure on pricing.”

Not everyone who has lost a home will choose to rebuild on the same plot of land, he said, but those who do may face higher costs to build a house that’s up to modern building codes. Even if that makes for a better home in the long run, some insurance plans may not cover the additional expenses.

White said one reputable local builder, whom he declined to name, had already been contacted by eight homeowners and couldn’t take on more jobs. Another challenge, he said, is that some larger builders may have trouble transitioning from a business model based on constructing multiple homes “on spec,” without a specific buyer lined up, to rebuilding homes with insurance payments from a fire.

“There’s no easy solutions here,” he said. “I don’t want to make it sound like we’re just going to be able to hammer out 500, 600, 700 homes quickly. It’s a multiyear build. If you look at the Gray and Oregon Road fires, some of those homes are still being built today.”

Steven Bourassa, director of the Washington Center for Real Estate Research at the University of Washington, said that although losing homes clearly has an immediate impact on the housing market, recent studies of wildfires in California and Colorado suggest they don’t have a major impact in the longer term. The experience in California, he added, shows that insurers raise premiums and may not provide home coverage at all in wildfire-prone areas.

“There are over 200,000 households in Spokane County, so this represents a small fraction of the total,” Bourassa wrote in an email. “There may be a short-term bump in demand for temporary accommodation, but I would not expect much of a longer-term effect on the market. Some households affected by the wildfires may ultimately decide to shift to different locations within the Spokane market or elsewhere.”

Spokane Mayor Lisa Brown said building more housing already has been a priority for the city government, but rebuilding after the fires will present new challenges and opportunities.

“We already have a tight housing market,” she said. “That’s going to continue, and it will continue to provide some upward pressure on rents and housing prices. On the other hand, we have this opportunity, which we’re already taking advantage of, to talk about assistance at the federal and state level.”

In an interview Friday, Brown said her team was having “preliminary conversations” with the office of Gov. Bob Ferguson about tapping into the state’s Housing Trust Fund and incentive programs to help rebuild.

“This will unfold over the next few months, utilizing both the governor’s emergency powers and the next legislative session,” she said. “We’ll be very focused on housing, recovery—in the sense of moving hazardous material and debris and so forth—and protecting people and making sure they’re safe and have at least interim housing.”

Brown said her team had been meeting daily to discuss ways to expedite permitting and other processes to speed up the rebuilding process, while taking necessary precautions due to toxins and other dangers left behind by a fire. She said Spokane’s government will have “an all-of-city focus” on applying the lessons of recent urban wildfires, such as the 2025 fires in the Los Angeles area and the devastating 2023 blaze in Lahaina, Hawaii.

Spokane County’s director of planning, Scott Chesney, said local government officials also have learned from the Gray and Oregon Road fires in 2023.

“Spokane County learned a lot of these lessons in ’23 with the fires in Medical Lake and Elk,” he said. “So we had a little bit of a playbook that we could dust off, and we’ve shared that with the city, our colleagues over there, because they’re in this for the first time.”

Chesney said Spokane County’s comprehensive plan, which his office was in the process of updating when the fires hit, foresees adding 100,000 new residents in the next 20 years to a current population of over 550,000.

“Now we’ve got to rebuild 500 to 700 new homes just to get back to where it was before,” he said. “And the challenge is going to be significant in the sense that the bigger home builders are not really set up for this kind of operation.”

Fire survivors whose insurance covers the full cost of rebuilding or replacing their homes, Chesney said, may be able to “move ahead of the line” for permitting and building. Those who are underinsured—like most who lost their homes in the Gray and Oregon Road fires, according to the state’s Office of the Insurance Commissioner—will need more help.

“Others could struggle for years to really recover from this,” he said. “Putting it another way, we’re still processing a significant amount of rebuilding permits from the 2023 fires, three years later. So this is going to be a three-, four-, five-year effort at best to rebuild.”

Pam Parr, executive director of the Spokane Housing Authority, said short-term displacement of fire victims could have an especially acute impact on relatively low-cost housing in the area.

“It puts a lot of pressure on affordable housing stock, and this is partly because displaced households will seek lower-cost options,” she said. “I also think it puts homeowners who are losing their homes into the rental market. That creates this sudden spike in demand.”

Parr said the staff of the Spokane Housing Authority, which owns low-income apartment complexes and provides vouchers and other resources to help Spokanites afford homes, has been personally affected by the fires, with 15 of their 95 employees displaced and at least two losing their homes. She worries that rising insurance premiums will be especially hard for low-income residents to afford.

Chesney said higher demand will naturally boost prices for building materials and other products, but fire victims should be wary of price gouging and other dishonest practices by people trying to take advantage of their desperation. The Disaster Assistance Center government agencies have set up at Shadle Park High School offers resources to navigate the overwhelming process of rebuilding, he said.

Spokane County Assessor Tom Konis said his office is prepared to do aerial imaging of the destroyed homes as soon as the airspace has been reopened. As they did after the 2023 fires, his team will zero out taxes for property improvements from the date of destruction, so homeowners will only owe taxes on their land.

The Spokane Region Long Term Recovery Group, which was created in the wake of the Gray and Oregon Road fires, also will apply the lessons of the 2023 fires as it helps residents navigate the recovery process. Dick Ziehnert, president of the charitable group’s executive board, said it will be especially important to get all the fire victims housed before winter arrives.

In the wake of the 2023 fires, Spokane County made changes to expedite its permitting processes for rebuilding, Chesney said. Those include reducing the fee for a demolition permit and, in areas outside city limits, a sort of “grandfather” provision that exempts projects from some current regulations as long as they’re rebuilding substantially the same home that was destroyed.

In the city, he said, recent amendments to the state’s Growth Management Act could help replace single-family homes with two-, three- or four-unit buildings to accommodate more residents. And the county’s building and planning departments will add staff to help expedite review of plans and permit applications.

Unfortunately, Chesney said, this month’s fires won’t be the last.

“It’s knowledge that nobody wanted to acquire, but now that we’ve got it, it helps us in the future,” he said. “It doesn’t take a cynic to realize that this is not the end of it. In fact, it may not even be the end of it this summer.”

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