Hell Out West
Plus: BlackRock and real estate, SCOTUS and Trump, and more...
L.A. fires nowhere near contained: So far, at least 10 people have been killed by the wildfires in and around Los Angeles. More than 35,000 acres have been consumed, and more than 10,000 structures destroyed. Wind speeds had lessened last night, only to pick up again this morning, with gusts reaching 81 miles per hour in L.A.'s northern mountains. A new fire broke out last night, named the Kenneth fire, in the West Hills. The Palisades fire and Eaton fire are at 6 percent containment and 0 percent containment, respectively, both now ranking among the top five most destructive fires in California's history. ("Containment basically measures the fire's potential for growth, not how much of it has been extinguished," notes The New York Times.)
The California National Guard has been called in by Gov. Gavin Newsom, and President Joe Biden has pledged that the federal government will cover the area's emergency response costs for the next six months. (There are only a few days left in Biden's term, so it remains to be seen whether President-elect Donald Trump will maintain this commitment.) The Pentagon has sent in Navy helicopters to help with the firefighting.
Get your morning news roundup from Liz Wolfe and Reason.Get your morning news roundup from Liz Wolfe and Reason.
So far, at least one man has been arrested for trying to start fires in Woodland Hills, near Calabasas, riding around on a bike using a blowtorch trying to set Christmas trees and garbage cans on fire. He seemed like he was "on something," according to one resident who allegedly helped to detain the suspect. Los Angeles police have not confirmed that the Kenneth fire is attributable to arsonists, but the man has been taken into custody.
("If these fires are arson, how society handles this crime and punishment will have ramifications for decades to come," writes venture capitalist Katherine Boyle on X. "What's scary about 'new' forms of violence is that the societal narrative shapes whether they repeat or not. It's called a 'cycle of violence' for a reason; copycats valorize the original crime. Crimes come in waves and eras. School shootings are relatively new, whereas the age of the serial killer seems to have faded. We do not want an arson age.")
Reports of widespread looting are also worrying residents; those whose homes survived fear that their possessions will be gone when they return. Los Angeles police have been making arrests, attempting to maintain a semblance of order amid a disaster situation. "Shame on those who are preying on our residents during this time of crisis," said L.A. County Supervisor Kathryn Barger at a press conference yesterday. Curfews are being implemented in the areas most affected by the fires.
The real red pill will come when people try to get permits to rebuild their homes and face multiyear waits.
This might finally spell doom for the Coastal Commission, which should not even exist as an organization. https://t.co/LNIooLoTIX
— Elon Musk (@elonmusk) January 10, 2025
Is BlackRock destroying America's housing markets? (No.) "Shadowy private equity giants are buying up the housing supply in communities across New York, leaving everyday homebuyers with fewer and fewer affordable options," said New York Gov. Kathy Hochul (D) yesterday as she introduced a new law aimed at making it harder for hedge funds to buy up single-family homes in the state.
Hochul's proposing legislation doesn't ban the practice outright, but rather forces a 75-day waiting period before such firms could place bids on homes hitting the market.
The reason why Hochul is tackling this? Well, because progressives (and other random commentators) frequently—and erroneously—like to claim that BlackRock has gobbled up so much American housing stock that normal people can no longer buy houses.
Take even the Associated Press's write-up: "Private equity firms own more than 500,000 homes nationwide, according to the governor's news release, with some estimates expecting the firms to own up to 40% of the single-family rental market by 2030. There were more than 145 million housing units in the country in 2023, according to U.S. Census data." I'm sorry, what? How would you go from currently owning 0.3 percent to owning 40 percent over the course of five years? Are BlackRock and others planning to buy 57.5 million housing units? "Experts" might say that this is the plan, but that's because this area in particular is rife with people not knowing what they're talking about.
Later, that same article claims that "non-individual investors" own a quarter of single-family homes, per 2021 data. But this includes landlords who have formed limited liability companies (LLCs), which is…a quite common practice.
It's true that, in some places, whole neighborhoods are sometimes sold to investors, such as a 124-home subdivision in Conroe, Texas, for which "the winning $32 million bid came from an online property-investing platform, Fundrise LLC, which manages more than $1 billion on behalf of about 150,000 individuals," per The Wall Street Journal. ("We certainly wouldn't expect every single-family community we sell to sell at a 50% gross margin," said the builder's finance chief, Bill Wheat, after the sale.)
Places hit harder by this phenomenon include not New York but rather Houston, Miami, Phoenix, and Las Vegas—places with a low-ish cost of living and a fair amount of starter home housing stock. In some cases, investors buying up housing stock and then renting these homes out could even be a good thing: If you are a young family who does not have enough saved up to buy a home in a starter-home subdivision, this allows you to rent. (Long-term, of course, buying a home is a major means by which people start building wealth, so there are trade-offs here.) Still, this isn't even a widespread practice in New York, so it's unclear why Hochul believes this warrants state intervention.
See this for what it really is: An attempt by Hochul to look like she's addressing the issues contributing to housing affordability, when in reality she's doing nothing of the sort. Making it marginally harder for BlackRock to purchase homes is a silly, bad fix. Putting pressure on city governance to end rent control and rent stabilization, slashing regulations that make it hard to build new housing, and loosening or abolishing zoning and land use requirements would all have a greater effect.
Scenes from Los Angeles: Special report.
Wildfires ripping through the Palisades in Los Angeles, California, seen from space yesterday
Image captured by the Copernicus Sentinel-2 satellite not long after the fire broke out ???? pic.twitter.com/IaFtWvvxQE
— Latest in space (@latestinspace) January 8, 2025
(More on the satellite that took the picture here.)
Thousands of structures have been destroyed in Pacific Palisades, Los Angeles, California, as fire crews work to contain the 17,000-acre blaze that started there Tuesday. It is now the most destructive fire in L.A. history.
????: Kit Karzen / Marcel Melanson / Unknown / Planet pic.twitter.com/NSfelzylMr
— Daily Overview (@DOverview) January 9, 2025
My buddy called me. I'm going to check on the house and I need someone to come with me, he said. His house is in Altadena, in the hills on the edge of the Eaton Fire. Did his neighborhood burn, is it still burning. Nobody knows. There are Facebook groups with people's videos of… pic.twitter.com/CyoAsa3vSP
— Delicious Tacos (@Delicious_Tacos) January 9, 2025
And this, from writer Meghan Daum—who lost her home and all her possessions—eloquently details what's happening, what it's like to evacuate, what it's like to lose everything.
QUICK HITS
- "The U.S. Supreme Court on Thursday denied President-elect Donald J. Trump's emergency bid to halt his criminal sentencing in New York, all but ensuring it would proceed as planned on Friday," reports The New York Times. "Although Mr. Trump had argued that being sentenced 10 days before his inauguration would distract from the presidential transition, the majority held, 'The burden that sentencing will impose on the president-elect's responsibilities is relatively insubstantial.'"
- "If Carr is right, modern technology's always-open window to the outside world makes recharging much harder, leaving many people chronically depleted, a walking battery that is always stuck in the red zone," writes Derek Thompson for The Atlantic in a must-read essay ("The Anti-Social Century). "In a healthy world, people who spend lots of time alone would feel that ancient biological cue: I'm alone and sad; I should make some plans. But we live in a sideways world, where easy home entertainment, oversharing online, and stunted social skills spark a strangely popular response: I'm alone, anxious, and exhausted; thank God my plans were canceled."
- Hard agree:
I'm pretty stubborn in my belief that the reason so many prominent Dems are so breath-takingly incompetent is b/c they haven't had to address an adversarial press in 2 decades https://t.co/7GB9mVQFXQ
— PoIiMath (@politicalmath) January 9, 2025
- "Canada is drawing up plans for extensive tariffs against US products if Donald Trump follows through on his threat to put 25% levies on Canadian goods, according to people familiar with the matter," reports Bloomberg.
