How Gatsby is Managing Investments and Supporting the Community During the LA Wildfires
As the wildfires continue to devastate Los Angeles County, we at Gatsby want to address the questions we’ve received regarding the status of our active investment projects as well as future projects in Los Angeles.
We understand this is a time of uncertainty, and we want to provide as much information and clarity as possible.
To that end, here are the answers to some of your most pressing questions about how Gatsby is managing investments and supporting the community during the LA wildfires.
1. Are any of Gatsby’s projects impacted by the fires?
None of Gatsby’s properties have been impacted by the current wildfires, and at this time, none are in high-risk zones. Our team will continue to monitor the situation and keep you informed of any developments.
2. How will the current wildfires affect Gatsby’s projects?
The fires have reduced housing inventory in a market already facing a serious housing shortage. Fortunately, Gatsby has spent the last few years adding large multi-family units to the housing market, putting us in a strong position to help meet the urgent demand for family-friendly housing. We have already received numerous inquiries from individuals and families actively seeking housing, and we are helping to match them to suitable accommodations.
3. Is the availability of construction materials affected?
At this time, we do not expect the current wildfires to impact the availability of construction materials for our active projects. However, the recovery from this devastation will likely take years to complete as those affected go through a multi-stage rebuilding process. The first priority, of course, is to contain the current fires. Then locals can begin clearing and cleaning, rebuilding infrastructure, and preparing for reconstruction.
So, while we do not anticipate immediate supply chain disruptions, we will continue to monitor evolving conditions during the recovery and be prepared to address any potential challenges as they arise.
4. How are Gatsby’s properties protected against fire?
All of our properties are covered by robust insurance policies, including:
- Builder's Risk Insurance. We carry builder's risk insurance with fire coverage up to the total cost of construction on all developments. This policy would reimburse us for costs based on the construction progress at the time of the loss, ensuring our expenses would be covered.
- Landlord Policies for Built and Rented Properties. Completed and rented properties are protected by landlord insurance. This includes replacement cost coverage to restore the property to its original condition and covers loss of rental income during the rebuilding process.
5. What happens if a fire impacts a property?
In the unfortunate event of a fire affecting a property, our insurance policies are designed to minimize any financial impacts. In this case, we would reevaluate the project following the fire to determine the most fiscally responsible path forward, keeping investors in the loop at every stage.
6. How is Gatsby supporting the community during the wildfires?
Gatsby has a long-standing commitment to developing more LA-area dwelling units to help alleviate the pressure of the housing shortage. Since 2016, we have added over 100 units to the local housing supply by building ADUs (additional dwelling units) during single-family flips and converting single-family lots into multi-family buildings with 4-10 units each. As residents displaced by the fires look for temporary housing, we are proud to support them in finding comfortable, well-designed accommodations from which to rebuild their lives.
7. What will the long-term impact of the fires be on the LA housing market?
The devastating wildfires in Los Angeles have not only caused immense personal loss but have also further strained an already tight housing market. With lower inventory levels, the destruction of homes will likely increase local demand.
While this dynamic may contribute to rising property values, our focus remains on sustainable, long-term growth that balances strong investor returns with the need for attainable housing. A resilient market benefits from a thoughtful investment strategy that supports rebuilding efforts, strengthens communities, and ensures that Los Angeles remains a place where people can live, work, and thrive.