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The losses from this month’s LA fires, which destroyed entire neighborhoods, are staggering and growing. Our hearts go out to those who have been impacted, and our teams are working hard to ensure that all colleagues and transferees who have been displaced—or are at risk—have access to the support they need.

On Jan. 8, the White House approved a major disaster declaration for California. In a Jan. 9 news release, the Federal Emergency Management Administration (FEMA) said, “As multiple, devastating fires continue to threaten Southern California, FEMA and federal partners are leaning in to support the state-led response.”

While we’ve yet to see the full impacts of this disaster, as mobility professionals, it’s part of our Duty of Care – our commitment to our people – to stay informed and responsive. There’s a lot of information to consume and wrapping your head around it all can feel impossible. Here’s what you need to know, in a nutshell, as it relates to employee mobility into and out of the affected zones and surrounding areas:

Rental Prices Surge Amid Spike in Demand

Unsurprisingly, the rental market has taken a huge hit as those displaced by the fires seek alternate housing in neighboring communities. This spiking demand has led to surge pricing for the remaining inventory, particularly in zones deemed safe and less prone to fire damage. Not only is this straining relocation budgets for employers, but employees may also be more reluctant to relocate to wildfire-prone areas, impacting talent strategies. Some employers are considering virtual or alternative work arrangements to help offset these challenges.

Insurance Crisis Underscores the Need for New Solutions

California’s insurance crisis is intensifying as wildfires and natural disasters become more frequent and severe. Major insurers like State Farm and Allstate have pulled back, citing unsustainable financial risks due to increasing claims and regulations that limit their ability to price risk accurately. The state’s FAIR Plan provides a safety net, but it has significant limitations, including a $3 million coverage cap and insufficient funds to handle escalating claims.

Emerging alternatives, such as community-based insurance and parametric models, offer innovative approaches to complement or replace traditional coverage. However, experts are questioning the long-term viability of rebuilding in high-risk areas, suggesting that some regions may need to be abandoned to allow for environmental regeneration. The crisis highlights the need for a fundamental shift in balancing insurance market dynamics with climate resilience and sustainable development.

Expect California’s Cost of Living to Swell

The wildfires will drive up the cost of living in ways that go far beyond housing and insurance. These are just a few of the rising costs we can expect to see in the very near future:

• Utility costs will rise as power companies invest in wildfire prevention and infrastructure upgrades.
• Food prices will spike due to disruptions in agriculture and supply chains, especially in California’s farming regions.
• Poor air quality will lead to increased healthcare expenses and higher demand for protective items like air purifiers and masks.
• Road closures and fuel supply issues will push up transportation costs, adding to the financial burden.

For global mobility programs, these impacts mean that relocation budgets must account for more than just housing allowances. Support should extend to utilities, groceries, and health-related expenses while offering resources to help employees manage safety and well-being in wildfire-prone areas. Companies that take a holistic approach to addressing these challenges will be better equipped to ensure successful relocations.

Tax Relief to Help Impacted Businesses and Individuals

The Internal Revenue Service on Friday, January 10 announced tax relief and postponed retirement plan contribution deadlines for victims of the California wildfires. Impacted taxpayers now have until October 15, 2025, to file various federal individual and business tax returns and make tax payments.

According to the announcement, the October 15 deadline will apply to 2024 contributions to individual retirement accounts and health savings accounts for eligible taxpayers.

In addition, the deadline will apply to individual income tax returns and payments normally due on April 15 and calendar-year corporation and fiduciary returns and payments normally due on April 15.

Helpful Links and Resources

Whether you’re supporting employees through this tragedy or are looking for resources to stay informed as this situation evolves, we recommend starting with the following links:

CAL FIRE – The Department of Forestry and Fire Protection: Access maps and data on containment rates, number of emergency responses, fatalities, and more.

Disaster Recovery Centers: Located in UCLA, Pasadena, and Altadena, these Recovery Centers are open to the public and provide information from FEMA and the U.S. Small Business Administration. Disaster survivors can get help applying for federal assistance, learn about the types of assistance available, learn about the appeals process and get updates on applications.

Southern California Relocation Council: As a regional group recognized by Worldwide ERC®, SCRC serves as a dynamic hub for local and regional relocation professionals in Southern California to connect, grow, and lead. SCRC has led the charge in collecting mobility-related support and resources in a dedicated forum.

Emergency Preparedness Strategy Guide: A bite-sized guide to everything you should know about how to uphold your legal and moral obligation to ensuring the safety, security, and well-being of your relocating talent and their families. Learn today’s best practices for developing an Emergency Preparedness Action Plan, and our recommendations for communicating key info with remote employees or talent on-the-move.

Stay tuned as we share more information and insight into the current and future impacts of this disaster and how it underscores the importance of a robust emergency preparedness plan in our mobility programs.