How long will it take LA to rebuild in the aftermath of this month's wildfires? Here are a few comparisons from recent fires:
Three years after the Marshall Fire destroyed 1,105 homes in Boulder County, about two-thirds have been rebuilt....
It took nearly seven years to completely rebuild after a 2012 fire that destroyed hundreds of homes in Colorado Springs, and homebuilders are still finishing up work after a 2017 fire in Santa Rosa, Calif....
In August 2023, wildfires devastated the island of Maui, completely destroying the town of Lahaina.... As of last week, roughly a year and a half since the fires, a total of three of those homes have been rebuilt....
In Paradise, 90% of the town, including 18,000 structures, was destroyed and 85 people were killed.... Six years later...the city is constructing around 500 homes a year and has rebuilt a third of its homes....
It's gonna be a while. Hell, Hurricane Harvey hit Houston eight years ago and they're still fighting over recovery funding.
For the record, I live here in Los Angeles, next to Brentwood and Pacific Palisades, and the vast majority of it is not burned down, or impacted by the fires much, except air quality for a while, and of course a lot of natural destruction, but my heart goes out to those in Pacific Palisades and nearby, as well as Altadena, and a few other places where a smaller number of homes were burned, whose lives were immeasurably impacted, and it definitely will take a long time to rebuild those neighborhoods and communities (not too too long I don't imagine though).
+1
Fires were devastating for many, though the community of Greater L.A. survived okay.
Fires destroyed roughly 12,000 homes and other structures. In City of L.A. alone, there are 500,000+ homes owner-occupied + 800,000+ renter-occupied. Abundant resources here to help those in need. Not quite equivalent situation to smaller towns that were largely wiped out.
Sounds like aid from DC might be akin to hostage-taking. As much as possible, I'd suggest Newsom and Dems not surrender to Johnson and Trump.
Home owner's insurance might be/will be a significant issue.
Presently, it was very difficult to acquire how owners insurance in the Pacific Palisades: this story has been well covered in the media. Many residents of the Palisades already had to turn to the California sponsored insurance plan, FAIR.
Without home owners insurance debt is near impossible to acquire. Further, even without debt, some folks will refuse to sink millions into a fire prone area, without a back up plan/without insurance.
FAIR, by many reports, is likely now insolvent. Further, its possible that the size of the insolvency of FAIR is too large for California to fixed, without Federal support. Note, who our President is, and how Newsome and Trump get along.
Second issue around FAIR. The policy limit, historically, is $3 million: while that figure is very high on a national level, it will be too low for many of the Palisades rebuilds.
Further, even if one does not use debt, how many people want that much risk without insurance, in a fire prone area.
Thus, rebuilding requires fixing the home owners insurance market for high risk areas, such as the Palisades.
How much of the value(s) in these properties is the structure and how much the land? Is the rebuilding cost of a property someone bought for three million dollars indeed three million dollars or was a big chunk of the purchase price really the land?
Land by a large stretch, though reduced somewhat with the community destroyed.
As an outsider, I'd assume a lot of the land's value was that you could put a big luxurious house on it. If the area is rendered essentially uninhabitable, that supposedly intrinsic land value decreases a lot.
"...Further, its possible that the size of the insolvency of FAIR is too large for California to fixed, without Federal support. ..."
This seems extremely unlikely although no doubt California would like money from the Feds.
"Second issue around FAIR. The policy limit, historically, is $3 million: while that figure is very high on a national level, it will be too low for many of the Palisades rebuilds."
People who can afford to build $3 million dollar houses should not be getting subsidized insurance.
James B. Shearer
"This seems extremely unlikely although no doubt California would like money from the Feds."
Estimates vary, but some believe the FAIR plan needs 15 - 20 billion. It would be a challenge, perhaps not impossible, for California to float that amount of additional, Municipal debt over the next year or two.
"Estimates vary, but some believe the FAIR plan needs 15 - 20 billion. It would be a challenge, perhaps not impossible, for California to float that amount of additional, Municipal debt over the next year or two."
California's annual budget is on the order of $320 billion. Of course they could up with the money if they had to. Probably a one year 10% income tax surcharge would do it.
James B. Shearer
"Probably a one year 10% income tax surcharge would do it."
I don't doubt you are a wise man: however, I suspect you would have a very brief political career. lol
Note, I saw another estimate that FAIR will need an additional $100 billion. To be clear, while I know the number is large, I have no clue on how undercapitalized FAIR will be, once the claims start rolling in.
"Note, I saw another estimate that FAIR will need an additional $100 billion. ..."
For the current losses? Or is this over the next 10 years or something if they don't raise their rates or limit their coverage?
They shouldn't?
Why? Should there be a limit?
Crissa
"Should there be a limit?"
There is no legal limit. Rather, its a market limit. Unless California wants to materially increase the yield on these new (potential ) bonds, its not clear there is a market for that size of new state debt.
"Why? Should there be a limit?"
I don't really think people should get subsidized insurance at all. But at least you can make a case for providing it to poor people in existing houses who are seeing large and unexpected increases.
But to give a subsidy to a rich person building an expensive new house in an unsafe area. Why would you want to do that?
James B. Shearer
"But to give a subsidy to a rich person building an expensive new house in an unsafe area. Why would you want to do that?"
The answer is simple: the Palisades is a core, Democratic honey pot to raise money....
I see! You think that insurance is free money, and not, in fact, years and years of premiums paid.
Weird.
"I see! You think that insurance is free money, and not, in fact, years and years of premiums paid."
Suppose the rich guy's $3 million newly constructed house has a 1% chance of burning down for a total loss every year. Then his yearly unsubsidized insurance premium would be at least $30 thousand a year. If California chooses to offer him a subsidized FAIR policy for $10 thousand their expected loss is at least $20 thousand a year. On a million homes this would be an expected loss of $20 billion dollars a year, every year. Of course in practice some years would be less and some years would be more but over time the expected average loss would be $20 billion a year.
"fixing the home owners insurance market for high risk areas"
Translation: build back in a manner that compensates for the fire risk. Building exteriors must be entirely non-flammable materials - including the roof! - and the lot should have defensible space for 20' or so around the building, meaning no bushes or trees right outside.
If we build like that we'll see insurance companies returning. The fact that huge swathes of CA cities are not built like this is exactly why they left. They saw this disaster coming, and didn't want to be on the hook for it.
Five Parrots in a Shoe
" build back in a manner that compensates for the fire risk. Building exteriors must be entirely non-flammable materials - including the roof! - and the lot should have defensible space for 20' or so around the building, meaning no bushes or trees right outside."
Have you ever been to the Palisades? Good luck with that concept...
That's just not something that can be done. All building materials can burn at some point. Even if you choose concrete shingles and siding, they will break and crumble at a certain point. The sealants will catch fire.
And it's not the proximity of trees and brush, but whether they can generate fire that can ladder into the structure.
It's not possible to build houses that are completely fire-proof. As you say, enough heat will destroy any building material. However, it is definitely possible to build houses that will withstand grass and brush fires, which are neither tremendously hot nor do they burn in a particular spot for a long time.
If you live, like I do, in a densely forested area, you want to clear an area around your house a tall tree height from your house in every direction. Again, a house can be built to be fire resistant enough to survive a forest fire as long as the fire is not close to the house and no burning trees fall on your house.
Why do these areas have to be rebuilt? They'll just burn down again.
How has rebuilding been done in the other areas that burned recently? Are all the houses now fireproof? Are there programs for controlling flammable brush - that is are these areas going to be turned into deserts? Or do we have enough people with rakes to control the flammable material?
The problem is the same with flooding. Certain areas just keep getting flooded out but people are determined to rebuild. Flooding may be more of a problem nationwide than fires as the amount of water in the atmosphere increases.
Paradise offers a model
https://krcrtv.com/news/local/paradise-rebuilds-with-fire-resilient-infrastructure-a-beacon-of-hope-for-wildfire-prone-communities
Unless we're abandoning Los Angeles, and throwing away all the infrastructure that is already there, you have to rebuild somewhere. Where do you propose that has zero risk of natural disaster? Certainly nowhere on the West Coast (earthquakes), but also nowhere in the South (hurricanes) or Midwest (tornadoes) or Southwest (droughts) or Mountain West (fires). So that leaves you with... I guess Michigan (as long as blizzards aren't characterized as "natural disasters" since they rarely destroy property) and perhaps non-coastal New England? The very areas that the entire nation fled as soon as air conditioning was invented?
Agreed. But density must be reduced. And the land allowed to go to scrub or whatever naturally grows there. Also the property lots remain small so no English manor lawns.
There's no way to make the, fireproof. Your stuff will still burn.
But we can make sure they have fire resistant roofs and siding, sufficient water supply to maintain defenses during fires, etc.
Another reason to have higher-density housing. If they can solve the permits issues for multi-family dwellings the way they promise they will for single-family homes, the State should prioritize the former.
Right? Rebuild it all with multifamily. Increase the transportation access to accommodate higher vehicle traffic.
Why would anyone want to live in a multi-family building if they can live in a single family home?
Why indeed! Except, weirdly, even the older stock of these multi family dwellings cost more per square foot to get into...
...sure seems like there's alot of unmet demand for multi family dwellings.
Because they can't buy in a single family home in Southern California. You can't even rent one for under $3k.
California needs housing, there is no place to build single family left within any reasonable commute to job centers. Multifamily is the only way to add a lot of housing in Southern California.
"Why would anyone want to live in a multi-family building if they can live in a single family home?"
For a while, I lived in a large apartment complex in DC, and I loved it. Great apartment, super-responsive onsite maintenance team, 24-hour concierge at the front desk, excellent gym etc., and groceries were across the street and work was a few blocks' walk away. I've also lived in a smaller (10-floor) condo building, and that was great, too: excellent community, etc. All-in costs much more reasonable than comparable single-family housing would have been, too (and that's without including soft costs like commute times or dealing with aggravating HOAs).
So, yeah, plenty of people would want to live in a multi-family building despite also being able to live in a single family home. Done right (or even done decently), they are great.
I remember when I was young living in LA there was a big fire that destroyed an entire neighborhood except for 1 house. I commented to my dad that the person who owned that house was “lucky “. My dad said no. For the next several years there would be rebuilding in the area with all the dust and disruption. Power outages, blocked streets, plumbing and sewer problems. And in the end, everyone in the neighborhood would have a new house except that one person. And other than a few things like pictures it was all just stuff that could be replaced. So when I see random houses that didn’t burn I think about what my dad said.
A lot of the people who lost their homes will collect their insurance and sell the land. New homes will likely be bigger and more modern. When the houses (particularly in the Alta Dena area) were built there were just a few contractors who built whole neighborhoods. I think that would be the best and most efficient way to rebuild. If everyone is trying to find their own contractor it will take a very long time.
That which was not insured will not be rebuilt. That which was insured will see insurers drag their feet and, aside from settling existing claims, drop homeowners. That which is no longer insurable because insurers have left, will have to wade through red tape for the state's pool. That which takes longer to start the rebuilding process will have higher costs, leaving a gap between insurance payout and actual construction cost. That which requires a bank loan will need to survive a laundry list of requirements, some of which cannot be met by a retiree on a pension and SS.
And so, some of the lots will remain empty for a decade or more.
"That which was not insured will not be rebuilt. ..."
Why not? If the owner can't afford to rebuild they will sell the lot to someone who can.
I assumed that some people who want to sell in such an area that is no longer insurable will find that their property values have plummeted. Rather than sell and recoup their losses, they are sucked into the sunk costs fallacy. Thus, I believe there will be some who will simply hold on for nearly a decade in a place right up against an area susceptible to wildfires.
I was wrong. Values of properties go up after the fires. https://www.npr.org/sections/planet-money/2025/01/23/g-s1-44265/california-wildfire-homes-insurance-prices-crisis
"I was wrong ..."
You weren't entirely wrong. I expect there will be a few lots that stay vacant for an extended period of time. Some owners will be lazy or undecided about what they should do and will procrastinate. And custom building a house involves a certain amount of work and red tape and delays. But over time new houses will be built on most of the lots.
Yeah, but Houston's hurricane bucks were not contingent on changing their government.
Here in Santa Cruz, construction has completed on only a couple dozen houses in the CZU Complex fire.
All reviews have been delayed and delayed and delayed.