The devastating wildfires in Southern California are on track to become the most costly in U.S. history, with over 12,000 structures either destroyed or damaged. The estimated reconstruction costs soar to a staggering $40 billion. As the fires continue to rage, the full extent of the damage remains uncertain. However, state and local authorities are taking decisive steps to expedite the recovery process. California Governor Gavin Newsom and Los Angeles Mayor Karen Bass have issued executive orders to streamline rebuilding efforts and accelerate debris removal.
The rebuilding challenge is further complicated by regulatory hurdles and outdated fire codes. California's fire regulations, which are more than a decade old, mandate that contractors use fire-resistant materials. To facilitate recovery, the state has suspended the California Environmental Quality Act and the California Coastal Act's permitting and review requirements. Despite these measures, the path to rebuilding is fraught with challenges.
Dr. Damon Raskin, one of thousands of Angelenos affected by the wildfires, lost his home to the flames. Determined to rebuild, Raskin is exploring fire-resistant materials for his new home.
"We want to rebuild our house." – Dr. Damon Raskin
However, he acknowledges the financial strain involved.
"That might help cover the rebuilding, but doesn't cover anywhere near the contents of what was in the house." – Dr. Damon Raskin
He anticipates a lengthy process ahead.
"Our new home won't be built in less than three years." – Dr. Damon Raskin
The California Building Industry Association (CBIA) is actively collaborating with builders, regulatory officials, and insurance providers to support the rebuilding initiative. Dan Dunmoyer, president and CEO of CBIA, emphasizes the complexity of the situation.
"That could have a far greater impact on the cost of rebuilding in California than any [materials] price increases or enhanced marketplace dynamics." – Dan Dunmoyer
Jeffrey Mezger, CEO of KB Home, indicates that the rebuilding will proceed at a gradual pace.
"This will be an extremely complex situation to deal with and it's going to take some time." – Jeffrey Mezger
"So we don't expect that six months from now there will be 8,000 housing starts in LA County as all these homes go right back up. I think it will be in a onesie, twosie kind of a cadence." – Jeffrey Mezger
Large production companies like KB Home, Lennar, and Toll Brothers may not significantly participate in reconstructing individual homes in affected neighborhoods. Instead, smaller-scale rebuilds are anticipated. Homeowners may seek assistance from the California FAIR Plan, an insurer of last resort, to cover their losses.
Tom Grable highlights the dual challenges of building homes and preparing lots for construction.
"Rebuilding the homes themselves actually is the easy part. The much harder part is what it's going to take to bring those lots back to buildable form." – Tom Grable
"And that has to be done in a comprehensive, programmatic approach." – Tom Grable
Grable also notes an uptick in interest for homes in nearby communities.
"It's not like we're trying to take advantage of those people, but we have homes available for them." – Tom Grable
"We've already had calls from brokers for our homes in Santa Clarita and Valencia, commutable distances to LA, and we have plans for more homes to come online in the future." – Tom Grable