By Michelle Ma and John Gittelsohn, Bloomberg
Of the thousands of residents needing to rebuild after this year’s California wildfires, Andy Weyman would seem especially well positioned. The TV and stage director had remodeled his Malibu home just five years earlier and had city-approved blueprints in hand, with the same architect set to oversee reconstruction.
Yet eight months after the Palisades Fire destroyed almost 600 Malibu houses, the city has issued only two rebuilding permits. Weyman needed geological tests to ensure the stability of his bluff-top lot. Construction costs are roughly double his insurance coverage. In August, his architect died.
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“We’re flailing to figure out the solution,” said Weyman, 73. “Every possibility is fraught with downsides and compromises.”
As Southern California nears the heart of wildfire season, rebuilding is merely inching forward in areas hit by the most destructive conflagrations in Los Angeles history. People trying to restore their homes are grappling with slow permit approvals, high costs and low insurance payouts. Prices for burnt-out lots are coming down as some residents give up on returning.
Most of the areas charred by January’s blazes are cleared for construction: The US Army Corps of Engineers has removed 2.6 million tons of debris, more than the volume of the rubble of New York’s World Trade Center. Yet as of Sept. 24, LA County approved just 405 construction permits on 1,972 applications in areas it oversees outside of city limits. That includes the burn zone of the Eaton Fire, which destroyed more than 6,000 homes and devastated the community of Altadena.
The Palisades Fire burned roughly 5,000 houses. The city of LA, home to the hard-hit Pacific Palisades district, approved 620 permits for 1,564 rebuilding applications as of Sept. 24, according to its fire recovery website.
Rebuilding after California fires has long been an arduous process — in Malibu, only about 40% of the 488 homes that burned in the 2018 Woolsey Fire have completed reconstruction. But government agencies vowed to cut red tape after the devastating toll of the January blazes, located in residential areas that were home to tight-knit communities and highly desirable real estate.
Local officials in the burn areas have agreed to grant quick approval of plans if homes are no more than 10% larger than the pre-fire size. Licensed architects and engineers are allowed to self-certify that plans meet building standards. And the city and county agreed to let designers submit blueprints to an initial review using an artificial intelligence system that almost instantly determines whether they comply with building codes.
Some residents say the process is still being dragged out. Rich Wilken, 78, put off retirement as an architect after losing his Pacific Palisades home of 47 years, and agreed to design 10 new houses in the burn area for himself and friends. But he says the effort has been dogged by a changing cast of inspectors at LA’s building department who offer conflicting opinions on his plans, requiring resubmissions that take time and money.
“The building department’s answers change every day,” Wilken said.
President Donald Trump weighed in on the pace of rebuilding last week, saying in a social media post that LA Mayor Karen Bass and Governor Gavin Newsom “failed” residents by allowing the area to burn and holding back building permits, while planning to add low-income housing to the Palisades. Newsom called the post “a straight-up lie.”
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“Unfortunately, part of the misinformation is from 3,000 miles away,” Bass said during a Sept. 17 Zoom call with residents about the permitting process. “We can’t do anything about the bully pulpit of the president of the United States, but it is important because I certainly don’t want Palisadians to lose hope.”
Bass repeatedly speaks about how rebuilding is happening faster than any wildfire in California history, noting that at least 220 houses in the Palisades are already under construction. Plan approval times in the district average 69 days, compared with as much as 24 months outside the fire zone, according to city officials.
In the area of Eaton Fire, the pace of permit approvals is much quicker than before the disaster — an average of 72 days, compared with about eight months previously. That includes not just county review time, but time for applicants’ architects and engineers to make corrections, said Kathryn Barger, the chair of the county board of supervisors whose district includes Altadena.
Still, the real estate market is starting to suffer. Lot sales got off to a quick start just after the fires, but have slowed amid falling prices and cooling demand, according to real estate agents. Prices have sunk to about $60 a square foot for burned lots in the Altadena area from $88 a foot in the first months after the fire, said Ramiro Rivas, a broker.
In parts of Pacific Palisades, lot prices were as much as 45% lower in August than in March, according to Anthony Marguleas, a real estate agent and local homeowner who plans to rebuild. He is worried the slow pace of sales will depress the market further.
“If only a trickle are coming onto the market, it’s going to delay the recovery,” said Marguleas, who has brokered 26 of the nearly 200 Palisades-area lot sales since the wildfire.
Annie Compton is among those who decided to walk away. The 41-year-old film and TV writer had initially planned to return to the Altadena neighborhood she fled with her husband and two children, having long loved the community’s diversity and reputation as a haven for artists. But navigating the bureaucracy, paperwork and insurance grew to be too difficult, and the math just wouldn’t pencil out.
Compton thought she had “fantastic coverage,” but each call with her insurer revealed new restrictions. Payouts weren’t enough to cover sufficient temporary housing, let alone rebuilding. An application for a Small Business Administration loan dragged through more than a dozen loan officers who misplaced her paperwork and ultimately denied her. At one point, one of the loan officers told her the department’s layoffs prevented them from servicing anyone properly.
She and her husband decided to sell their lot and move to Minneapolis. The property sat on the market for months until a limited liability corporation bought it in August.
“It was on the market for so long, and we didn’t have offers, so you just take what you can get,” she said.
She said many of her former neighbors also don’t plan on rebuilding for the same reasons: It’s too expensive and too difficult.
In the meantime, small-scale corporate investors plan to build single-family homes they’ll flip to new owners, according to real estate agents. One of the biggest buyers has been Black Lion Properties LLC, a company controlled by Edwin Castro, an Altadena native who won a $2 billion lottery jackpot in 2022, and his brother, Jesse Castro. They now own 15 lots.
“Many people who were affected by the fires in Altadena cannot or do not want to rebuild and aspire to move on and start over elsewhere,” Black Lion said in a statement. “These purchases will help some of them, while keeping ownership of the property local.”
Others remain determined to return, particularly those with decent insurance payouts or money to cover losses. Mike Rothschild, 47, says he lucked out by having coverage with USAA, which is only available to military families. He has a designer and a contractor and is about to submit plans for a structural engineering check.
“We’ve been hearing all the insurance horror stories,” Rothschild said. He’s also been fortunate to have alternative housing nearby; he and his family have been living with his mother-in-law in Pasadena.
Local architect Stephen Phillips has met dozens of homeowners following the wildfires, but says finances are holding back many from hiring him. A typical 1,500- to 2,000-square-foot home will require at least $1 million, which needs funding through insurance payouts or personal wealth, he said.
Altadena homeowners may have a path to more money for rebuilding: In July, Edison International’s Southern California Edison announced it would set up a compensation program for victims of the Eaton Fire. While the utility hasn’t accepted responsibility, it has been the subject of multiple lawsuits alleging its equipment started the fire.
For owners of destroyed single family residences that want to rebuild, the company would offer $550 to $750 per square foot, according to a draft of the planned program. If owners choose to settle directly with Edison without involving mediation or litigation, they would receive an additional $200,000. They also would get $100,000 for each adult and $50,000 for each child as compensation for pain and suffering.
In Malibu, it took an average 126 days for approval of the first two rebuilding permits, but that compares with a typical six years outside the burn areas in the beachfront town, according to Yolanda Bundy, Malibu’s community development director who’s overseeing the reconstruction. The area — a getaway for celebrities and billionaires as well as surfing and nature enthusiasts — has challenges including burned beachfront lots with septic tanks for homes built on caissons that were driven into eroding sand, as well as lots on geologically fragile slopes.
“The complexities we have are nothing the others are dealing with,” Bundy said. “It’s taking longer but I feel we’re making progress.”
Weyman, the Malibu homeowner, and his wife, actress Terry Davis, recently received positive news: Initial geological and soil tests indicated their lot is safe to build on, and their late architect’s widow has their blueprints to use for reconstruction.
They still have a long road ahead, but plan to rebuild no matter the obstacles. Their lot perched above the Pacific, with a view that stretches to Catalina Island, is too breathtaking to give up. They’ve long planned to bequeath it to their children and grandchildren.
“It was our dream house, we loved it so much,” Weyman said. “We’d come back from a trip to Europe and say, ‘This is our favorite hotel.’”
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