Insurance Remains Top Wildfire Rebuild Roadblock

Aggravation over wildfire rebuilding roadblocks continues to focus on permitting and insurance, as many cite the latter as the top barrier.

Another home completion in the Pacific Palisades’ Alphabet Streets adds to the 24 residential units in total built in unincorporated parts of Los Angeles County as of Tuesday. The blame for the number of rebuilds post-Palisades and Eaton fires has largely focused on government permitting red tape. Many on the ground say not so fast.

Jeffrey Sandorf, Palisades resident and vice president of Southern California division sales at homebuilder Thomas James Homes, said there isn’t a single, straightforward answer for why more residents aren’t back home.

“It’s a non-linear process,” Sandorf said. “There’s very little predictability of the priorities and roadblocks from family to family.”

Thomas James Homes last November completed 915 Kagawa Street in the Palisades’ Alphabet Streets neighborhood. The city of Los Angeles touted the project as the first completed rebuild, although the developer had planned to tear the original home down and build anew before the blazes broke out. A second home the company owns at 1050 Iliff Street was originally completed before the fires, but subsequently burned. The homebuilder has since rebuilt it and held a grand opening this past weekend to celebrate the space as a community gathering spot.

Locals aren’t counting the developer’s completions as true rebuilds, given an owner isn’t moving in to either. The properties on Kagawa and Iliff streets comprise the handful of post-fires finished homes that have raised questions as to how long rebuilding will take.

As of Tuesday, the Los Angeles Department of Building and Safety reported 2,219 permits issued for 984 different addresses. Individual properties can sometimes require the issuance of multiple permits. It’s a drop in the bucket for the more than 7,800 residential and commercial structures damaged or destroyed in last January’s Palisades fire, according to figures from the California Department of Forestry and Fire Protection, or CalFire. That doesn’t include the wreckage from the Eaton fire, which damaged or destroyed well over 10,000 residential and commercial structures.

Palisades residents Kambiz Kamdar and Frank Renfro began tracking LADBS data not long after the fires began through their site Pali Builds. Next month, they’ll begin tracking rebuild completions, which has been a murkier number to pin down.

Unlike some permit activity dashboards, Pali Builds scrubs the LADBS numbers to include only Palisades rebuilds on single-family homes to offer a closer view to the residential recovery than other trackers, according to Kambiz.

Filtered data from Pali Builds, which last reported February numbers, tallied 84 applications submitted and 93 permits issued for single-family homes.

Kamdar, who runs Pali Construction and offers advice to homeowners weekly through the Palisades Recovery Coalition, doesn’t see the trickle of completions as a city issue.

“I’ve been developing and building for 25 years so I know the process, from finding a property to entitling it and building it. I knew the inefficiencies the city has,” he said. “They were slow to start, but the city has made up a lot of ground.”

Pali Builds found permits are taking an average of 90 to 100 days. Kamdar has seen some issued in as fast as 28 days. Others, he said, take significantly longer. He recalled one homeowner who submitted an application in January and received corrections from the city two weeks later but it wasn’t until a week ago the architect resubmitted plans back to the city.

“I said, ‘Listen, the city’s done their part. Your architect took a month to resubmit,’” Kamdar said. “I was very skeptical of the city initially. Now, I’m putting the onus on residents and architects.”

To understand what some perceive as delays means tracing the money for construction financing, he said.

“The number one issue is insurance,” he said. “They are not paying out, and so homeowners are stuck waiting until they get the payouts to even be able to hire an architect.”

At the rate Pali Builds is tracking permits pulled, Kamdar projected around 40 to 50 percent of the homes lost will have a permit by the end of the year before the market sees a slight slowdown. He estimated the peak is likely to come mid-year when most people will know what they’ll receive from their insurance carriers and can make a decision on whether to rebuild or leave.

While Sandorf echoed the insurance concerns, he pointed out there’s another group afflicted with the “fear of being first” to move back into a community that lacks the commercial infrastructure to support daily needs, from schools to grocery stores.

Developer Rick Caruso’s Palisades Village is expected to reopen this summer in what Sandorf called the “bullseye of the rebuild” that could serve as a catalyst for coming back.

The Palisades’ real estate market has shifted, Nourmand & Associates’ Rochelle Atlas Maize told The Real Deal earlier this month.

“Since the end of December, the market’s changed dramatically,” she said, noting increased lot activity. “There’s so much more interest coming back.”

It took her bidding on four lots before she was able to secure one for a client in the past five weeks, she said. While much of the activity in the Alphabet Streets section of the Palisades was developer driven six months ago, she noted more families coming back as prices creep up to points that no longer pencil out for builders.