Lawmakers Have Issued a Flurry of Orders in Response to the L.A. Wildfires. Here’s What They Mean.

Debris of houses at Malibu Beach on January 12, 2025. Tayfun Coskun/Anadolu via Getty Images

It’s been more than 10 days since Los Angeles began battling the worst wildfire disaster in its history, in which multiple blazes have collectively destroyed over 40,000 acres and 12,000 structures, obliterating communities and claiming at least 24 lives.

Many residents have lost their homes, while many more are still evacuated and might not be able to return to what’s left of their properties and communities in the near future.

In response, city and state officials have issued various orders to address the most immediate concerns, including cleanup, rebuilding, price gouging and insurance. California Gov. Gavin Newsom has also proposed a $2.5 billion “Marshall Plan” that will fund the recovery as well as prepare for future wildfires, and will seek approval from the state legislature.

Rebuilding

Through an executive order, Newsom suspended two environmental laws that govern how housing is built in California, the California Environmental Quality Act (CEQA) and the California Coastal Act (CCA), both of which contribute to the regulatory complexity of building in the state.

The rules apply to homes and businesses destroyed by the fires and which are looking to rebuild at up to 110% of their original size.

Los Angeles Mayor Karen Bass issued her own executive order Monday to expedite rebuilding. The city will put together a task force to establish a one-stop shop for creating permits, and will require city departments to issue them within 30 days of receiving an eligible application. Additionally, the city is waiving certain zoning hearings, and is looking to quickly approve 1,400 rental units already in the pipeline that are waiting for certifications of occupancy.

The mayor’s order also suspends a requirement that replacement homes should be all electric, while the governor has said he’s looking into suspending a state mandate that new homes utilize solar panels.

While the priority is rebuilding quickly, experts are concerned that many of the waived ordinances were designed specifically to address or mitigate environmental concerns, including wildfires. The CEQA, for example, which requires that the environmental impact of new projects be reviewed, has been cited lately in the courts to challenge projects in fire-prone areas, in regard to wildfire risk and impact on evacuation routes, according to the National Law Review. The executive order takes away an important check on new development.

Insurance Moratorium 

California’s Insurance Commissioner Ricardo Lara issued a one-year moratorium on cancellations and nonrenewals of insurance policies of homes within ZIP Codes affected by the Palisades and Eaton fires. The moratorium went into effect Jan. 7, and was expanded this week to include additional ZIP Codes surrounding the damaged areas.

“This law gives millions of Californians breathing room and hits the pause button on insurance non-renewals while people recover,” Lara said in a statement at the time.

It’s also to ensure that the insurance market doesn’t completely collapse, just as thousands of displaced residents are looking for new housing.

Real estate agent Rochelle Maize with Nourmand & Associates said neighborhoods like Santa Monica and Brentwood, which are closest to the devastated Palisades, are being overwhelmed by demand, but insurance is a sticking point. One client who was in escrow before the fires and was supposed to close this week, had to delay the closing because the insurance company pulled out.

“These companies can’t not insure houses,” Maize said. “That’ll kill the market.”

The insurance market in California was already facing serious challenges before these fires, which will cost an estimated $35 billion to $45 billion in insured damages, according to CoreLogic. Meanwhile, the state-backed option, the California Fair Plan, is severely underfunded relative to the scale of the damage.

Price Gouging

Newsom declared a state of emergency on Jan. 7, triggering a pre-existing price-gouging law in California that limits increases on lodging and construction to 10% above the baseline price the day that the state of emergency went into effect. Generally, these protections remain in place for 30 to 180 days, depending on the type of good or service, but Newsom’s orders extend the protections for a full year.

That includes price increases on rental housing, vacation rentals, hotels and motels, storage facilities and animal boarding. The law also includes construction materials and services, medical supplies and other necessities.

While the law carries a fine and possible jail sentence, there are hundreds of cases of landlords hiking rents beyond the 10% allowed. Additionally, desperate families and displaced residents are bidding up the prices of any available housing, further driving up the cost in what is already one of the country’s most expensive markets.

Maize listed a high-rise rental unit in Santa Monica this week right on the water. “Within a half hour, I had 50 phone calls,” she said. “I’ve never seen anything like it. Within a half hour, it was leased.”

While the client chose an applicant who offered the asking amount, plenty of people were ready to pay more. “They were begging,” she said. “I wish I had 100 more of these units to lease to them.”

Via Mansion Global