Remember Gavin Newsom’s first visit to the sites of devastating fires last January in Los Angeles, when he vowed to streamline California’s paralytic regulations so people could quickly rebuild their homes?
In that interview, while undulating his shoulders in a weird shimmy that will undoubtedly come back to haunt him as he ramps up his presidential campaigning, Newsom also promised to “prevent opportunistic investors from exploiting vulnerable residents by offering below-market prices.”
It’s hard to say which promise has been more thoroughly violated. As celebrity author Adam Carolla posted on 7/14, there is virtually no work going on along the Pacific Coast Highway in Malibu, where hundreds of homes burned down to the sand. This is typical.
The Palisades Fire, with a burn area that included Malibu, destroyed over 6,000 homes. So far, 161 permits have been issued by the City of Los Angeles. The community of Altadena, which was consumed by the Eaton Fire, lost over 9,000 homes. So far, 84 rebuilding permits have been issued.
Instead of streamlining the process to get permits to rebuild, if anything, the city has made it harder. In a July 14 interview with the local ABC affiliate, one dispossessed homeowner claimed the city is adding new requirements and deadlines, saying, “They’re now requiring you to submit an itemized list with pricing, which is nearly impossible in a home that’s been owned for over 40, 50 years.”
But whether it’s California Governor Gavin Newsom or Los Angeles Mayor Karen Bass, the playbook is not designed to help people rebuild their homes and move back into the neighborhoods where their families have lived for generations. New regulations did not replace old regulations. They added as much as they removed, with the new ones being unfamiliar even to veteran builders. All of them, of course, came delivered with the rhetoric of streamlining, while in fact only adding complexity.
Newsom, a tool of corporatist special interests, and Bass, a socialist darling of public sector union bosses, were never playing a game intended to help anyone living in a “single-family detached home.” The new regulations, sold as a way to expedite permitting, were in fact a way to make rebuilding impossible for all but the wealthiest homeowners. And Newsom’s executive order that would “prevent opportunistic investors from exploiting vulnerable residents by offering below-market prices” was actually a move calculated to limit the options of homeowners while the special interests—including the government itself—lined up to purchase these properties.
This isn’t speculation. In late June, Los Angeles County’s “Blue Ribbon Commission on Climate Action and Fire-Safe Recovery” issued its “draft action plan” for “The Resilient and Sustainable Rebuilding of Los Angeles County.” This document is a textbook example of what corporate socialist elites have in store for those normal citizens who, to date, still maintain a modicum of financial independence.
In this document, the first thing the commission does is propose a new bureaucracy, the “Resilient Rebuilding Authority,” empowered to levy taxes and fees to purchase properties and consolidate the reconstruction costs, then giving the exiled homeowners the right of first refusal to purchase the homes they build. They want to “work with selected builders” to source and build “homes with resilient standards.” They want the authority to “manage logistics for rebuilding,” including transportation for workers, materials sourcing and delivery, and “sequencing” of the rebuilding process. They want to “promote modular and manufactured building solutions” with an “emphasis on regional manufacturing” (translation: unionized local companies that will have to go through the new bureaucracy).
On page 12 of this “action plan,” they come close to openly acknowledging they want to control who burned-out homeowners can sell their land to, recommending the Rebuilding Authority have the power to “establish easements and/or purchase lots as available when original family owners want to sell to avoid land speculation” through “a more coordinated, centralized approach.”
Their requirements for rebuilding include “landscape plan review for defensible space.” They intend to require anyone moving back to get approval for which types of trees and shrubs they plant, and where they plant them. And instead of just offering guidelines for owners to follow to reduce fire risk, they are going to force property owners to get permission in advance for what they plant around their homes. They want to “support a healthy tree canopy,” which will be hard to define if not in conflict with optimizing defensible space since all trees burn, and the more canopy, the more flammable trees. The intent isn’t unreasonable: for example, we should avoid planting palm trees because they can become torches that throw off huge embers. But this goes much further.
Meanwhile, nowhere in this document is there any recognition that the Santa Monica Mountains Conservancy made a mess of the whole parkland that borders the burned neighborhoods. They threw out the livestock that foraged, and they never stood up to the regional office of the California Air Resources Board to lift unreasonable restrictions on prescribed burns or the environmentalist litigators who attacked property owners who wanted to do mechanical thinning on hillsides. There is not one word in this action plan recommending how surrounding open land will be better managed to reduce fire danger in the future.
Their energy prescriptions exclude any restoration of natural gas hookups. They intend to require all homes to adhere to the latest “electric-ready building standards,” which means installing solar and fitting the home to accommodate home battery storage and an at-home EV charging station. Homes must use heat pumps and all-electric appliances. They reject any waivers of California’s most recent standards for electrification to make rebuilding more affordable for people who want to rebuild and return to their homes. Failure to waive these new electrification requirements will also stress what remains of California’s home insurance industry, which is already deep in the red and will require federal bailouts to cover thousands of outstanding claims.
The rebuilt neighborhoods need to be more fire-resilient. But this plan goes way beyond resilience. It imposes a costly vision of an all-electric utopia on people who for the most part, are in no position to pay for all the extra costs that utopia requires. Then, as these extra requirements deprive a larger percentage of the displaced of the ability to muster their own resources to rebuild, they propose a central bureaucracy to own and control the process.
It’s also unlikely, as mountains of precedent suggest, that this bureaucracy will displace other agencies or in any way operate efficiently and effectively to speed up the rebuilding process. But they will collect taxes and fees to support their own overhead as they award contracts to favored local companies. It is likely they will use this opportunity to further unionize the construction industry and other private contractors that supply materials.
And where the socialists in Los Angeles lead, the corporatists in Sacramento follow. Crony capitalism and populist socialism enjoy a symbiosis that is only beginning to be understood, but it perfectly explains why a state like California can have so many wealthy people while its government is so bloated and dysfunctional. As reported in The Center Square on 7/15, “The California Senate passed a bill to allow Los Angeles County and other municipalities to use property taxes to fund “Resilient Rebuilding Authorities” that would have to use at least 40% of their funding for building low-income housing.” For now, the bill appears to have stalled in the State Assembly, but give it time. For the state legislature to do anything but expropriate relief funds to take control would break the mold.
Dan Dunmoyer, CEO of the California Building Industry Association, when asked for his opinion of the plan, said, “The energy efficiency mandates add costs of $60,000 to $80,000 per home. For some, a few, this would be great. For all others, it will be a land grab and a climate mandate they cannot afford.”
The formidable Jennifer Hernandez, a San Francisco attorney who has spent decades advocating for private property rights, was even more blunt, saying, “This is an indictment of Los Angeles and the existing process. It is also an indictment of elected officials.”
This “action plan” released by a “blue ribbon commission” in Los Angeles epitomizes the corporate socialist vision. Public/private partnerships grab rebuilding funds, purchase homes from people who can’t possibly hope to navigate ridiculous “streamlined” regulations, and consolidate properties into high-density, low-income housing. To be even more specific: heavily subsidized corporations and hedge funds will purchase properties in Altadena and Pacific Palisades to redesign, rebuild, and then own apartment houses where before there were privately held single-family homes. Then they will collect taxpayer-guaranteed and taxpayer-subsidized rents in perpetuity. The properties will be owned and managed by hedge funds and their proxies, while the tenants will be supervised by NGOs and government bureaucrats. This is the dawning face of corporate socialism. It hides behind environmentalism to create shortages and increase prices, allowing financial special interests to partner with government bureaucrats to roll up a manipulated market.
Newsom and Bass are right about one thing. California is indeed a trendsetter. But it is a trend the rest of America needs to recognize sooner rather than later. Because the people who will move into these new properties will not be the financially independent homeowners who were displaced by fire and dispossessed by bureaucracy. Life as livestock will be their fate, and you’re next.