Fire Rebuild Los Angeles

The January 2025 Palisades and Eaton fires destroyed over 16,000 structures across Los Angeles County - the most destructive fire event in the city's history. One year later, the rebuild is underway, but the process is complex. This guide covers the regulatory requirements, the construction realities, and the insurance carrier requirements that will shape every decision you make.

This page is designed for homeowners navigating the rebuild process, as well as architects advising clients through it. The information here reflects the current regulatory environment as of early 2026 and will be updated as conditions change.

Last updated: February 2026

A History of Fire in Los Angeles

The Palisades and Eaton fires are the latest-and most destructive-in a long history of wildfires shaping the hillside communities of Los Angeles. Understanding this context matters because it reveals a pattern: fire will return, and how we build determines what survives.

These communities exist in fire-prone terrain. What we build now should acknowledge that reality.

The Current State of LA Fire Rebuilds

As of January 2026, the numbers reflect a multi-year recovery still in its early stages. Three jurisdictions are managing rebuilds across different regulatory frameworks.

Pacific Palisades (City of LA Jurisdiction)

Altadena & Eaton Fire Areas (LA County Jurisdiction)

Malibu

Part One: The Regulatory Reality

Understanding the permitting landscape is essential before making any decisions about your rebuild. The rules have changed significantly since the fires, and knowing which pathway your project qualifies for will determine your timeline and costs.

The 110% Threshold: What It Actually Means

Mayor Bass's Executive Order 1 created an expedited pathway for "like-for-like" rebuilds. The key threshold: your new home cannot exceed 110% of the footprint and height of the structure that existed immediately before the fire.

Benefits of qualifying under 110%:

• Initial plan reviews targeted within 30 days (in practice, some completed in 10 days)
• Reduced fees compared to non-eligible rebuilds
• Exemption from certain requirements, including the all-electric mandate
• Access to suspended CEQA and Coastal Act requirements
• Several departmental reviews waived, including Specific Plan review, Zoning Overlay review, and Hillside Ordinance review

The "Like-for-Like" Reality

Your rebuild will incorporate:

• Current seismic standards-likely more stringent than when your original home was built
• Fire hardening requirements-Chapter 7A VHFHSZ standards that may not have existed previously
• Energy code compliance-Title 24 requirements have evolved significantly
• Accessibility requirements-current ADA standards apply to new construction

On hillside PGRAZ sites, the foundation may need to be completely redesigned based on current geotechnical standards-even if you're building the same house above it.

"Like-for-like" as a concept gives homeowners false comfort that this will be simple. It isn't. The permitting pathway is streamlined; the construction reality is not.

Beyond 110%: Executive Order 8

If your rebuild exceeds 110% of the original footprint or height, you're not disqualified-but you enter a different process. Executive Order 8 extended some streamlined provisions to larger projects, including expanded CEQA and Coastal Act suspensions for single-family home projects.

However, beyond-110% projects will face:

• Standard planning review processes
• Additional clearances and approvals (one contractor reported needing 16 different clearances for a single house)
• Longer timelines (the 30-day target does not apply)
• Full permit and plan-check fees
• Hillside Ordinance review, Coastal review, and Specific Plan review as applicable

For complex hillside sites where the original structure was already constrained by the lot, exceeding 110% may be the only practical path to a functional home. This is a design decision that should be made early, with full understanding of the timeline and cost implications.

Energy Code Requirements: The All-Electric Question

One of the benefits of qualifying under the 110% expedited pathway is exemption from the City of LA's all-electric new construction ordinance. If your project exceeds 110%, that exemption does not apply, and your rebuild must comply with current energy code requirements in full.

What all-electric compliance means in practice:

• Heat pump HVAC: No gas furnace. Heat pump systems perform well in Southern California's climate but require different equipment sizing and ductwork design than conventional forced-air systems.
• Heat pump water heater: No gas water heater. Heat pump water heaters require adequate airflow around the unit and produce condensate that must be drained - both of which affect mechanical room layout.
• Induction cooktop: No gas range. This is the change homeowners notice most. Induction requires compatible cookware and a dedicated 240V circuit.
• Solar PV system: Required under Title 24 for new residential construction. System size depends on conditioned floor area, climate zone, and other factors.
• Battery storage: Current Title 24 requirements mandate battery energy storage systems for new single-family homes, sized to the PV system. This requires dedicated wall or floor space, typically in a garage or utility area, with specific ventilation and clearance requirements.

The cost premium for all-electric construction varies by project, but the combination of heat pump systems, solar PV, and battery storage can add $40,000 to $80,000 or more to a custom home build, depending on system sizing and site conditions. For some homeowners, this cost - layered on top of the longer timelines and additional clearances that come with exceeding 110% - is a factor in the decision about whether to stay within the expedited pathway.

Property Tax Implications: Prop 13 and Your Rebuild

The 110% permitting threshold and the property tax threshold are two separate rules that affect the same design decisions. Understanding both before committing to a scope is essential.

Under Proposition 13, your property's assessed value (its "base year value") is protected at the time of purchase, increasing no more than 2% per year. When a home is destroyed by a Governor-proclaimed disaster, that base year value can be preserved through reconstruction - but only if the rebuild meets specific criteria.

The 120% property tax threshold:

• Below 120%: If the full cash value of your rebuilt home does not exceed 120% of the full cash value of the destroyed home, your existing Prop 13 base year value is maintained entirely.
• Above 120%: The amount exceeding 120% of the destroyed home's value is added to your existing base year value. You are not reassessed on the entire home - only the excess.
• Comparable property: The rebuilt home must be "similar in size, utility, and function" to the original. Additional square footage, bathrooms, or ADUs will be assessed at current market value and added to the base.

AB 245: Extended Rebuild Window

Assembly Bill 245 extended the rebuild window from five years to eight years for properties damaged or destroyed by the Palisades, Eaton, Hurst, Lidia, Sunset, and Woodley fires. This gives homeowners until early 2033 to complete reconstruction and retain their Prop 13 base year value. The Mountain Fire and Franklin Fire (November-December 2024) are also covered under this extension.

Immediate steps:

• File a Misfortune or Calamity claim with the LA County Assessor's Office. This reduces your current property tax assessment to reflect the damaged or destroyed condition and preserves your right to reinstate your base year value after rebuilding. Filing deadline: within 12 months of the fire.
• Property tax deferral: Affected homeowners can defer payment of the next installment of property taxes following the disaster without penalty or interest.
• Base year value transfer: If you decide not to rebuild on the same site, you may be able to transfer your Prop 13 base year value to a replacement property in the same county (within 5 years) or in participating counties statewide. However, you cannot transfer the base value and also receive the reconstruction exclusion on the original property - it's one or the other.

Coastal Zone Complications

Approximately 40% of the Palisades Fire burn area falls within the California Coastal Zone. Much of Malibu is entirely within the Coastal Zone.

Pathway	Eligibility	What It Means
Coastal Exemption (CEX)	Projects within 110%	Suspended Coastal Act requirements under Governor's executive orders
Categorical Exclusion (CATEX)	Some projects exceeding 110%	Middle ground; check the CATEX Map from LA City Planning
Full Coastal Review	Projects exceeding 110% without CATEX	Coastal Development Permit, LCP compliance, potential Commission review

Very High Fire Hazard Severity Zones (VHFHSZ)

Most properties in Pacific Palisades, Malibu, and hillside areas fall within designated Very High Fire Hazard Severity Zones. This triggers California Building Code Chapter 7A requirements:

• Class A rated roof products-no wood shingle or shake
• Exterior wall construction meeting ignition-resistant standards
• Ember-resistant venting at all openings
• Fire-rated eave and soffit construction
• Tempered or multi-pane glass in windows
• Deck construction meeting ignition-resistant standards

Zone Zero requirements (AB 3074): An ember-resistant zone within the first 5 feet of any structure-hardscape or approved ground cover, no combustible items, specific plant restrictions.

PGRAZ: The Hillside Overlay

Many properties in Pacific Palisades and Malibu fall within Palisades Geohazard Risk Assessment Zones (PGRAZ). If your property is in a PGRAZ area, you face additional requirements regardless of which permitting pathway you pursue:

• Comprehensive geotechnical investigation
• Foundation design addressing slope stability, liquefaction, and seismic hazards
• Potential retaining wall and drainage system requirements
• Grading permits with geological oversight

Fire damage does not waive PGRAZ requirements. In fact, fire fundamentally changes hillside conditions in ways that require specialized geotechnical analysis.

Special Grading Zones and Hillside Areas

Properties in designated hillside grading areas face additional requirements:

• Engineered grading requirements: Under LAMC Section 91.7004, grading in designated hillside areas or in excess of 5,000 cubic yards requires a grading plan prepared by a civil engineer - this is classified as "engineered grading." However, practically speaking, virtually all hillside fire rebuilds will require engineered grading regardless of volume, because the grading is proposed to support a structure. Your civil engineer will design the grading plan and provide professional inspection throughout the work.
• Geotechnical monitoring and compaction testing: Your geotechnical engineer needs to be on board before grading begins. They monitor all compaction operations, perform in-place density testing at required intervals, and certify that fill meets the required 90% (or higher) relative compaction. Compaction reports must be submitted to the city before foundation work can proceed. Without a geotech actively engaged during grading, you cannot get sign-off to move forward. (For more on geotechnical timelines, costs, and what a geotech report involves, see our PGRAZ guide.)
• Over-excavation and recompaction: May be required for foundation work - exempt from separate grading permit when performed with a valid building permit
• Haul route constraints: In special grading zones, any significant earth export or import triggers haul route requirements. This means a public hearing, an approved haul route plan with designated truck staging areas, maximum gross weight limits on haul vehicles, and coordination with LADOT. On narrow hillside streets with limited turning radius, haul route logistics can become a major scheduling constraint - particularly when multiple properties on the same street are grading simultaneously.

The Hillside Construction Regulation (HCR) District imposes more restrictive grading limits and hauling operation standards than general code. Your property's specific overlay designations will determine which requirements apply.

Multi-Agency Coordination

Even "expedited" rebuilds require coordination across multiple agencies:

Agency	Role
LADBS	Building permits, plan check, inspections
LA City Planning	Zoning verification, environmental review
Bureau of Engineering	Grading permits, drainage review
Coastal Commission	Coastal zone projects
LADWP	Utility connections, fire hydrant requirements
LAFD / LA County Fire	Fire access, defensible space verification
Geotechnical Consultants	Required reports for hillside sites

Missing a single clearance can halt your project for weeks.

Pre-Approved Plan Programs

Two programs now offer pre-approved architectural and structural plans designed to accelerate the permitting process for fire rebuilds.

The Standard Plan Pilot Program (LA City, Executive Directive 13) provides a library of pre-approved, code-compliant designs for Palisades rebuilds. Plans in the library have already passed plan check, so homeowners who select one skip the standard review cycle entirely. The Foothill Catalog (developed by architects Cynthia Sigler and Alex Athenson) offers a similar set of pre-approved architectural and structural plans for LA County rebuilds in Altadena and the Eaton Fire footprint, with estimated savings of roughly 10% of development costs.

These programs are worth exploring, particularly for homeowners on straightforward lots who want to move fast. But there are limitations to understand before committing:

• Foundation design is site-specific. A pre-approved plan covers the structure above grade. On hillside lots, the foundation - caissons, grade beams, retaining walls - must be designed by a geotechnical and structural engineer based on your specific soil conditions and slope geometry. The foundation is often the most expensive and time-consuming element on a hillside rebuild, and no catalog plan addresses it.
• Site conditions vary. Setbacks, easements, utility locations, and grading requirements differ from lot to lot. A plan that fits one property may require significant modification for the next one.
• Customization resets the clock. Modifying a pre-approved plan beyond minor adjustments may trigger a new plan check review, reducing or eliminating the time savings.

Pre-approved plans solve a real problem for eligible homeowners. For complex hillside sites, they're a starting point for conversation with your design and construction team rather than a turnkey solution.

Third-Party Inspections and Structural Observations

Beyond standard city inspections, hillside fire rebuilds typically require multiple layers of third-party verification:

• Deputy inspection: The city will require a registered deputy inspector for critical structural elements - particularly reinforcing steel (rebar cages) in caissons, grade beams, and retaining walls. The deputy inspector verifies that reinforcement is placed correctly before concrete is poured.
• Structural observations: The structural engineer of record may be required to perform periodic observations during construction, independent of deputy inspection. Some projects require both - structural observations AND deputy inspection - for the same elements.
• Geotechnical compaction monitoring: Your geotechnical engineer must monitor and test compaction progress during all fill operations. They provide density testing at specified intervals and certify that compaction meets the required 90% (or higher) relative compaction. Without passing compaction reports, the city will not approve the next phase of work.

These requirements add cost and scheduling complexity. Your construction manager should identify which inspections are required early and establish relationships with qualified deputy inspectors before work begins - not when the rebar cage is tied and waiting for sign-off.

Part Two: Before Construction Begins

Before any building work starts, your property goes through a series of preparatory phases. Understanding this sequence helps set realistic expectations for timeline and costs.

Phase I and Phase II Debris Removal

The January 2025 fires triggered the largest debris removal mission in U.S. Army Corps of Engineers history.

Phase I (EPA): Environmental Protection Agency crews entered properties to remove hazardous materials - batteries, paint, cleaners, solvents, oils, asbestos, compressed gas cylinders, and medical waste. They also coordinated removal of human remains and firearms. Phase I was completed within 30 days, though it was initially anticipated to take months.

Private Phase I assessments: In some cases, the EPA determined that site conditions were too unsafe for government crews to enter - particularly buildings with basements where collapsed structure created access hazards. In those situations, property owners were allowed to bring in private environmental firms to conduct Phase I assessments independently. If your property had a basement or other conditions that prevented EPA entry, confirming what testing was actually performed (and by whom) is an important early step before construction.

Phase II (Army Corps of Engineers): Beginning February 11, 2025, the Army Corps removed fire-related debris from private properties, including hazardous trees, ash, and structural remains. This phase took 2-10 days per property. The deadline to opt into the government-sponsored program was April 15, 2025. Phase II was completed in September 2025.

What Phase II Removed	What Phase II Left Behind
Structural debris and rubble	Existing foundations (may or may not be salvageable)
Hazardous trees	Underground utilities (often damaged)
Ash and contaminated surface materials	Retaining walls and site improvements
Some foundation elements	Drainage systems (typically damaged)

Soil Contamination and Environmental Testing

Phase II debris removal cleared the visible destruction, but fire leaves contamination in the soil itself. The Army Corps removal addressed structural debris and surface materials. It did not test or remediate subsurface soil contamination - that's the homeowner's responsibility, and it's one of the most common sources of unexpected cost and delay on fire rebuilds.

What fire debris leaves in soil:

• Lead: Homes built before 1978 contained lead-based paint. When that paint burns, lead concentrates in the soil. Lead is also released from melted batteries, plumbing solder, and flashing.
• Arsenic: Present in pressure-treated lumber (common in decks and retaining walls built before 2004) and certain pesticides used in landscaping.
• Hexavalent chromium: Released from burned metal finishes, stainless steel components, and some paints and coatings.
• Asbestos: Older homes may have contained asbestos in insulation, floor tiles, roofing, or siding. Phase I removed identifiable asbestos-containing materials, but fiber fragments can remain in soil.
• Polycyclic aromatic hydrocarbons (PAHs): Produced when plastics, synthetic materials, and petroleum-based products burn. Present in ash and can leach into soil.

What independent testing involves:

A Phase I Environmental Site Assessment (not to be confused with the EPA's Phase I debris removal) evaluates the property's history and identifies potential contamination concerns. If warranted, a Phase II Environmental Site Assessment involves soil sampling at multiple locations and depths, laboratory analysis for specific contaminants, and a report with findings and remediation recommendations. Cost ranges from $3,000 to $8,000 depending on the number of samples, contaminants tested, and site complexity. On properties with known risk factors - pre-1978 construction, pools with equipment that burned, extensive landscaping with treated lumber - testing at the higher end of that range is typical.

Post-Fire Slope Instability and Debris Flow Risk

After vegetation burns off a hillside, slope stability fundamentally changes for 3-5 years.

Why burned hillsides behave differently:

• Hydrophobic soil layers: Intense fire heat creates water-repellent layers that dramatically increase runoff
• Loss of root cohesion: Root systems provided structural reinforcement-that reinforcement is gone
• Macropores from burned roots: As roots decay, they leave channels that concentrate water flow and destabilize slopes
• Altered soil structure: Organic matter that bound soil particles together has been consumed

If you're rebuilding on a hillside in the burn scar, your geotechnical assessment needs to account for fundamentally changed soil conditions. This isn't the same geotech report you'd commission on undamaged land. UCLA researchers are actively studying post-fire slope behavior and still don't have complete models for failure mechanisms.

Erosion Control and Storm Water Protection

SWPPP Requirements: If your project disturbs 1 acre or more, you're required to file a Storm Water Pollution Prevention Plan under California's Construction General Permit. This means:

• Hiring a Qualified SWPPP Developer (QSD) to assess risk and create site-specific controls
• Installing erosion and sediment control measures before and during construction
• Regular inspections and reporting to the state database (SMARTS)
• Water quality testing following storm events

What SWPPP compliance actually looks like in practice: This is not a one-time filing. The QSD is required to notify you before every forecasted rain event. After each rain, they measure actual precipitation, conduct a site inspection, and write an independent assessment of whether your erosion controls performed adequately. If controls failed or were insufficient, corrective action is required before the next event. This cycle repeats for every rain throughout your construction period. Plan for ongoing monthly QSD fees plus inspection fees per rain event. On hillside sites in burn-scarred areas, expect more frequent inspections and stricter corrective action requirements.

Erosion control measures for burned areas: Hydroseeding with native plants, erosion blankets, fiber rolls, sediment barriers, silt fencing, straw wattles, drainage improvements, and temporary slope stabilization before winter rains.

Planning for erosion control should begin immediately upon taking control of your site.

Topographic Surveys and Site Documentation

Before design can begin in earnest, you need an accurate topographic survey of your property. After the fire, existing surveys are largely useless - the landscape has changed, reference points have been destroyed, and the ground surface itself may have shifted on hillside lots.

Modern surveying technology: LiDAR and point cloud scanning have significantly changed how surveys are performed. Surveyors can now walk a property with shoulder-mounted scanning equipment and produce highly detailed 3D terrain models in a fraction of the time traditional methods required. This technology is particularly valuable on steep or irregular hillside sites where conventional survey methods are slow and expensive.

Coordinate with your neighbors: If multiple properties on your block need surveys (and they likely do), grouping survey work with adjacent owners can reduce per-property costs. A single surveyor mobilization covering multiple lots is significantly more cost-effective than individual engagements. Talk to your neighbors early about coordinating this work.

Foundation Evaluation: The Critical Early Decision

The most consequential early decision on any fire rebuild is whether the existing foundation can be reused.

Why you cannot assume the foundation is usable:

Fire subjects concrete and steel to extreme temperatures. The effects aren't always visible:

• Concrete spalling and delamination: High heat causes moisture inside concrete to expand, creating internal fractures not visible on surface
• Steel reinforcement damage: Rebar loses strength when exposed to sustained high temperatures-permanent and invisible
• Foundation-to-soil interface: Fire may have altered soil conditions around and beneath the foundation
• Retaining wall integrity: Fire-damaged walls may have compromised structural connections or lost passive soil retention from vegetation

What proper evaluation requires:

• Visual inspection by a licensed structural engineer
• Non-destructive testing (NDT) including concrete core sampling and rebar scanning
• Geotechnical evaluation of soil conditions (required for PGRAZ sites regardless)
• Assessment of existing drainage and waterproofing systems

Geotechnical Requirements for Hillside Rebuilds

For hillside properties-especially those in PGRAZ areas-geotechnical engineering isn't optional.

What the geotechnical report will determine:

• Foundation system requirements (spread footings, grade beams, caissons, etc.)
• Retaining wall specifications
• Grading and drainage requirements
• Slope stability recommendations
• Setback requirements from slopes

Cost implications: Hillside foundation systems are significantly more expensive than flat-lot construction. Caisson foundations-drilled concrete piers extending to stable bedrock-can add substantial costs depending on the number, depth, and diameter required by site conditions. This isn't optional if the geotechnical report requires it.

Infrastructure and Utility Coordination

Roads, water mains, sewer lines, gas, electrical-all potentially damaged or requiring upgrades. These aren't in your direct control, but they can halt everything.

LADWP reconnection: Utility reconnection isn't automatic. You may face new service requirements, upgraded meter installations, and fees for infrastructure improvements.

Sewer capacity: Studies may be required for larger homes or significant increases in fixture counts.

Underground utility relocation: Damaged utilities may need to be replaced as part of site work-often discovered during excavation.

Shared Retaining Walls and Neighbor Coordination

Adjacent hillside properties often share retaining walls, drainage systems, and lot line walls. When both houses burned, the coordination challenges multiply.

The questions nobody warns you about:

• Who's responsible for the shared retaining wall if both properties are rebuilding?
• What if your neighbor isn't rebuilding on the same timeline-or at all?
• What if an investor bought their lot and is sitting on it indefinitely?
• What if their rebuild design conflicts with your drainage requirements?
• Who pays for engineering on a shared system?

These create legal, engineering, and construction coordination problems. Retaining walls serving both properties need to be designed for both properties' loads and drainage. If your neighbor isn't rebuilding, you may need to design systems to function independently-more expensive than shared solutions. You may also need easements or agreements for construction access.

Legal considerations: Existing easements, CC&Rs, and property line agreements may need to be reviewed or renegotiated. Shared wall disputes sometimes require mediation before construction can proceed.

Part Three: The Construction Reality

Permitting is paperwork. Construction is what happens when you build on a fire-damaged hillside site with compromised soil conditions, destroyed utilities, and insurance coverage that may not match your actual costs.

Construction Timeline Reality

Realistic overall timeline for a custom hillside home: 18–30 months from permit to occupancy, depending on site complexity.

The specific duration varies significantly based on:

• Whether there's an existing foundation or shoring walls to evaluate or remove
• Whether large removal and recompaction work is required
• Whether contaminated soils need additional remediation
• Site access conditions (narrow streets, steep driveways)
• Weather during grading and foundation work
• Material lead times for custom elements
• Subcontractor availability in a market with thousands of concurrent rebuilds

Flat-lot rebuilds with minimal site work will be faster. Complex hillside sites with caisson foundations, extensive retaining walls, and difficult access will take longer.

The Additional Living Expense (ALE) Clock

While you're rebuilding, you need somewhere to live. Temporary housing near the Palisades runs $15,000+ per month. ALE policies have caps and time limits-typically 24 months, sometimes 36 with extensions.

With realistic construction timelines of 18–30 months for complex hillside rebuilds, many homeowners will exhaust ALE before they're done building.

What this creates:

• Pressure to rush decisions, which leads to worse outcomes
• Financial stress layered on top of reconstruction stress
• Incentive to underscope projects to hit faster timelines
• Potential need for out-of-pocket housing costs near the end

What helps:

• Realistic timeline projections from the start, so you can plan financially
• Understanding your specific ALE limits and extension provisions
• Budgeting for the possibility of out-of-pocket housing costs near the end
• Making decisions that don't require redesign mid-project

Accurate timelines let you plan. The ranges above reflect what these projects actually take.

The ADU-First Strategy

One approach that architects and construction managers are increasingly recommending: build a detached ADU first, occupy it while the main house is under construction, and eliminate the ALE clock entirely.

The math works because of how the expedited permitting rules are structured. Detached ADUs are completely exempt from the 110% footprint and height limits - they don't count toward the threshold at all. They qualify for the expedited permitting pathway on their own, with plan review timelines measured in weeks rather than months. A well-designed 800-1,200 SF ADU can be permitted, built, and occupied in a fraction of the time it takes to complete a main house - particularly a complex hillside home with caissons, retaining walls, and extended consultant coordination.

Why this works financially:

• Stops the ALE clock: Once you're living in the ADU on your own property, you're no longer drawing down temporary housing benefits at $15,000+ per month. On a 24-month main house build, that's potentially $360,000 in ALE that doesn't get consumed.
• Creates long-term value: After the main house is complete, the ADU becomes a rental unit, guest house, home office, or caretaker quarters. It's not a temporary expense - it's a permanent addition to the property.
• Avoids the ALE crunch: Homeowners who exhaust ALE before their main house is finished face the worst possible combination - paying out-of-pocket for housing while also funding construction. The ADU-first approach eliminates that risk.

What to plan for: The ADU needs its own foundation design, utility connections, and site work. On hillside lots, placement of the ADU relative to the main house matters - you don't want to put it where it blocks crane access, material staging, or excavation routes for the primary construction. Coordinating the ADU location with the overall site plan and main house construction sequence is a pre-construction exercise. Your construction manager should be evaluating ADU placement as part of the site logistics plan, not treating it as an afterthought.

Both the City of LA and LA County have also authorized temporary structures on fire-damaged properties during active reconstruction, subject to permitting requirements that vary by jurisdiction.

Labor and Material Market Pressure

Thousands of concurrent rebuilds are competing for the same subcontractors and the same materials.

Current market realities:

• Extended lead times: Windows, structural steel, custom cabinetry, and specialty items face extended lead times compared to normal conditions
• Subcontractor availability: Qualified hillside contractors are in high demand; scheduling trades requires longer lead times
• Market volatility: Material pricing is fluctuating due to tariff uncertainty, supply chain disruptions, and the sheer volume of concurrent projects - costs that were stable six months ago may not hold today
• Labor market constraints: The construction labor pool was already tight before the fires; immigration enforcement actions have further reduced available workers, particularly in the trades that support residential construction

What this means for your project:

• Insurance estimates based on pre-fire pricing may not reflect actual costs
• Material selections made early in design may not be available when you need them
• Subcontractor commitments need to be secured earlier than in normal construction
• Schedule contingency should assume some delays, not zero

Neighborhood Construction Sequencing

On narrow hillside streets, your neighbors' construction schedules directly affect yours.

Logistical realities when multiple houses rebuild simultaneously:

• Crane access: Mobile cranes may need to swing over property lines; coordinating crane schedules with adjacent sites requires formal agreements
• Material staging: Limited street width means materials can't always be staged in front of your lot
• Concrete pours: Multiple concrete trucks on a narrow street require scheduling to avoid gridlock
• Equipment delivery: Large equipment may need street closures or early-morning delivery
• Street parking: Construction crews need to park somewhere-multiply by five houses on the same block

If your neighbor's concrete pour is scheduled for Tuesday and yours is Wednesday, and there's only room for one pump truck, someone needs to coordinate. If nobody does, one project gets delayed.

Budget Reality vs. Insurance Payout

The gap between what insurance pays and what rebuilding actually costs is significant for most fire-affected homeowners, and the data shows why.

Why insurance estimates fall short:

Insurance companies use Xactimate software for damage estimates, and its default settings are poorly calibrated for post-fire rebuilds on complex hillside lots:

• Outdated regional pricing: Database values lag behind actual market costs, especially during demand surges
• Omitted hillside stabilization costs: Standard estimates don't account for caissons, retaining walls, or specialized foundation work
• Custom finishes priced as stock materials: If your house had custom millwork, Xactimate may price it as commodity cabinets
• No allowance for post-fire soil conditions: Additional geotechnical work on fire-damaged hillsides isn't in standard templates
• Missing soft costs: Permit fees, engineering, construction management, and extended timelines aren't fully captured

Cost Ranges for Custom Home Construction (Early 2026)

Construction costs are fluctuating. Material prices, labor availability, and demand conditions in a market with thousands of concurrent rebuilds all affect pricing. These ranges reflect current conditions but may shift.

Project Type	Cost Range (per SF)	What This Level Typically Includes
Flat-lot standard rebuild	$650 – $950	Stock exterior windows and doors, standard interior doors and hardware, builder-grade plumbing fixtures and appliances. Straightforward site conditions, conventional foundation.
Hillside custom home	$1,000 – $1,200+	Engineered foundation systems, custom millwork and finishes, hillside-specific structural requirements. Significant site work, retaining walls, and grading.
PGRAZ hillside rebuild	$1,000 – $1,400+	All hillside complexity plus PGRAZ-specific requirements: enhanced geotechnical investigation, fire-hardened assemblies, extended consultant coordination, and longer permitting timelines. Projects with complex geology, deep caisson foundations, or high-end architectural finishes regularly exceed these ranges.

These ranges reflect construction costs only and do not include land value, design fees, permit fees, or consultant costs. Actual project costs depend on site-specific conditions, scope of finishes, and market timing.

Funding the Gap

The gap between insurance payouts and actual rebuild costs is documented above. For a 3,000 SF hillside home, that gap can exceed $1.8 million. Several tools exist to help close it, and they should be part of your financial plan before you commit to a design scope.

SBA Disaster Loans

The U.S. Small Business Administration offers low-interest disaster loans to homeowners - not just businesses - for repair or replacement of a primary residence.

• Maximum loan amount: $500,000 for primary residence repair or replacement
• Interest rate: As low as 2.563% for homeowners (rate is set by the SBA based on the applicant's financial condition and whether credit is available elsewhere)
• Term: Up to 30 years
• Deferred payments: Interest does not accrue and payments are not due until 12 months from the date of first loan disbursement
• Mitigation add-on: Eligible for an additional increase of up to 20% of verified physical damages for mitigation improvements

SBA loans can be applied for simultaneously with FEMA grants. The application is at sba.gov/disaster.

Federal Casualty Loss Deduction

Because the January 2025 fires received a Presidential disaster declaration, affected homeowners can claim a federal casualty loss deduction for uninsured losses. The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, extended prior legislation that significantly improved this deduction for qualified disasters:

• No 10% AGI threshold: The standard rule requiring losses to exceed 10% of adjusted gross income was eliminated for qualified disasters. The floor is now $500 per casualty event.
• No itemization required: The deduction can be taken in addition to the standard deduction - you do not need to itemize.
• Claim on 2024 or 2025 return: The loss occurred in 2025, but federal law allows you to elect to claim it on your 2024 return instead, which can produce a refund faster.
• Net of insurance: The deduction covers the portion of your loss not compensated by insurance or other reimbursement.

Construction Financing

For homeowners whose insurance proceeds and savings cannot cover the full rebuild, construction loans or bridge financing may be necessary. Options include:

• Construction-to-permanent loans: Finance the build and convert to a traditional mortgage at completion. These typically require 20-25% equity and involve draw schedules tied to construction milestones.
• Bridge loans: Short-term financing to cover the gap between insurance disbursements and contractor payments. Higher rates, but faster access to capital.
• Home equity lines (if applicable): If you own other property with equity, a HELOC on that property can provide flexible access to rebuild funds.

If your property has an existing mortgage, coordinate with your lender early. Insurance proceeds may be held in escrow by the lender, and their disbursement schedule may not align with your construction draw schedule.

Disputed Claims and Underpayment

If you believe your insurance carrier has undervalued your claim, you have options beyond accepting the initial offer:

• Public adjusters: Licensed professionals who represent the policyholder (not the carrier) in negotiating claims. Typically work on a percentage of the recovered amount.
• Appraisal clause: Most homeowner policies include an appraisal provision. Either party can invoke it when there's a dispute over the amount of loss. Each side selects an appraiser, and the two appraisers select an umpire. Agreement between any two of the three sets the loss amount.
• Department of Insurance complaints: The California Department of Insurance handles formal complaints against carriers for claims handling practices.

None of these tools eliminate the gap entirely, and each one involves cost, complexity, or both. The point is to understand the full landscape of options before committing to a construction scope. A realistic project budget accounts for all funding sources - not just the insurance check.

Mortgage and Lender Involvement

If there's a mortgage on your property, your lender is a party to your rebuild-whether you expected them to be or not.

How lender involvement works:

• Insurance proceeds may be held in escrow: The lender controls how funds are released, typically in stages tied to construction progress
• Construction draws require inspections: Before each disbursement, the lender may require third-party inspection to verify work completion
• Disbursement timing affects cash flow: If you're funding contractor payments and waiting for reimbursement, you need working capital
• Mortgage forbearance has limits: If you're in forbearance during reconstruction, obligations resume whether or not you're done building

Plan accordingly: Understand your lender's requirements before construction begins. Factor draw schedules into cash flow planning. If there are conflicts between your construction sequence and their disbursement requirements, surface them early.

Selecting a Contractor: What to Verify

The fire zones have attracted unfamiliar firms from outside the region, some reputable and some not. The Contractors State License Board (CSLB) has issued repeated warnings about contractor fraud in fire-affected areas. Vetting any contractor you haven't worked with before is essential.

Verification	What to Check
CSLB License	Verify at cslb.ca.gov-current, in good standing, B license for general building
Workers' Comp	Current certificate; verify directly with insurer, not just contractor's copy
General Liability	Adequate limits for your project; request certificate naming you as additional insured
References	Specifically hillside construction, fire rebuilds, or similar complexity
Bond Status	License bond provides limited protection; larger projects may warrant performance bonds

Part Four: The Insurance Reality

Insurance carriers have learned from wildfire losses. The homes they're willing to insure-and the premiums they'll charge-now depend on specific risk mitigation measures. But there's a more fundamental problem: getting insured at all.

The Insurance Availability Crisis

California is facing an insurance crisis that affects every fire rebuild. Since 2022, seven of California's top twelve insurers have limited new policies or withdrawn renewals. From 2019 to 2024, more than 100,000 homeowners lost coverage due to carrier exits and non-renewals.

What this means for fire rebuilds:

• Fewer carriers willing to write policies in VHFHSZ areas
• Higher premiums when coverage is available
• More reliance on the FAIR Plan (California's insurer of last resort)
• More stringent risk mitigation requirements to obtain coverage

Legislative Changes (Effective 2026)

• SB 495: Requires insurers to pay up to 60% of contents coverage (capped at $350,000) without detailed inventory for total losses
• Replacement cost policies: Must include building code upgrade coverage equal to at least 10% of dwelling limit
• Collection window: Insureds have at least 36 months to collect full replacement cost benefits
• Rebuild location: Insurers cannot deny benefits because you choose to rebuild at a different location

These changes help, but they don't solve the fundamental availability problem. Designing and building your home to meet carrier risk mitigation requirements isn't just about premiums-it may be the difference between getting coverage and not.

Structural System Selection and Insurance

The structural system you choose for your rebuild - wood frame, steel frame, concrete, or some combination - has direct implications for your insurance availability and premium. This is a decision that should happen during pre-construction, not after plans are complete.

Most residential construction in Los Angeles uses wood-frame systems. Wood frame is well-understood by local subcontractors, performs well seismically when properly engineered, and is cost-effective for most applications. It also burns. Carriers know this, and the material composition of your home is increasingly a factor in underwriting decisions for properties in fire-prone areas.

What carriers are doing:

• Mercury Insurance has stated it offers discounts of up to 50% on the wildfire portion of premiums for homes built with non-combustible structural systems - specifically combinations of steel, concrete, and glass. In high-wildfire-risk areas, the wildfire portion of the premium is substantial, making this a meaningful reduction.
• Mercury's broader Sustainable Insurance Strategy filing includes mitigation discounts that could reduce the wildfire portion of premiums by up to a third for qualifying homes, based on defensible space, home hardening, and community-level fire preparation.
• Other carriers are beginning to differentiate on construction type as well, though specific programs vary.

The reality on complex hillside sites:

Alternative structural systems - insulated concrete forms (ICF), cold-formed steel framing, concrete masonry (CMU), or hybrid systems - are viable on some sites and impractical on others. On hillside lots with caisson foundations, complex grade beams, and seismic design requirements, the choice of above-grade structural system interacts with everything below it. A system that works well on a flat slab may create engineering complications or cost premiums on a steep hillside with irregular geometry.

The right approach is not to pick a structural system from a brochure and ask your architect to design around it. It's to evaluate the options during pre-construction - with your architect, structural engineer, and construction manager at the table - against the specific conditions of your site, your insurance requirements, your budget, and your timeline.

If non-combustible construction is important to you - whether for insurance, resilience, or both - raise it with your design team early. Your construction manager can provide comparative cost and schedule analysis for different systems on your specific site, so the decision is made with real numbers rather than assumptions.

Understanding Carrier Requirements

The homes insurers will cover-and the premiums they'll charge-depend on specific risk mitigation measures. These requirements aren't suggestions; they're conditions of coverage. Understanding these requirements before you design and build is essential.

Defensible Space: The Three Zones

Most carriers evaluate defensible space in three zones, measured from your structure outward.

Home Hardening: Carrier Requirements from Roof to Foundation

Roof - The Most Vulnerable Surface

Carriers require Class A rated roof products. Wood shingle or shake is unacceptable in wildfire-prone areas.

Class A alternatives with wood aesthetics: DaVinci synthetic shingles, Brava composite tiles, CeDur synthetic shake. Other options include metal roofing and composition/asphalt shingles.

Gutter Guards

For properties with trees taller than the home, metal or steel gutter guards are often carrier-required. Custom gutters require custom-built guards-factor in lead time for fabrication.

Ember-Resistant Venting (ERV)

Vents are major ember intrusion points. Standard vents allow embers to enter attics, crawlspaces, and interior spaces where they can ignite fires even after the main fire has passed.

Where ERV may be required: Dormer vents, under-eave/soffit/bird block vents, foundation vents, gable end vents, sub-flashing vents for low-profile roof vents.

ERV vendors: BrandGuard Vents, Vulcan Vents, Wildfire Defense Mesh (for mechanical doors, under decks, blocking large spaces).

Wood Deck and Fencing Protection

Wood decks are vulnerable to ember accumulation, especially underneath. Options: mesh screening underneath the deck, or replace decking surface with non-combustible material (framing can often remain).

Wood fencing acts as a wick, carrying fire to your home. Requirement: the last 5 feet nearest the house must be non-combustible-wrought iron, aluminum, or metal.

Perimeter Sprinkler Systems

For high-risk properties or those requiring self-insurance for wildfire coverage, carriers may require perimeter sprinkler systems.

Feature	Carrier Requirement
Autonomous operation	Must function during power outages
Independent power	Generator and/or battery backup
Independent water	Pool water or dedicated tank (municipal may be unavailable)
Fire retardant	Systems that spray fire retardant, not just water
Maintenance	Annual maintenance required as condition of coverage

Recommended systems: WaveGuard, Frontline Wildfire Defense.

Alarm Systems: During and After Construction

During construction (upon enclosure): Carriers require temporary alarm systems once the building envelope is enclosed-heat sensors (one per 1,000 SF, minimum one per level) and wireless motion sensors at main entry points.

Post-construction: Centrally monitored fire and burglar alarm systems required. Wire for hardwired systems during construction.

• Fire detection: Smoke detectors in living areas (one per 1,000 SF, one per bedroom); heat sensors in kitchens, mechanical spaces, attics, garages
• Burglar detection: Door/window contacts, motion sensors, glass break sensors

Water Shut-Off and Back-Up Power

Automatic water shut-off: Flow-based devices that detect unusual water flow and automatically shut off water are now required by many carriers. Install during construction. Systems meeting requirements: Phyn, Flo-Logic, Leak Defense.

Back-up power: Automatic generators that activate on power loss. Must have capacity to power HVAC, alarm system, refrigerator, and essential outlets. Elevated installation required if near any water source.

Course of Construction Requirements

During the construction phase, carriers impose specific requirements:

Requirement	Specification
Fire extinguishers	10-lb extinguishers, 1 per 1,000 SF, minimum 1 per level; mounted in portable boxes
Jobsite cleanliness	Daily sweeping (sawdust is combustion risk); extension cords unplugged at end of day
Temporary fencing & lighting	Required in many areas; automated lighting as theft deterrent
No smoking	Within 50 feet of structure; designated smoking area with proper disposal
Temporary railings	Required on second floors and elevated decks/balconies during construction
End-of-day walkthrough	30–60 minutes after work ceases; critical after hot work (welding, cutting, soldering)

Getting Started: Why Early Involvement Matters

Reading through the regulatory requirements, construction realities, and insurance carrier requirements, one reality becomes clear: the decisions you make before design begins shape everything that follows.

Most homeowners start by hiring an architect. That makes sense-you need someone to design your new home. But by the time architectural plans are complete, critical construction decisions have often been made without construction expertise at the table.

What gets decided during design-whether you realize it or not:

• Foundation system (which drives a significant portion of hillside construction costs)
• Structural systems and materials
• Site work and grading requirements
• Whether the design can actually be built within your budget
• Whether the design incorporates insurance carrier requirements
• Whether the timeline is realistic given site conditions

What early construction involvement provides:

• Site feasibility evaluation before significant design investment
• Foundation assessment and realistic foundation budget
• Insurance requirement review integrated into early design decisions
• Coordination with geotechnical and structural engineers from day one
• Realistic budget development based on actual site conditions-not Xactimate defaults
• Constructibility review as design develops
• Coordination with neighbors on shared walls, access, and utility issues
• Understanding of infrastructure requirements before they become surprises

This is what Construction Management at Risk (CMAR) provides: the construction expertise you'll need during construction, brought to the table during pre-construction when it can actually shape decisions. A general contractor typically enters after design is complete, bids the work, and builds what the architect designed. The construction manager at risk is involved from the beginning, shapes the design for constructibility and budget alignment, and then performs the work.

Community Rebuild Status and Infrastructure

One of the most common questions from homeowners considering a rebuild is: when will the rest of the community come back? Many families have held off on rebuilding because they didn't want to be the only house on a block of empty lots. Understanding where the broader community recovery stands can help you time your own decisions.

Permitting Progress

As of early 2026, more than 2,600 residential rebuild permits have been issued between Pacific Palisades and Altadena - roughly one for every five of the approximately 13,000 homes lost. Another 3,300+ permits are under review. Single-family permits are now being processed nearly three times faster than pre-fire rates, and the city has launched a Standard Plan Pilot Program with pre-approved, code-compliant designs to further accelerate approvals. More than 1,200 rebuilding plans have been approved for over 600 addresses.

Utility Undergrounding

LADWP has committed to undergrounding electrical utilities throughout the Palisades, with the goal of burying 100% of power lines in the neighborhood. Before the fires, approximately 48% of lines were already underground. Key details:

• Timeline: Undergrounding is estimated to begin in Q3 2026, starting with the Alphabet Streets area. Detailed block-by-block scheduling is still being developed.
• What to install now: LADWP strongly recommends installing "combo panels" that support both overhead and underground electrical service. They also request that builders run underground conduit 30 inches below gutter grade to the front property line, terminating 3 feet from the side property line, so crews can connect to the underground system later. This is not required, but failing to do it now could mean expensive retrofitting later.
• Block-level buy-in required: Undergrounding will only happen on blocks where all property owners agree. A single holdout on a block can prevent the entire project from moving forward for that street.
• Telecom coordination: Utility poles are often co-owned by telecom companies. Even after power lines go underground, poles may remain unless telecom providers also bury their lines - which involves separate funding and agreements.
• New voltage system: LADWP is upgrading to a higher voltage system and upgrading substations. This is a new voltage not used elsewhere in LADWP territory, which has added engineering complexity.
• Support resources: LADWP's Palisades Inspections and Permitting Support Center at 16925 Marquez Ave. houses representatives from LADBS, LADWP, Bureau of Engineering, and LAFD. You can also contact PalisadesRebuild@LADWP.com for property-specific guidance.

Water System and Infrastructure

The city has committed to expanding water flow capacity and improving the watershed area. Tap water has been confirmed safe throughout the Palisades since March 2025. LADWP strongly recommends that all rebuilding homeowners replace all plumbing on their side of the water meter as part of reconstruction, due to potential unseen damage to service lines. Current infrastructure work on Via De La Paz (water vault reconstruction) runs through May 2026.

Commercial Recovery and Community Spaces

Palisades Village (Caruso's retail center) is targeted for reopening in mid-2026, which will be a significant milestone for daily life in the community. Several businesses including Vons, Starbucks, and local restaurants have already reopened. The Palisades Recreation Center and library are slated for rebuilding, with temporary facilities operating now and permanent structures targeted for 2028. Schools including Marquez Charter Elementary and Palisades Charter High School are using temporary campuses during reconstruction.

The AECOM Master Plan

The city hired AECOM in June 2025 to develop a comprehensive rebuilding roadmap covering infrastructure reconstruction, fire protection improvements, evacuation route upgrades, materials logistics, and traffic management during construction. The report was due in mid-November 2025 but as of February 2026 remains under review by the city attorney's office. Residents have raised concerns about the delay, as decisions about power lines, water systems, and roads depend on this plan. This is worth tracking - when it's released, it will shape infrastructure decisions that directly affect individual rebuilds.

Timing Your Rebuild Relative to the Community

The question of when to start is partly about your own readiness and partly about what's happening around you. A few things to consider:

• First movers face more disruption but fewer scheduling conflicts. If you start early, you'll deal with less competition for subcontractors and fewer logistics conflicts on your street - but you may also be building next to active debris sites or ongoing utility work.
• Waiting has its own costs. Construction pricing isn't getting cheaper. Labor availability may tighten further. And the longer you wait, the more you're competing for the same subcontractors as everyone else who also waited.
• Infrastructure coordination is real. If LADWP is about to trench your street for undergrounding, that affects your construction access. Understanding utility timelines for your specific block matters.
• Community recovery builds on itself. Once a critical mass of homes on a block are under construction or complete, commercial services follow, and the neighborhood starts functioning again. Thomas James Homes expects to complete most of their Palisades projects in late 2026 and early 2027.

Recovery Tracking Resources

• LA City Planning: Palisades Rebuild and Recovery
• LADWP: Restoration and Rebuilding Efforts
• Council District 11: Pacific Palisades Updates
• The Canyon Alliance: Undergrounding Updates

This page provides general information about fire rebuilding in Los Angeles and is not intended as legal, architectural, or engineering advice. Specific projects require evaluation by licensed professionals. Information reflects conditions as of February 2026; regulations and requirements continue to evolve.