I was shocked to see the terrible destruction of the suburban neighborhoods (Coffey Park) in Santa Rosa by the wildfires this month. I know that area will never be the same, but I was curious about how the area will be rebuilt. I assume the homes will be put back and eventually people will be living on those streets again.
For example, when the homes were originally built, economies of scale were in place: construction workers, materials, equipment, finances, etc. were centralized by the home builder. With rebuilding, each individual homeowner’s insurance policy needs to kick-in to provide the funding, and that timing may not be aligned with others on the same street.
My questions:
Will they rebuild one home at a time? Is it possible to see a new home appear next to some burned properties? Or will they wait until a whole street is ready to be rebuilt and then move-in with materials, equipment, workers, etc.?
Can the existing foundations and driveways be used? Will the properties be scraped clean all at once, or just one at a time?
Will the original specs or plans for the house be used, or will people be allowed to build a different house on the same property, if they have the means?
How does the financing work for one of these homes? What happens to the existing mortgage if the home is completely destroyed, and needs to be rebuilt?
Can a homeowner just take the insurance payout and just leave the area if they want? What happens to their property/lot in that case?
I, and a lot of us here, live in neighborhoods that look just that that one used to be, so the recent events got me thinking about what would happen here in a similar situation.
A lot of the answers to your questions depend on information we don’t have access to, including the terms of the homeowners’ mortgages, insurance policies and homeowners’ association rules if there is one. (I think Coffey Park had an HOA.) I’ll take a stab at it though.
If the homeowners have any insurance at all, it will cover their home alone. That suggests that they will each receive a settlement for their individual losses and be responsible for hiring contractors to rebuild each individual home. Not all homeowners will have insurance, particularly if they have already paid off their mortgage. Others will learn they don’t have enough insurance to rebuild. So, some homes will be rebuilt initially next to empty lots. Some neighbors may band together to contract and rebuild using the same contractor to get a lower price, but nothing will compel this.
Standard HOA rules will allow people to rebuild to the original plans without HOA approval or to new plans approved by the HOA. I suspect the HOA will approve many new plans that they otherwise wouldn’t have approved and the rebuilt community will look very different than the old one.
My insurance policy and mortgage together basically say that my lender has the first claim on my insurance proceeds. If the insurance payout is enough, the lender can keep the amount of my mortgage balance, discharge my mortgage, and leave me to figure out what to do with the smoldering lot I own free and clear. The lender could also hold the proceeds and release them to me in stages as I complete construction on the rebuilt house.
The mortgage lender will effectively have a say in whether the homeowner has to rebuild but if there is no mortgage or the insurance proceeds are enough to pay it off, the homeowner can choose whether to rebuild or just keep the empty lot.
The rules of the HOA and how strongly the HOA enforces them may affect whether people are pressured to rebuild. The HOA rules may require people to rebuild their homes. If so, residents who can’t afford to rebuild could face fines for not rebuilding. These fines could make it economical to hold the empty lot. So, homeowners facing fines will likely sell their lots to people who can afford to rebuild. This would include developers and speculators.
Also, don’t forget that the fires created a vast field of toxic ash and hazardous debris. Owners won’t be granted permits to rebuild until the debris and contaminated soil is removed. And it can’t be hauled to any old waste dump, it must be hauled to a licensed toxic waste dump.
I was thinking about this as well. It would be cheaper for a single developer or builder to rebuild an entire street or neighborhood together. I remember reading about how places like Levittown were built and I think they would have a sort of assembly line operation going, so that teams of, for example, tile installers would move from house to house installing tile (or drywall or flooring or whatever). But that’s not possible when all of the homes are separately owned. As suggested, individual homeowners could band together to hire the same contractor to build multiple houses. They could get economies of scale and the builder could set up a common field office for all of the clients.
But what if one homeowner wants a basic house, while another wants a a fancy rebuild? How do you allocate the costs? It’s not a simple proposition. (I’ve heard that 3,000 homes were destroyed. In theory, that would mean 3,000 separate home building projects. There aren’t enough contractors to rebuild all of them at the same time.)
One of my brothers is a high end contractor in Laguna Beach. That area has also had wildfire damage wipe out parts of neighborhoods. Some of which my bro has done rebuilding in.
These were high end 1960s hillside tract houses. And houses which were setting on land that today is worth 300x what the house and land sold for new.
As said above, the cleanup & permitting process was involved. Pretty much everybody built a new Tuscan style McMansion in place of their earlier 4br ranch house. Each house was custom, although many came from more or less canned plans.
The few people whose houses weren’t destroyed were kinda disappointed. Suddenly they were surrounded by first construction, and then 2010-era McMansions loaded with all the high end features and gourmet kitchens. Meanwhile their insurance co bought them a new wood shake roof and they still have their small kitchen with the avocado appliances.
The key thing of course was most of these folks had kept their insurance coverage going up as their land and house had appreciated. The folks that hadn’t instead sold their land for the 300x gain and moved inland. Anybody who hadn’t lived there long and hadn’t enjoyed all that sweet, sweet, tax free appreciation were screwed.
LSLGuy substantially ninjae’d me there about the McMansions. After the 1991 Oakland Hills fire, many people built McMansions on their land, leading to endless complaints about blocked views. With 20/20 hindsight, people suggested that the city council should have made some zoning rules to prevent that.
One wonders now what TPTB in and around Santa Rosa areas will learn from that, and how they will deal with it. As noted, the rebuilding may be very different from the originals, and it might not be obvious in advance how that’s going to look.
Unless this is some sort of condominium situation, each house and the land is individually owned. I suppose the owners could pool resources, and sell to a developer or make a common deal with one to rebuild all the homes, but that would be very difficult to execute effectively.
It’s going to depend on the age of the foundation and the condition it’s in after the fire. Driveways, maybe, but I suspect many of the foundations will no longer meet code and so will need to be upgraded to do so, at the very least.
There have been some significant changes to the building code since many of those houses were built. It might be possible to use the architectural plans with minor modifications, but the structural plans will almost certainly be no good.
It’s possible that the municipality will waive some of the rules to accommodate victims of the disaster, but it’s unlikely that building codes will be relaxed. And I suspect many people will want, if they can afford it, to rebuild a home that is more in keeping with life in 2017 than it was whenever the original home was built. It might even be that some aspects of the code would be tightened precisely because of the fires in order to prevent the same thing from happening again. Setbacks might be changed (especially on the sides of homes) or special fire-proofing efforts might be required. Some areas might be rezoned as “Wildland-Urban Interface” areas, which already have tighter requirement related to fire prevention.
As others have pointed out, each home owner is unique. Here in northern Ohio, a tornado hit the crossroads town of Pittsfield on Palm Sunday, 1965, wiping out nearly everything.
52 years later, the town has a new church and businesses, and a bunch of 1960s style ranch homes that replaced farm houses. But, there are still empty lots, and a couple of “driveways to nowhere”. Some survivors are discouraged and just leave.
No offense, but my guess is that there isn’t (or wasn’t) much demand for housing in Pittsfield, Ohio. From what I’ve heard, homes in Santa Rosa were and are in high demand. So even if someone chooses not to rebuild, they should be able to sell the building lot and take that and the insurance settlement and get a nice house almost anywhere else. And in the meantime, someone else will build on that lot.
My bro’s area is subject to the California Coastline Commission. Which enforces everyone’s right to their views as they existed when their house/land was purchased.
Any attempt to expand any building requires that a temporary construction of sticks and string and flags be erected which describes the outline of the new building. Which must then be left in place for one entire year so anyone further behind can see the impact on their view in every season.
There are complicated rules about how much objection by how many people behind the intended construction can prevent it being built unless redesigned. If a redesign is necessary, a new sticks & string façade is built and another year goes by.
This materially slows down the reconstruction process after a disaster. But it does prevent the race to build ever larger houses and buildings without regard to the damage done to those around you.
One of the new standards there is no new wooden roofs and in many cases, lawn sprinklers installed on the rooftop to keep everything cool. At least until the water pressure dies.
Thanks for the info and replies! Interesting stuff, and I can see now how complicated this can get. I never realized there would be toxic clean-up required. What a nightmare.
I don’t think views are going to be that big an issue in this case. This was a typical suburban neighborhood located centrally in a valley. That said, with each rebuild likely to be custom, upgraded to current standards, and on an individual schedule, the character of the neighborhood will be very different than it was.
I think you’re right about that; there might be one or two homes rebuilt on a street of perhaps ten or twelve, with a couple more under construction and some empty lots for a good long time. Between that and the bad memories, I suspect some may choose to move elsewhere.