Happy Tuesday, and welcome to another edition of Rent Free.
This week’s newsletter takes an extended look at the Los Angeles–area fires and the alleged link between bad zoning, land use, insurance, and environmental review policies and the damage done by the fires themselves.
The Los Angeles Fires and the Overblown Role of Public Policy
California, of course, has many bad public policies. You can’t swing a dead cat without hitting a bad California policy. Swinging the cat probably violates a couple of them.
With the outbreak of deadly fires in the Los Angeles area, a number of journalists and wonks are drawing links between many of these bad policies and the unprecedented destruction resulting from the blaze.
State and federal environmental review laws add years of delay to needed controlled burns and fuels reduction activity on public lands. California’s zoning laws have pushed more people into the urban periphery where they’re more exposed to wildfire risk. California’s suppression of home insurance premiums has done the same by masking the cost of living in wildfire-prone areas.
These criticisms are all leveled at bad policies this newsletter has repeatedly covered.
In some contexts, those policies do make the damage done by wildfires worse. They’ll certainly complicate Los Angeles’ recovery efforts.
But the connection between bad land use, insurance, and environmental regulations and the damage done by the current Los Angeles fires to people and property is more tenuous.
On closer inspection, this appears to be a severe natural disaster with natural causes. Bad public policy has played only a marginal role.
Reviewing the Role of Environmental Review
The hilly shrubland where the Palisades and Eaton fires started, and are still burning, are a mesh of federal, state, and locally owned parks, nature preserves, and undeveloped open space.
A lot of commentary has naturally focused on how federal and state environmental review laws prevent state and federal agencies from doing fuels reduction activity that would reduce wildfire risk on these lands.
The National Environmental Policy Act (NEPA) and its state-level equivalent, the California Environmental Quality Act (CEQA), both require agencies to produce book-length reports before performing controlled burns or mechanically thinning vegetation.
Producing those book reports takes years. Environmental lawsuits alleging insufficiently long book reports can add additional years to the process.
According to research by the Property and Environment Research Center (PERC), NEPA reviews for mechanical thinning (where flammable vegetation is cleared away) can take over five years. Reviews of prescribed burns can take over seven. Litigation can add another year or two to the process.
This lengthy environmental review process makes good forest management much more difficult. There’s not a lot of evidence that it’s contributed to the severity of the Los Angeles fires.
That’s because the chaparral and shrub–covered hillsides currently burning are not areas where controlled burns would typically be done, says Luca Carmignani, an assistant professor and wildfire researcher at San Diego University.
“Controlled burns” in those environments are hard to control. Period.
Fires in shrubland areas “tend to be high-intensity fires where the entire plant burns. It’s a little less controllable than fire on the ground of a forest floor. That tends to be much, much lower intensity,” he tells Reason. “Controlled burns are done in some cases, but it’s mostly for areas covered by grass or areas not really applicable to Los Angeles.”
Mechanical thinning is a more useful fuels reduction method in the Los Angeles areas, says Carmignani. It’s also an area where a lot of mechanical thinning already happens.
The Santa Monica Mountains, where the Palisades fire is still burning, has been the site of a lot of mechanical thinning activity. Journalist Kevin Drum notes that fuel reduction activity happened on over half a million acres in California last year.
More likely could have been done without NEPA and CEQA in the way.
Even so, there’s also only so much fuels reduction can do to reduce wildfire risk in the conditions that led to Los Angeles’ current fires: exceptionally strong seasonal Santa Ana winds that reached hurricane-levels of intensity.
“If you have strong winds, embers fly away miles ahead of the fire,” says Carmignani. Clearing a few hundred yards here or there can provide firefighters with areas to operate. But it isn’t going to stop the fire from spreading to new areas when winds are that high.
If the four-lane Pacific Coast Highway wasn’t enough of a fire break to prevent beachside Malibu homes from burning down, one wonders what would be.
The WUI Has To Go Somewhere
Numerous articles argue that California’s land use regulations have thwarted urban infill development in favor of suburban sprawl in the fire-prone wildland-urban interface (WUI). The low-density, wood-frame, single-family housing built in the WUI is the type of housing most at risk of burning down.
This narrative isn’t wrong. But its relevance to the destructiveness of the Los Angeles fires is tenuous.
As City Journal‘s James Meigs writes (in an article otherwise critical of California’s restrictions on infill development), “L.A.’s damaged and threatened neighborhoods are an outlier in this dynamic [of infill restrictions encouraging suburban sprawl]. Some were developed as much as a century ago, long before economic factors lured other Californians into WUI regions.”
The population of Altadena, where the Eaton Fire has destroyed thousands of homes and claimed over a dozen lives, has been flat since 1970 for instance.
Indeed, a notable feature of these fires is just how urban they are. Local governments in solidly urban communities like Santa Monica and Pasadena have issued evacuation orders for parts of their cities.
Pacific Palisades, the other community most heavily affected by the fires, also doesn’t neatly fit the story of infill restrictions begetting fire-prone suburban sprawl.
The reason that people live in Pacific Palisades is more easily attributable to pull factors of the area’s beautiful hills and ocean views than the push factor of urban Los Angeles’ restrictions on multifamily development.
If an apartment in the city is what the residents of Pacific Palisades preferred, odds are they could afford it—even with the artificial scarcity created by zoning.
One reason that urban infill development is more resilient to wildfire risks is that it is urban: a concrete apartment building that covers an entire lot is less of a burn risk than a wooden single-family home surrounded by yards.
Another reason is that it’s infill: There are a lot of structures between it and natural, wildfire-prone areas. But the wildland-urban interface is going to be somewhere.
“If you have any city, you’re going to have a border with some amount of wildland. In California, just about any kind of undeveloped land is going to have some particular wildfire risk,” says Judge Glock, research director at the Manhattan Institute. “You cannot prevent wildfire by not developing.”
It’s true that single-family homes with large yards are more at risk of burning down. Zoning mandates low-density development in areas currently being threatened by fire.
Even in a world without zoning and density restrictions, one would also assume that areas on the urban periphery (wherever it lies) are going to be of lower densities as well.
Suppressed Premiums, Enhanced Fire Risk?
Even single-family homes on large lots can be hardened against fire risk. Ideally, insurance companies who write policies in wildfire-prone areas would incentivize homeowners to adopt some of these hardening features.
California’s insurance regulations, as Reason covered yesterday, limit insurers’ ability to accurately price wildfire risk into policy premiums while also forcing them to renew policies in wildfire-prone areas.
These regulations have created a financial crisis in California’s property insurance market and are the driving force behind the state’s largest insurers’ efforts to scale back the business they do in the state.
Did these same insurance regulations result in more building in Los Angeles’ wildfire-prone area and thus more homes being devoured by wildfire?
The answer is “maybe,” says Ray Lehman, a senior fellow at the International Center for Law and Economics. He says fire risk doesn’t increase linearly with the amount of development that’s built in fire-prone areas.
Building a little bit of housing in a wildfire-prone area increases risk because that small amount of housing is next to a lot of combustible nature. But building a lot of housing reduces fire risk because that combustible nature is consumed by less flammable development.
There’s a point where the marginal additional home goes from increasing an area’s fire risk to reducing it.
Conceivably, California’s artificially reduced premiums increased development in wildfire-prone areas, says Lehman. Whether that increased development increased or decreased wildfire risk is harder to say.
That calculation is also complicated by the fact that “there will always be very wealthy people who like to live on very large properties on cliffsides in the woods,” says Lehman.
As mentioned, some of the areas most devastated by the Los Angeles–area fires have been very wealthy areas in Pacific Palisades, Malibu, and the Hollywood Hills.
Absent insurance subsidies, it’s likely there’d still be a lot of rich people willing to pay very high insurance premiums to live in large homes in semirural seclusion.
Properly priced insurance would certainly help incentivize more fire-safe building techniques and retrofits. But it wouldn’t stop homes being built in high fire-risk areas.
Marginal Effects
The above post might well read like a long list of “well, actuallys,” particularly given that California’s zoning, environmental review, and insurance laws are all deeply flawed and in need of much reform.
A number of these policies will certainly make it more difficult for California to recover from the still-burning wildfires ravaging the Los Angeles area.
The state’s ruinous insurance regulations had already left many homeowners without coverage and pushed the industry as a whole into crisis mode before the most recent conflagrations. The estimated $150 billion in damages caused by the Palisades and Eaton fires only adds to this regulatory-created disaster.
California’s land use regulations made building housing an unnecessarily expensive and lengthy process before the fires. The burden of those regulations will only become more apparent as tens of thousands of homes and businesses need to be rebuilt.
But one shouldn’t overpromise the results of reform. A California with more rational, liberal zoning laws and more accurately priced insurance is still going to experience wildfires.
Those wildfires will still destroy homes and tragically continue to claim lives. Better policy can mitigate the damage and reduce risk. But those risks can never be erased so long as we live on a planet that occasionally wants to kill us.
Quick Links
- Speaking of burdensome California regulations, Gov. Gavin Newsom has issued an emergency order that waives property owners’ need to comply with CEQA and coastal zone regulations when rebuilding, provided those rebuilds aren’t much bigger than whatever structure was destroyed in the fire.
- Some state legislators are praising Newson’s executive order while calling for wider, permanent permitting reform in the wake of the fires.
CEQA and other permitting regimes, once envisioned as protections for our environment, have morphed into obstacles for meeting our housing and climate goals. This is a perfect opportunity for us to exercise broader permitting reform in the face of our new climate reality.
— Buffy Wicks (@BuffyWicks) January 12, 2025
- The destruction wrought by the Los Angeles fires is providing a teachable moment in supply and demand. The destruction of so many homes is boosting demand for the remaining units, the Los Angeles Times reports. Local and state rent control laws are keeping a lid on the natural price hikes that would result, with the consequence that individual units are attracting dozens, and occasionally hundreds, of applications.
1,000 applicants pic.twitter.com/Fzlh2vENco
— Armand Domalewski (@ArmandDoma) January 12, 2025
- Over at CityLab, Kriston Capps covers some of the fire-resistant building techniques that helped save some Los Angeles–area homes from destruction.
- It’s not just homes and businesses being destroyed by the fires. Los Angeles–area churches and other houses of worship have also been destroyed or damaged by the blaze.
The post The L.A. Fires Are a Natural Disaster, Not a Policy Disaster appeared first on Reason.com.
