Rebuilding permits in Altadena have grown, but building affordability and financial problems are emerging

Seven months after wildfires destroyed thousands of homes in and around Altadena, nearly 70% of severely damaged homeowners have not sold their property or taken steps to rebuild.

But a few weeks after the fire’s first anniversary, the number of people in that limbo has dropped to less than half, as many have taken steps to recover, according to data released Thursday by UCLA’s Latino Policy & Politics Institute.

While it’s the latest sign of progress in the aftermath of the Eaton fire, researchers say recovery is still far from over for many fire survivors, even if they’ve started on the road to rebuilding.

The data shows that there has been a new wave of startups and developers through the permitting process, but there has been a slowdown after that point due to, among other reasons, funding.

About 44% of homeowners have fully approved their rebuilding permits, but only 30% have started construction, according to the data.

“This is the first step in a much longer and broader process,” said Gabriella Carmona, senior research analyst at the institute and lead author of the report. “Recovery is still very uncertain for many families.”

Just under 50% of homeowners, the analysis found, have not taken steps to recover.

The report analyzed data from single-family homes that were at least 50% destroyed in the fire, including building permit applications, property sales records and fire damage assessments, as well as racial and ethnic indicators of potential disparities. The report did not analyze data for employers, businesses or the Palisades fire station.

“Rebuilding activity increased across all groups, but the biggest gains occurred among black and Latino homeowners,” the report found, comparing the same data from August to February. The most recent data found that nearly 56% of Black homeowners have taken steps to refinance, up from 27% in August. Among Latino households, that metric rose to 63% from February, compared to 35% in August.

The new data comes as Eaton’s fire discovery enters its 15th month. The Times last week published an analysis which found that more than half of all homes destroyed in the fire in Eaton – around 6,000 – have applied for rebuilding. The review also found that it is increasingly taking longer for applicants to receive approval, up to around 155 days.

Compared to the pace in Santa Rosa after the 2017 Tubbs fire, a Times analysis found rebuilding in Altadena and Pacific Palisades was notably slower.

Los Angeles County Supervisor Kathryn Barger, who represents Altadena, called the increase in applicants “a positive push forward,” but acknowledged that means about 3,000 displaced residents still haven’t started moving forward.

“The fact that only half of wildfire survivors have applied makes it clear that significant barriers remain, particularly financial,” Barger said in a statement. “Many affected residents have not taken steps to rebuild because they lack the money to move forward – a problem exacerbated by delays in insurance payments.”

Barger went on to ask for more support from the state to help finance the recovery, something Carmona said would help stranded homeowners. But Carmona also said that new policies are needed to support different financial means for families and community members to finance reconstruction, access reasonable credit and receive full insurance coverage.

It’s unclear when and how much Southern California Edison might pay to extinguish the victims — the utility has not admitted to causing the fire but says its equipment is likely connected to the arson, and faces hundreds of lawsuits — and what non-traditional or philanthropic options might be available to families.

“Many families [are] they are stuck between wanting to rebuild” and not being sure “what loan makes sense or what they will get,” Carmona said.

Marisol Espino, who lost her home in the Eaton fire and has become a disaster manager for the Legacy Land Project, said the financial questions have become a mental exercise for her and many of her former neighbors.

“The biggest misconception is that people can ‘rebuild,'” Espino said. Instead, people find that they have little insurance, that their insurance money is tied to their mortgage, that they have poor credit quality or that the loan they received has significant limits.

“What’s happening is people are eating their money, taking out their 401(k), sacrificing their retirement and their children’s future to try to get back home,” Espino said.

He understands the desire to return home, he said, but worries about the long-term stability of this next wave of homeowners trying to rebuild.

A recent survey from the Ministry of Angels, a non-profit organization focused on fire recovery and facilitating community planning, found that nearly 40% of fire survivors have gone into debt since the fire, and most said their mental health worsened.

“It’s a twofold recovery, and the No. 1 factor is money,” said Joy Chen, executive director of the nonprofit Every Fire Survivor’s Network. He said the group found that people were able to quickly rebuild to their previous wealth or receive full insurance coverage.

While there are financial obstacles for many, the UCLA report revealed positive trends when it comes to home sales: Not only have investors made up a smaller portion of home buyers in recent months, but fewer homes are also being sold. Altadena locals have been very concerned about investors and companies buying homes in their affordable and diverse community, especially in Black neighborhoods where many homes have been passed down through generations.

In August, nearly two-thirds of sales of homes destroyed by fire were made by investors — defined as limited liability companies, corporations or family trusts associated with the business of investing in real estate — but by the one-year mark, that share fell to about 59%, according to the report.

New listings in the fire zone are also down, with about 1% of severely damaged homes going up for sale in February, down from about 2% five months ago.

“In general, sales were lower” than expected, Carmona said. “We had a very big increase in the first few months. … There hasn’t been a big increase in sales since then.”

And while much is uncertain about Altadena’s recovery, signs of progress offer hope, said William Syms, executive director of the Legacy Land Project, which was established after the Eaton fire to provide direct assistance to residents in need. His nonprofit is one of several that make up the Eaton Fire Collaborative, which helps provide residents with the many resources they need to get ahead, including case management and financial support.

“The connections that happen, the conversations and events and the power of the community work,” said Sym. “I think a lot of people realize that it’s possible to rebuild – and even though it’s expensive and expensive, together we’re going to make sure that anyone who wants to go home can.”

That includes Espino, who said Habitat for Humanity recently found a way to help finance the rebuilding of his multi-generational family.

“We’ve moved on to the next stage,” said Espino. “We are trying to bring us all back together, go home.”