Strength in numbers could help California in massive rebuilding effort after wildfire disaster

November 1, 2017

  • There’s a proposal being considered to pool together builder and crew resources in some of the hardest hit areas of the recent California wildfires.
  • Experts say the approach worked before in other California disasters and could lower the cost of rebuilding.
  • Last month’s wildfires damaged or destroyed more than 14,700 homes across several counties in Northern California.
  • One homeowner who lost a home said, “It’s a bleak and scary future that we’re looking into, and we have to find a way to wade through those murky waters.”

Thousands of homes lost to last month’s devastating wildfires in Northern California could be rebuilt faster and more efficiently using production-scale techniques, according to industry experts.

Indeed, a proposal is being floated to pull together construction and crew resources to rebuild whole communities or streets lost in the wine country wildfire disaster. This mass-building approach could become particularly important as contractors say they are already being inundated with calls for rebuilding requests and some worry about shortages in skilled labor and materials.

“Because we have such a large situation, we have to think beyond our own property lines,” said Julia Donoho, an architect and attorney in the Santa Rosa area.

Backers of the approach say pooling together resources could allow for strength in numbers and increase overall efficiencies in the use of skilled crews, site supervisors, equipment as well as the purchase of construction materials. It also might be a way to get fire victims back into their homes faster.

Overall, last month’s wildfires damaged or destroyed more than 14,700 homes across several counties in Northern California. Sonoma County bore the brunt of the disaster but there also was destruction in Napa, Mendocino, Lake and a few other counties.

Sonoma County lost about 5,000 homes, and Santa Rosa — the largest city in the county — had 3,000 homes destroyed and entire neighborhoods wiped out. The homes lost in Santa Rosa represent roughly 5 percent of its housing stock.

In addition to the property losses, there also were at least 43 fatalities linked to the Northern California fires, with 23 in Sonoma County.

Donoho said she’s working on a project to rebuild all of Santa Rosa’s Coffey Park neighborhood and talking to homeowners about what they’d like to see in the rebuilt community.

About 1,300 homes were lost in Coffey Park, a middle-class neighborhood. There also were higher-end neighborhoods lost that might not lend themselves to production-style rebuilding since there may be too many customized features, industry executives say.

In any event, some believe the rebuilding process could take 3 to 5 years to complete and note that the current priority is a government-led hazardous and toxic waste cleanup at burned homesites. State officials have said they expect the rebuilding to start in earnest in the springtime.

“Some of the homeowners want to be back in so quickly that we should just rebuild with the plans with modern standards that they already had, and that would give them the fastest permit,” said Donoho. “Other people have ideas about redesign. So we need to find the right balance.”

Added Donoho, “We don’t just want a few houses back, we want our whole neighborhood back. If you get your house back, but you don’t have a neighborhood of houses around you and you’re surrounded by 10 years of construction.”

Jeff Okrepkie, an insurance agent in Santa Rosa who lost his home in the wildfires, said grouping together homes to rebuild sounds “great but it’s hard to get this whole process figured out right now.”

In fact, there is still an ongoing process of fire victims going over losses with insurance adjusters to see how much in proceeds they will get. Some also are dealing with banks who hold the mortgages to homes.

“It’s a bleak and scary future that we’re looking into, and we have to find a way to wade through those murky waters,” he said.

Okrepkie said even before the wildfires there was a “massive labor shortage and a lot of that has to do with the rental and home market up here. Pretty much everybody who could swing a hammer who was reliable already had a job. It will get worse because we just lost that many residential structures.”

In Sonoma County, there’s also believed to be fewer than six major homebuilders that can construct multiple homes or residential developments.

“When you start looking at the numbers, we’re going to need people from somewhere else to help do it,” said Okrepkie.

At the same time, there are concerns the new construction crews coming to the area will only exacerbate the region’s housing shortage.

Even so, pooling together resources might attract more interest from established builders and contractors from outside the Northern California region.

A large production-scale rebuilding approach was utilized previously in California wildfires, including in 2003, 2007 and 2008. The biggest of those was in San Diego’s Scripps Ranch community after the 2003 Cedar fire, a deadly blaze that destroyed a total of more than 2,300 residential properties in the region.

A handful of builders were responsible for rebuilding hundreds of the homes lost in Scripps Ranch. That effort took several years and some of those same firms already have shown an interest in participating in the rebuilding.

“With 6,000 homes and the devastation that we’re seeing, we think we could offer a helping hand,” said Jeff Pack, an executive with Stonefield Companies, a San Diego-area homebuilder that helped rebuild homes after the Cedar fire and wildfires in Southern California.

Added Pack, “They are going to need a lot of help up there in rebuilding. It’s going to be a massive effort with the amount of homes that have been lost.”

Stonefield already has made inquiries to see about the availability of its subcontractor pool to assist in Northern California. The company could use its playbook from the Scripps Ranch fires to keep the costs down.

“Our blueprint down there allowed the homeowners to team up together and that allowed the cost spreading to occur from architectural plans to contractor superintendent onsite to site supplies to different tractors that the subcontractors needed to use,” said Pack.

Residential insured losses from the recent wildfires totaled more than $3 billion, with the claims total expected to go up, California’s insurance commissioner announced Tuesday. The insured losses in Sonoma County exceeded $2.6 billion.

“Doing a group rebuild is a way to lower price so people can afford to rebuild,” said Kenneth Klein, a California Western School of Law professor and expert on natural disasters. He said insurance industry data shows about 80 percent of the homes in America are at least 20 percent under-insured, meaning they do not have enough insurance proceeds to replace their homes to the state it was prior to the destructive incident.

Klein, who lost his Scripps Ranch home to the Cedar fire, said almost all of his neighbors decided to do a group rebuild after the 2003 disaster “because it was the obvious way to deal with the gap in insurance proceeds and rebuilding your home.” That said, Klein notes he had “full insurance” to cover all his home’s losses but still ended up building in tandem with a neighbor.

By Jeff Daniels

CNBC.com