California’s Apartment Industry Eyes Wildfire Recovery Plan

As wildfire season approaches, state legislators are considering a comprehensive package, including a fund that would help keep utilities financially stable after major fires.
Los Angeles. Image via Pixabay user Free-Photos

Multifamily stakeholders, utility company executives and California state officials are hoping a comprehensive package of bills proposed by Gov. Gavin Newsom as part of a multibillion wildfire recovery and preparedness plan can pass the State Legislature by July 12, in time to be ready for this year’s wildfire season. The legislative package comes several months after a series of deadly fires ravaged Northern and Southern California destroying more than 32,000 homes and 4,300 businesses and killing more than 100 people.


READ ALSO: Wildfires’ Impact on California Housing


Newsom, who has made wildfire prevention and mitigation a top priority since taking office in January, released a progress report late last week on recommendations laid out in his administration’s 60 Day Strike Force report.

One of the main proposals was a fund to help California utilities, including PG&E, which is going through Chapter 11 bankruptcy following its role in sparking some of the wildfires, stay solvent even while handling claims. The Wildfire Recovery Fund, which could range from $10.5 million to $21 billion, would “create mechanism for utilities to stabilize their financial health in order to provide safe, affordable and reliable energy, ensure fair compensation for wildfire victims, and protect ratepayers from massive rate spikes. It will provide ready dollars to pay claims from future utility-caused wildfires,” according to the governor’s report.

The package would require utilities, including PG&E, San Diego Gas & Electric and Southern California Edison, to spend at least $3 billion on safety without profit in order to access the proposed Wildfire Recovery Fund.

Impact on ratepayers

Stephanie Shirkey, senior policy and compliance counsel for the California Apartment Association. Image courtesy of the CAA

But legislators and others are concerned that some of the changes could mean increases for ratepayers.

“The goal of passing a legislative package by July 12 is ambitious, as are the ideas planned to be included in that package. We support the governor’s efforts to prevent wildfires and to more effectively respond when they do occur. We also support efforts that ensure fair compensation for wildfire victims while minimizing the amount that ratepayers and taxpayers are forced to pay during recovery efforts, especially in cases where utilities are to blame,” Stephanie Shirkey, senior policy and compliance counsel for the California Apartment Association, told Multi-Housing News. We are still reviewing the governor’s proposal and look forward to taking part in the legislative process, ensuring that rental property owners and renters are kept as safe as possible and treated fairly in the wake of disaster.”

Shirkey added, “We agree with the governor’s Strike Force project report that ‘we all have an individual responsibility to step up and step in for our communities’ as we face these threats.”

She noted the rental housing industry has stepped up in multiple ways to help fire victims recover, noting the CAA had assembled a list of resources for fire victims, ensure members were aware of the state’s anti-price gouging restrictions when a state of emergency or local emergency is declared and encouraged members with rental housing available in affected areas to make consider making special considerations for fire victims.

On May 31, Newsom signed an executive order extending the state’s prohibition on price gouging for counties recovering from numerous fires including the Mendocino Complex, Carr, Tubbs, Nuns, Atlas and Thomas fires.