Why Most LA Homeowners Aren’t Rebuilding After Fires

Did the fire victims get enough money from insurance and is LA rebuilding right now? We put a panel of experts together who are on the ground talking to fire victims to see what's going on. I'm not certain that we've even reached the point of accelerating costs yet. And that's gonna be another tragedy. And I think that is actually when people are gonna start selling lots. And I think that's also gonna make prices tremendously go down on these lots. I'm Siamak Khorrami, welcome to California Insider. Farid, Gary, and Ken, it's great to have you on, welcome. Thank you. We wanna talk to you about what's going on in Palisades and Altadena. We have had the fire disaster now and a lot of people are wondering what's happening to the people that lost their homes. Did they get enough money from insurance? Do they have enough money to build? What do you see there? I think from a legal standpoint, my firm represents thousands of people out there. What we've noticed across the line or across the board is a lot of people don't have, had inadequate insurance or didn't have any insurance at all. So the building process becomes extremely difficult to do. Plus you add on the complicated landscape of the permitting system, which you gotta go through to be able to do it. It's overwhelming. Plus you're only nine months removed from the loss. So I think people are still dealing with the catastrophe. The last thing on their mind or the thing that they're probably not prioritizing right away is how do I go rebuild, right? There's schools, there's sick parents, there's just so many other variables that have affected their life. The last thing that they're really focused on or the immediate focus isn't always, let me just go rebuild. At least that's what we've seen in Altadena. I definitely agree. There's a lot of confusion. It starts with these people did not obviously expect this to happen and they don't even know where to start when it comes to construction. So from the people that reach out to us, most of them are just in a position of how can you help us even begin from the first point? And most of the time they tell us we have just enough money to do this or they think they have just enough money to do it and we give them the pricing and they're usually about 20% off from what they need to get it done. So I'd say about 50 to 60% of the people don't have enough money and the other 40%, either they're ready to go or they're still in a position where they think they're ready to build but they need guidance on where to start. Farid, you talk to these people. They come to you and you guys, you have a big lawsuit, right? Yeah, we represent about a little over 2,500 people currently in Altadena. A lot of them suffering from complete loss of their home. A lot of them unable to return to their home because unlike I think other fires you've seen which are wildfires, this is more of an urban fire because of where it happened, the density in which it happened. You have chemicals and whatnot that essentially spilled over into these homes due to the materials that were used to build these homes 100 years ago. They went up in flames. If a home survived or if it survived in that area, you had the wind blow essentially land those toxic chemicals onto these homes. So a lot of people who have testing done, hygienist testing done on inside the home or the exterior of the home, you've noticed you have asbestos, you have arsenic, you have lead, makes the building process very difficult. I'm sure. Even the structures that survived or is there a way? The remediation for asbestos is complicated. California has a lot of rules. I mean, federally it's regulated. So the remediation of asbestos, the remediation of lead, arsenic, it almost makes, how do you go back into that environment? How do you go back into that home? And also, and you mentioned PTSD, you have a lot of people who the community is gone. And I think you take that for granted sometimes. Your entire community is gone. Where your friends live, where your neighbors lived, where your local grocery store was, where your kids went to school, your church, all that is gone. What do you go back to? When you look at it from a different elevation, if you look at it from a bird's eye view and you actually analyze all those different categories of loss, you kind of realize, well, this fire is very unique. I don't think it's similar to any other fire that's taking place, at least in California, that we know of, due to the various factors we just mentioned. Now, Gary, the people that come to you, they already have made up their mind to build or they're exploring? We have a lot of attorneys that refer us, the customers. So those clients that come in mostly are in a position where they're ready to go and they're very eager to get started. A lot of other people, just because we've been building in the area for the last 15 years, Northeast LA all the way to Altadena, Pasadena, they have heard about us and they know we're a design-build firm, so they feel a little more comfortable working with us. So they call us and say, hey, are you a one-stop shop where we could just reach out and talk to one person and handle all the design, the permitting, the build, and we don't have to run around and find different subcontractors and trades to get this done. So they're more in a position where they just wanna know what it's gonna cost, as long as the money's there, they're ready to go. Ken, do you see a big difference between what's happening here and other disasters, as Farid said? I don't think so, no. I think a natural disaster essentially creates the same elements, right? So for instance, we were involved in a lot of the rebuilds from the Tubbs Fire in Northern California in October of 17. And there we saw a community that was actually well more prepared than Altadena or the Palisades for this because it was more of a working-class community. They had more insurance agents in the community. They had more plumbers. They had more builders. They had more electricians. So they were able to put together a plan more quickly and they were able to support one another more quickly. I just think that where we are right now in the Palisades and Altadena is very specific to everyone's individual circumstances. For instance, we were approached by five clients in the Palisades. Two have since decided to move. One is moving forward and is in permits with us. A fourth is starting, has just engaged in an architect and will build with us. And the fifth is still trying to figure it all out. And I think that's a pretty good representation of these communities. You've got a certain percentage that just don't have the funds or the energy to stay. And then others who are, I'm not leaving, we're gonna make this right. And then you have the people in the middle who are still trying to figure it out, see if they can make the budgets work and see how they can get back to the community that is gone, right? Tubs fire was, where was that? Santa Rosa. So I think if you juxtapose that against Altadena, what percentage of the people there were working class, you said? Well, so that's a more apt comparison, I think, Santa Rosa to Altadena versus the Palisades. Ultimately, I would say in Santa Rosa, 90% of the people stayed. Were they first generation homeowners? Was that their, did they own that home? And a lot of them had younger children, so they wanted to get back to schools, right? For instance, Coffee Park became a very famous little ground zero in Santa Rosa. That was a community of 1,400 people. 22 people died that night. And they got back to rebuilding immediately. Interesting. I think a unique distinction between what you said earlier was a lot of the homes in Altadena were generationally owned. That's a little bit different. So I think when you look at homes that were passed down from their great-grandfather on and on, it's a little bit different as far as how that community was impacted. So Farid, you were talking to a lot of these people. The people you were talking to, did they have insurance or? So you're seeing almost like a split between a lot of people who had insurance, but even if they had insurance, they were underinsured because the value of these homes were, what it would cost to build that same home today, I'm sure these guys will tell you, is a lot more than what it would cost them to insure it back then, right? So I think to replace that product costs a whole lot more, and many of them were underinsured, completely underinsured, right? So you talk about stories. We have individuals who, this was like their great-grandmother's house that was handed over to them. During the fire, everything was burned. Everything the grandmother had left them, everything from her albums, her wedding dress, I mean, everything. Everything that was sentimental to them was gone immediately, right? So I think there is a price to put on that as far as what is the mental anguish for that, understanding what that is, but also you talk about the mental distress, the PTSD from that. Many people don't, they're not there yet to be able to go and be built. You know what I mean? I think you're seeing early on maybe people who are more resilient, more capable, more able to go and do that, but you have a strong base that's just not there yet. They're still trying to figure out what to do next, and then you're dealing with prices where, as you said earlier, 15 to 20% more, there's a sticker shock to that, right? So you take whatever insurance gives you, which is gonna be inadequate, you take a 20% or 15% markup on top of that because that's just what the cost is today to build due to all the other variables, then it's just people are not, people aren't there yet to be able to rebuild. I mean, you have stories, countless stories of people who lost literally everything, right, that they're not living in Airbnbs that the insurance company was providing to them, but that's run out. So they're living with families, it's added stress onto families. Now it's people who are, went from living in a house to now living in a one or two bedroom apartment, and you have people who can't even live in that, anywhere near that area anymore because the cost of renting has gone up substantially, just because, I mean, supply and demand. There's just not enough supply and there's tremendous demand. So you put all of these different variables together in a pot, it's created literally the perfect scenario for the distress these people are feeling. And I don't know how they get, I mean, I don't know what the relief is immediately for them. I mean, there's no amount of money that would relieve them. Do you think people, big portion will not rebuild and they will suffer loss? I don't know, it's hard to say. You know, the ones I speak to regularly about rebuilding, they tell me all the time, Farid, we're not even there yet. I'm not even thinking about that. I'm not, I'm just trying to get my kids back to normal. I'm trying to, some of them are still trying to buy back to school supplies for their kids. Some of them are trying to get their lives back in order. Gary, you mentioned 20% higher, and we've been hearing that the cost of the materials have gone up. Is the construction cost gone up because of this, or has it been up because of other reasons? So construction price hasn't stopped going up for the last, you know, since COVID. I mean, some say lumber will go up and down, but there hasn't really been a, I don't think the fires or the tariffs right now have like shocked prices that much. There's just been an increase throughout the last few years. But regarding the 20%, you know, I got an interesting call last week. A couple of our clients, they used the SBA relief. It was like the 300,000 they were giving to homeowners to kind of help them make up for the money that the insurance isn't, you know, able to give them. Is that a loan, or is that just- It's a loan, it's a 3% loan. It's a low interest loan. And one of our clients thought about taking it, but she was like, look, I was retired. I don't have any income, but the house was paid off, or they had a small loan on the house already. So she's like, if I take this loan and I use it to make up for the price, the construction appreciation that's happened these last few years that my insurance isn't covering, am I going to be able to pay the payment on this loan later? So I know you guys were, you asked a question about the home, people selling their homes. Recently, I also got a phone call, or the lots. Recently, I got another phone call from a woman for about a month. She was actually asking us, you know, what are the pricing up? Maybe she wanted to build a little smaller to try to make work whatever her insurance was giving her, and she just gave up. She was like, look, at this point, I just have to sell, and whatever loss I'm gonna take, I'll take, and I'll place it somewhere else. The fixed income issue that they have that you mentioned, right, people who are on fixed income, they don't have a job. Or no income. But then, if they rebuild, they get reassessed at a different tax level? Where do you think they're gonna freeze that? If you build over 10% of what your house was, you'll get reassessed. If you keep it within the 10%, you don't get reassessed. So I think that's interesting, because somebody who bought that house, let's say 30, 40 years ago, prices were absolutely different, right? So now they rebuild, and they build 10% more, because there's lots and lots that are fairly large. They're large, but the zoning restrictions don't let them go much bigger than what it is. You basically take all the setbacks, and then whatever's left, you could build 25% of the lot size. And do you think people will build smaller than, because? Our homes, from our projects, most people are either building exactly what it is. There are actually a handful of people who are already thinking about tearing their houses down, or doing large remodels. So this, not to say it worked in their favor, but it kind of did. They're rebuilding a much larger home. I have yet to meet anyone who has enough resources, who was not underinsured. The costs are certainly up. I think there is a worry that as we hit the permit cycle, the costs are gonna soar. That's my particular worry. We saw that during COVID, when there were supply constraints and whatnot. We saw that, again, after the Tubbs fire and others. You start running thousands of people through a narrow funnel to go buy and contract contractors, all at the same time. And the prices just absolutely have to go up. It's just simple, the supply and demand. So I'm not certain that we've even reached the point of accelerating costs yet. And that's gonna be another tragedy. And I think that is actually when people are gonna start selling lots. And I think that's also gonna make prices tremendously go down on these lots. I personally think they're gonna go down another 50%. Thank you for watching California Insider on YouTube. If you like our content, make sure to press the like button and comment so that the algorithm can reach more people. If you're not a subscriber yet, make sure to subscribe to our channel so that we can update you with the trends and issues that are going on in California. Now let's go back to the interview. In the US, we build 1.5 million homes per year, roughly around that area, that number. This is only 16,000 homes. It's a very small fraction. How could it have a big impact on the cost of construction? Well, but we're not talking about a United States market. We're talking about a very small regional market to go back to, you know, so we've lost what, 15,000, 16,000 homes here, right? I don't know what the run rate was prior to that, but I can tell you going back to Santa Rosa, they lost 6,500 homes. And their annual run rate prior to that was 65 homes a year. So you're looking at hundreds of years of construction. So because of that, now you're importing a lot of out-of-state or out-of-the-region contractors. There's a cost of mobilizing to that new community. There's, you know, a need to make more profit because of that. It's hard. There's not enough resources in situ to face these type of tragedies. This is wholesale destruction. I mean, I think we are calling more resources to Los Angeles. I think that's the largest call on resources in the country basically since World War II. These are massive things. And by the way, going back to costs, 30, what, 35% take a guess of your end costs are due to bureaucracy and permits and taxes and all the rest of that. If you wanted to make some, help some people out, there's a very quick government policy called, let's stop feeing you to death, right? And that would solve a lot of these issues. There's an interesting stat I read the other day. In Southern California, particularly Los Angeles, there's, in terms of contractors that were building homes, so most of the contractors, not most, but a large majority of them do not have a contractor's license compared to the rest of the nation. So we technically don't have enough licensed contractors in Southern California to rebuild these homes. And that did not matter before because most people can sign an owner declaration form and pay with their own funds. But when it comes to like insurance proceeds and getting distributions and whatnot, I believe you need a contractor's license, right? You need to work with the actual licensed contractor. If they give you the proceeds directly, it's your choice. But if it's- If it, but if it's on distribution- If the insurance holds onto it- And there's a mortgage- There's a mortgage, and yes, they're gonna demand that you have some- That's huge. We, most of the contractors in Southern California are not licensed. So there's a limited number of licensed ones, and they won't, the insurance would not be working with them directly. It's also a skill issue. There, yeah, absolutely. Not many people are skilled to be able to go build. I mean, you can go, you can have two contractors that have the same exact product to go build. One guy's gonna get it through the permitting phase. The other person's gonna get stuck. Or they're not gonna know what to do. They're not gonna know all the different loopholes, everything that they need to do, right? So I think it's like awareness of what someone needs to go find as far as like finding a contractor who knows what they're doing, finding somebody who knows how to build so that it's resilient for the next time, right? And I think these are all like interesting things that I think he's right. I don't think we've, I don't think any city has ever seen this happen before, especially in America, at least, to this scale of devastation. They don't. Think about, let's say, you're a homeowner who lost your home. You need to hire a surveyor, an architect, an engineer, a permit expediter, soils engineer, possibly, a general contractor. Most people don't know that they could go and hire one firm that will handle all that. But if someone's thinking, soil engineer, all these different trades, you're freaking out. You don't know what to do here. So, I mean, it's just, I don't see how the organization is there to get this past the finish line anytime soon. So, do you think a lot of out-of-state companies will come here? I think that, you know, I think the contractor load is actually not gonna be as much as we think it's going to be. So, initially, when I was getting all these phone calls, like, until today, I get at least two calls a day on inquiries from Altadena. Mostly Altadena, not so much the Palisades. But I thought we were gonna have a lot of homes at once. But the rate that they're processing permits, it's just, like, we submit, they told us initially it was 60 days to get a permit. My first submittal got their corrections 73 days after it was submitted. Just your first set of corrections. Which means that the permit will take, how long do you think it will take? So, we're about to get our first permit this week. We're, I think, almost six months, five and a half months into it. And that was a, like, they're adding 10% to their house. So, you think the permitting process, but by what you're seeing right now, it's going a lot longer than what it was last. And that's why I think this is gonna take a lot longer than most people think it's gonna take to build. And that's gonna, that's really just gonna dishearten people, which I think is gonna make them wanna sell. What about you, Ken? How's the permitting going in Palisades? It's the same. I mean, Gary's right. We've achieved three permits so far. We probably have 60 or 70 clients moving ahead. But we're on the very, very front end of permits. LADBS has managed to acculturate a climate of no. Their answer to everything historically is no. Go away, come back and try again. And that's not gonna get you anywhere going forward in this circumstance. You need a culture of problem solving. And you're basically gonna ask the same people who have said no for years, as a policy and as a profession, to turn on a dime and solve problems. I don't see that it's gonna happen. And it's not happening yet. So there, but there will be a point where the dam breaks and everybody rushes forward to do something. And at that point, you know, it goes back to our conversation of how many contractors are available, how many materials are available. One of my clients said, the only way I'm gonna make money out of, or I'm gonna get whole out of this situation is if I go buy a lumber yard and just sit on it for two years and then charge people 100% markup. And he was right. It's interesting, you're talking about building and safety. And once you get past that, you haven't even gone to utilities yet. Right. Nowadays, you finish a house in the city of Los Angeles with building and safety, you get your power release to come and connect the power and have permanent power on your home. It takes, after you pass your final inspection, it takes them two and a half to three months to come and connect the power. So your home is juiced and you can actually live in it. So how long do you think it would take for people that are getting permits to be able to build a fully ready to move in structure? So we could put up the new construction homes in eight months. But, I mean, how quickly the utility services, the utility companies are gonna move to actually establish, you know, if we, so you need fire sprinklers now, on the interiors of the home. Most of these homes did not have fire sprinklers. To have a fire sprinkler system in your home, you need to have at least a one inch utility service line for the water coming into your property. Most homes are three quarter. That process in the city of LA right now, without fire, just for a new home that you buy, takes three to four months to do. And you can't pass your rough inspection without that. So it's just, there's too many moving parts. And there's no organization in building and safety. There's no organization in Department of Water and Power. And that's just city of LA. Once you go to Altadena and you're dealing with the county, you, first off, it's all third party now, the plan checkers. I got an email, I sent a follow up email two weeks ago on a project we submitted. I got an automatic response saying the plan checker is on vacation for three weeks. So how's this gonna move forward? So you don't see a prioritizing, you don't see a fast pace. I see chaos. We submitted a set of plans. Two weeks later, we got an email asking if, she said, your plans are incomplete. They were missing our engineering set, supposedly. But there's something called Epic LA where you log in to actually check and see what documents have been submitted. I logged in, everything was submitted, it was fine. And then they called us a few days later. They said that we, as third party plan checkers, cannot access your system to double check and see if you've submitted your documents. Only the county can. So they're not even giving them full transparency to be able to access these documents if they don't have it on their table. So the people that are supposed to check your plans, they cannot, they don't have access to check. The county does not have that transparency with them to tell them, hey, you can go on the system at any time and check what document the developer or contractor submitted. What about on that side, on Palisades? You're dealing with the city of LA. Do you guys see issues with this permitting process? We see nothing but bureaucracy. I'll give you, this was not in the Palisades, but it's a home that I'm doing personally. We submitted plans, fully engineered, fully architected, everything good. And they came back and said, you need a water bib in the backyard, a water spigot. That has nothing to do with the structure of the building, its safety, the solar, the fire sprinklers. It was three and a half months to get the water bib designed to send back to them, and we're still waiting for a response. Four months gone. Now, back to your point, four months, you're still living in an Airbnb, you're still spending money that you don't have, your financial circumstance is getting worse each month over a water bib. You've got to solve problems at this point. You can't be bureaucratizing a water bib or a Simpsons strong tie or something like that. You've got to go out and actually help people get into their homes. We deal with individual couples and families every single day, one-on-one, helping them solve their particular problem. You have a site issue, you have a legal issue, you have something you have to get done, we address it. That's what our business is. The building is the relatively easy part. We can get that done in nine months. It's the dealing with the people and solving all the problems. That takes a lot of time and energy. The private sector is motivated to do that. The public sector just sits on their hands and goes, that's the law. Well, there are no consequences, there's a difference. Exactly, no accountability. You know, their response is, they were introducing the self-certification so that basically an architect can do that. Yeah, but I don't know one architect, engineer, or contractor that's going to take on the liability of stamping a set of plans, building with no inspections, and just saying, hey, if I built one inch off and this client's gonna come sue me for a million dollars in five years, God forbid something happens, no one's gonna take it on. It just doesn't make sense for any engineer, architect, or contractor to take that upon themselves. As you remember, we've covered an alleged scheme in Arcadia City Council, where the Chinese Communist Party members were trying to get people elected. There was a recent case in San Diego, a couple of military members that got indicted because of sending information to China. An FBI is warning that every 10 hours, they have one new case of counterintelligence against China-related activities opened. But it's not just the counterintelligence attacks. Businesses in California have been impacted significantly. Billions of dollars have been lost because of IP theft. That's why we've decided to inform Californians in depth about what's going on. And we are inviting Joshua Phillip, who's an award-winning journalist from Epoch Times, who has been investigating the Chinese Communist Party's activities across the US for the last two decades, to come on a live event in our studio in Irvine and also in San Diego. I had a lot of people threatening to kill me. I realized that if I don't cover it, nobody else was. One of the greatest threats our country faces would have gone unreported. I decided, yeah, I'm willing to die for this. And if they kill me, it'll make it better known. So we're hosting an event with Joshua on September 24th at 11.30 in San Diego. It's gonna be a lunch. We have a link below, you can RSVP. We're also gonna have another event in Orange County and Irvine in our studio on September 25th on Thursday at 5.30. And he will also do Q&A, so you can ask him a lot of questions about what he has seen. Most of the people that attended our last event were surprised by the stories about how the Chinese Communist Party is working here. We would love to see you here at these events. Now let's go back to the interview. Now, in terms of labor, there's another side of this that because of immigration issues, like there is a large number of people that are illegals that are in construction, right? Do you guys see a change in that? Because we've heard people don't show up to these job sites. Do you guys see a change? So a lot of undocumented workers that still have like worker's permits technically, so they can be working. But I mean, yeah, there's a job site on a street called Fletcher where we work. And it's an 80-unit apartment building they're building for the last two years. And every morning you would drive by and see like 50 trucks outside at like seven in the morning getting ready to start working. You see like five or six trucks out there. And then right now it's a little better, but in the heat of it, when it was ruined, there were all these ICE agents all over the place. No one was leaving their houses. You noticed, you saw that with signups also. I mean, as far as like retention of clients, a lot of people refused. They, usually we'd invite them to the office so we can meet, we can talk, really get the story. But a lot of them refused. They demanded that we come to their house, which we don't mind doing, but it's just like when you really understand why they were so scared to leave. And a lot of them are even afraid to move their cases forward because they're so worried about what could potentially happen. Is it going to be a, am I going to get arrested? Am I, if I have to show up to court or if I have to take my deposition, or if I go to mediation, are ICE agents going to come? But you have to reassure them that's not going to happen, but it's definitely had an impact for sure. They didn't want to go to the supermarket to buy food. I mean, it's. There were services that were doing like deliveries, grocery deliveries. Right, yeah. Do you think the cost of labor will go up a lot for this? Absolutely. There's a huge difference between, you know, these undocumented workers working and doing stucco jobs or going and hiring, let's say, a stucco firm, like a large stucco corporation that has hundreds of employees and workman's comp and insurance and everything, which you should have anyway, but you know, it gets a lot more expensive. If your plumber doesn't show up, the rest of the job backs up. And it has a cascading effect because now the plumber's out four weeks and that blew the electrician's budget, or timeframe, and he's on another job. So the electrician can't come back to follow up for another six weeks. So you didn't just have a one or two week delay, you had a three month delay. Again, going back to mounting costs and time and frustration and a second round of trauma for people that they just can't get it done. Hopelessness. That's what you're seeing a lot of. A lot of hopelessness from people. You guys are in the field. You're seeing the people that are devastated by the fires and a lot of them wanna come back and a number of them might be selling. How can this get better? How can this process get improved so? So I think in terms of, let's say the permitting stage. So you start with the survey, you get to the architectural stage, your architectural plans are complete, you submit it to engineering to get it engineered and then you get a complete set together, you submit it to the city. The city never really, for the most part, the city's not giving corrections on the engineering. The engineer is putting his stamp in the plan checkers, saying that this is a licensed engineer, he can, we trust what he has to say. If that's the case, why don't we cut out the six weeks it takes for the engineer to engineer an architectural set of plans. Let's get the architectural approved and let's start building as long as they have a licensed engineer on file. That takes a month and a half off. That takes so many reviews and plan check time to go through these corrections or just review process of an engineering set. And I think that shaves off at least two months off the project. I mean, that's one way to go about it. At the planning level, the second is, they need more plan checkers. And I don't think they could be third-party plan checkers, I think they should be on-site plan checkers. That's what they were talking about doing when the fire just happened. Like they have the disaster relief office in Altadena. If they open five of those and just put plan checkers out there and people just come in and wait in line for as long as they have to and just start reviewing plans on-site, I think things can get processed a lot quicker. Ken, do you have any thoughts? Well, I wish I had a silver bullet to help people because they clearly need help. The issue is complexity, right? And at each point in that complexity, if you can ease the burden, you'll get a better result. But this is extremely complex stuff. As Gary was saying earlier, you've got to go through myriad steps, get myriad professionals into this. At a certain point, I do think for certified architects, certified engineers, there could be a policy whereby they're immunized from any liability. They basically take on the liability to say that, or they take on the responsibility to say that these plans do exceed code and the city gets out of the business of saying that they exceed code. And that then takes the plan checkers out of it to a good degree. By the way, your plans that you submit to the city are probably being reviewed in Illinois or Nebraska or Florida where they're not doing a great deal of building these days. So the plan checker is not even in your community. So why are we insisting on that being done? As long as you are an experienced, licensed, bonded architecture engineer, we should be able to build. You go back to the Altadena houses you mentioned, 50, 70, 100 years old, they didn't go through any of this bureaucracy. They were built by responsible human beings for good clients, and it worked. Well, until it didn't, right? So we could go back to a model that's in that direction. As Gary said, the building is a relatively discrete part of this overall package. You gotta get rid of the stuff that's not building. So the building is not as hard as the rest of the process, getting the permitting and then getting the utilities set up. But also there's the homeowners. We have a handful of homeowners that are having just a really hard time making decisions. Some want exactly what they had like we have this 80-year-old couple. They have been in the home for 40 years, 40, 50 years. We wanted, for code, we had to make the hallway a little bit wider, and he felt uncomfortable with that change. He wanted exactly what he had. And then we have some other homeowners who just like they want something completely different, and that process of making up their mind is a little harder, so that takes time. But there just has to be a lot more hand-holding with the clients and the city level. There just has to be less bureaucracy. It's actually interesting. I think when you talk about somebody who wants to rebuild exactly what they had, because so many of our cases are, they seek professional help, right? They go see a psychologist to talk about what they lost and all that. Some generally have legitimate issues. It's interesting you mentioned that somebody wants to rebuild exactly what they had, and you kind of see that pattern in so many of these cases. When we read the reports where it's like, they terribly frightened of change, especially when you're older, you're just terribly frightened of change. So you see even a small change as far as like a hallway, which is insignificant, but you just don't, even to that level, psychologically, you don't want to accept the change, which is in line with everything that we read about as far as like how much it's hurt people, especially people who are a little bit older and they're going through this. Before we move on to the rest of this interview, let's take a look at some key headlines in our newspaper, Epoch Times, this week. What's happening right now in California, the state is changing its policies toward oil and gas. There was a meeting a week ago in the legislature and the governor has asked the legislature and California Energy Commission to come up with rules and change their policies toward oil and gas so more refineries can stay in California. There's a new poll in California with gubernatorial race. Everybody was wondering, who's going to take Kamala Harris's votes? Now this poll is showing that Katie Porter has gotten about 21% support and Chad Bianco, who's a Republican, is the second in place with 15% of the voters. We're going to be watching the gubernatorial race here in Epoch Times and California Insider. LA just busted a multimillion dollar ring of cargo theft and cargo theft nationally is up 27% in 2024 compared to 2023. Some people have complained to us about the issues in LA with burglaries. LAPD just busted a group of burglary suspects that had hit 92 homes and it looks like LAPD is now going after these rings. This is just a handful of interesting stories from our California section. We have many other stories that cover national issues, international issues, China issues and we have other sections like mind and body health. They have amazing stories. Make sure to check out our newspaper. You can click on the link below. You will get a deal, $1 a week for the first four weeks and tell us what you think of the Epoch Times newspaper. Now, do you have any advice for people that are in these communities? There is lawsuits right now with city of LA. Some people are suing from Palisades to city of LA. Some people are suing the utility companies. Is there going to be any results from that? Do you have any advice? So the lawsuits against, with the lawsuits in Eaton against SoCal Edison, you have, it's a unique situation because of what they call a wildfire fund. The wildfire fund was created and essentially every rate payer and every utility owner would have to pay if they were paying into that, right? So they, every rate payer paid a certain amount and the utility owner paid a certain amount into that. That fund has something close to 15 billion in it. By the time this is done, I think it'll have something close to 21 billion. Edison itself is an extremely capable entity to pay in the event that they needed to, but they're essentially backstopped by the money in this fund. So you have clients who suffered extreme loss. Maybe they're uninsured or underinsured. They're going to be able to seek recovery through the funds that are held in that fund, right? So it's going to give them some opportunity to have relief financially, especially for what they went through because insurance is not, your own personal homeowner's insurance, if even if you were perfectly insured is going to cover for the loss of the asset. It's not going to cover for the loss, the emotional distress you suffered. It's not going to, it's not, it's not designed for that. And how long does that take, do you think, for these two, for people to see any dollars? So the two-year statute of limitations on the psych and bodily injury component of this expires next year. So I think at that point, you'll start seeing these cases move towards resolution. It could take multiple rounds of mediations or discussions in order to get some of these resolved, especially the more high value ones. The wrongful death cases are going to be a lot more challenging to resolve. I don't know how those are going to play out yet, but I assume sometime closer to the end of next year, the following year, you're going to start seeing resolutions start trickling in. And is this going to be individual cases? Each person will have their case versus? So I think you'll have global resolution of cases depending on the tier that they're in. The higher tiered cases, the ones that have more catastrophic loss, the ones that have a wrongful death component to it or burn component to it or significant bodily injury component to it. You can't do those as a combined case for a lot of reasons, but also because that person's losses are very individual to that individual. They're very specific to that individual. You can't- Now in terms of, I know you're not involved in Palisades, but in terms of those lawsuits with the city of LA, are they as promising as the ones that they're in? I never really researched that. A lot of my friends are involved in that. I wouldn't be able to tell you for sure what I think the outcome of that's going to be. I don't know. I know a lot of them have the bad faith cases against their insurance companies because they underpaid or because they didn't pay them what they had insurance for. And that's a little bit different, but as far as how the lawsuits shake out against the city, I'm not so sure. And do you recommend people to come to the law firms to see what- I think it's, if you've suffered some type of loss that the insurance is not going to cover you for, how else do you seek recovery? Like, how do you do it? And I think it's harder than just filing a lawsuit. There's a lot that goes into it. Understanding damages in fire cases are unique. Understanding the damages in order to truly get what you deserve out of it, that is a unique type of case. And I think to navigate that absent having legal representation, it is probably very, very difficult, I could imagine. So I mean, if you've suffered that type of harm, seeking the advice of a lawyer probably makes sense, but everyone's different. Some people don't want to be involved in that. Like, I respect that. And some people just don't want anything to do with this at all. We have clients who call sometimes like, you know what? I just, I don't even want to be part of it anymore. I just don't. It's too much stress on me. It's too much stress on my family. I can't think about it every day, you know? And it's hard to say. It's hard to say. I think it's case by case, individual by individual. Now, Gary, in terms of rebuilding, what do you recommend to people? There's so much detail we can go into about this, but surface level, there's two main recommendations I would give. One, if you're dealing with a contractor, a company, whatever it is, deal with a design build firm that is going to take on the whole process themselves. So you're not out looking for engineers and architects and surveyors. And very importantly, somebody who has some of these services in-house because waiting for a survey company to come in and do something could take months. Like, for example, we could get a survey done two weeks after you sign up with us. So I tell people this all the time. If you're not working with us, fine. Just work with a design build firm. Do not go and try to break down the architect, the engineer, and everything yourself because that mechanism, when it's played together and there's, you know, these people have worked together before, a design build firm with all these trades, it's just a lot more efficient. And the second, I always tell our clients, work with an attorney that's actually going to represent you on the claim because these insurance companies, the way they want these estimates written to actually pay out full amounts, it's not that simple and not all contractors can do it. So these attorneys really get more from the companies to help the clients. Excellent. Ken, do you have any recommendations for people? Well, despite all the negative conversation we've had here today, I'm actually very hopeful for these people in these communities. People are very smart. They understand what's happened to them. And they also understand the ongoing risks that they face in California from wildfire and seismic. And they're problem solvers themselves. I would say that probably 75, 80% of our clients come to us already having made the decision that they want to build resilient going forward. And you've got to choose your path in here. Rebuilding is hard. Really thinking about the future that you want and being committed to this is hard also. But you've got to choose your hard path, right? None of this is easy. If you can actually make a positive choice about how you're going to commit your life and your family going forward for the next decades, there's a moment that we see all the time where people have made the decision, it's clicked, they're committed, they're staying, they're going to rebuild. And at that point, there's a relief that comes to it. We've got a path, we've got a plan, we've got our professionals. I don't care how we do this, we're going to do it. And that's really the thing. Look, these tragedies prevent wholesale opportunity for people to change their lives, right? If you lost your job tomorrow, you'd sit back and go, okay, what do I really want to do? It's the same thing when you've lost your house. How do I really want to live? This is your opportunity to get what you want for your children and your grandchildren and yourself. So do your research, find your good professionals, commit, and God willing, it's all going to work out. It's going to be hard, but we're going to get there. Now we come to you, Californians. What do you think of the situation in LA? Do you think people are going to rebuild or do you think a lot of these lots will get sold? And do you have any thoughts or recommendations how LA can expedite the process? Make sure to email us at ciamac at californiansutter.com or comment. We read all of your emails and comments. I'm Ciamak Korami, this is Californian Insider, and we'll see you next time.