The Brief

The fight over how much new housing should be allowed in neighborhoods rebuilding from the Palisades and Eaton fires is headed to court.

Advocates for increased housing construction filed a lawsuit Wednesday against Gov. Gavin Newsom and Los Angeles-area politicians over their orders banning duplexes in burn zones.

The group YIMBY Law alleges Newsom, L.A. Mayor Karen Bass and others acted illegally when they issued orders to suspend the state law SB 9 in certain neighborhoods now rebuilding from the Palisades and Eaton fires.

SB 9 allows single-family homeowners to split their lots and build duplexes, in some cases creating four units where one house previously stood.

In July, Newsom signed an order granting local governments the ability to block the law in high fire risk zones. Bass quickly took up the offer, banning SB 9 projects in the Pacific Palisades.

Other local governments, including the city of Pasadena, Malibu and L.A. County followed suit.

The lawsuit seeks an injunction ordering local governments to begin processing SB 9 applications again, as well as a declaration that Newsom’s order was illegal.

YIMBYs say bans raise barriers to rebuilding 

YIMBY Law Executive Director Sonja Trauss said the bans will make rebuilding harder for some families. She said some may only be able to return by selling pieces of their land, pooling finances with family members to live multi-generationally, or earning extra income from new rental units.

“Making it harder for families to use the single most impactful tool they have left — their land — doesn’t make recovery safer,” Trauss said in a statement. “It raises the barrier of who gets to come back at all.”

Newsom spokesperson Tara Gallegos said in an email to LAist that the Governor's Office was holding firm on the order.

“We will not allow outside groups — even longstanding allies — to attack the Palisades, and communities in the highest fire risk areas throughout L.A. County, or undermine local flexibility to rebuild after the horror of these fires,” Gallegos said.

Newsom’s office had been in discussions with YIMBY Law earlier this week on possible changes to the order to stave off a lawsuit. But Gallegos said Newsom would not “negotiate away” protections for burn zones.

“Our obligation is to survivors, full stop,” Gallegos said. “If defending them requires drawing firm lines, we will draw them."

The lawsuit alleges Newsom’s order violated the California Emergency Services Act, as well as the state Constitution’s separation of powers by overriding the legislature’s decision to apply SB 9 in high-fire-risk zones.

Because the governor’s order was illegal, the lawsuit claims, the local orders banning SB 9 projects in specific neighborhoods were also unlawful.

The complaint says the moves to ban duplexes and lot splits were spurred by “the lobbying influence of a small, highly-connected, wealthy community, and their ability to stop a type of housing they dislike, even in the midst of a generational housing crisis.”

What led to the bans

Some Pacific Palisades residents erupted with anger over news in the summer that seven SB 9 project applications had been filed with the city of L.A. They contended that increased housing density would harm the neighborhood’s character, and would clog evacuations in future emergencies.

L.A. City Councilmember Traci Park, who represents the Palisades, blamed the situation on “opportunistic developers” whom she said were using SB 9 to “exploit a devastating disaster for their economic advantage.”

But as the complaint from YIMBY Law notes, SB 9 contains owner-occupancy requirements that bar outside developers from building the densest projects allowed under the law. Applicants must state that they intend to live on the site for at least three years before they can split a lot.

Bass’s office did not comment on the lawsuit, but provided a statement that said she “will continue to work with Governor Newsom and state leaders to advocate for the Palisades community as rebuilding continues."

Officials with the city of Pasadena, which enacted a ban on SB 9 projects in high fire risk zones in September, declined to comment on pending litigation. Officials in the city of Malibu, which was also named as a defendant in the lawsuit, did not respond to requests for comment.

How did L.A. County end up banning SB 9?

Soon after Newsom’s order, L.A. County Supervisor Kathryn Barger — who represents Altadena — told LAist she did not intend to ban SB 9 projects in unincorporated parts of the county. At the time, she said, “I don't want to disenfranchise anyone from the ability to rebuild.”

However, a memo on the county’s Planning Department website now says SB 9 projects located in the zones outlined in Newsom’s order are “not eligible” for faster approval under the state law. County officials confirmed that Planning Director Amy Bodek made the decision. They said the ban did not require a vote from the Board of Supervisors.

Most of Altadena is not categorized as a “very high” fire hazard severity zone. But about 23% of Altadena’s single-family lots are in high fire risk zones. County planning officials told LAist they have stopped processing SB 9 applications in those areas.

In a statement, Barger said. “The County is applying lawful SB 9 restrictions in Very High Fire Hazard Areas to prioritize public safety in areas where critical infrastructure is constrained or limited — which I support. But I also believe SB 9 empowers Eaton Fire survivors to rebuild homes that meet multigenerational needs and add lasting value to their communities.”

A year after the deadly Los Angeles County fires, California’s property insurance market remains problematic; survivors are suing insurers over delayed or denied claims; and most of the state’s policyholders are likely to see their premiums rise.

Seven in 10 L.A. fire survivors have yet to return home, some in part because of insurance claim delays, according to a new survey released this week by Department of Angels, a nonprofit group that was formed after the fires.

The survey also found that 4 in 10 insurance policyholders have experienced insurability issues, such as huge premium increases and dropped coverage, although state law mandates a one-year moratorium on insurers canceling or not renewing customers’ policies after the governor declares a state of emergency. Those with homes that did not burn down but are still standing are especially likely to have seen big increases in their premiums, according to the survey of 2,443 adults from Nov. 18 to Dec. 2, 2025.

Insurance premiums for everyone, not just fire survivors, were already expected to rise under new rules by Insurance Commissioner Ricardo Lara. The commissioner, under pressure to improve availability of insurance in the state, last January implemented a plan that aims for quicker rate reviews and allows insurers to use catastrophe modeling and reinsurance costs in setting their rates. The plan took effect just days before the L.A. fires.

Now the response to the fires could also lead to even higher insurance premiums across the board, said Amy Bach, executive director of consumer advocacy group United Policyholders.

“I advocate for disaster survivors, but also for the entire community of policyholders,” Bach said. “For every ‘Eliminate the List’ bill, for every improvement we make to prevent post-disaster trauma around under-insurance, there’s a cost.” She said such actions will have ramifications for both insurance affordability and availability.

“Eliminate the List,” which Gov. Gavin Newsom signed into law last year, requires insurance companies to pay 60% of personal property coverage limits, up to $350,000, to policyholders who experience a total loss without requiring them to submit a detailed inventory for at least 100 days.

Still, Bach knows that such mandates are necessary to improve survivors’ experiences after a fire, and lawmakers are introducing new bills to address their concerns. Her own group released a survey in November, reporting policyholder complaints that included insurer communication delays, claims payment delays and being assigned multiple claims adjusters.

The Department of Angels survey found that customers of State Farm and the last-resort FAIR Plan — the two largest insurers in California — were the most dissatisfied with their insurers’ response. California’s insurance department is investigating State Farm’s response to the fires, and has taken legal action against the FAIR Plan over its response as well, especially to smoke-damage claims. Those insurers, along with other companies, are also facing policyholder lawsuits.

“Our customer feedback reflects a different experience than what is being reported,” said Tom Hartmann, a State Farm spokesperson, in an email. “We’re supporting more than 13,500 customers affected by the wildfires, more than any other carrier, and have already paid over $5 billion to help them recover.”

Sam Strgacich, left, and his wife Rossana Valverde, right, examine soot damage at their home in Pasadena on April 26, 2025.

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Joel Angel Juarez

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CalMatters

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“We’ve paid almost $200,000 out of pocket to repair our home because of the FAIR Plan’s blanket denials of our remediation,” said Angela Giacchetti, a spokesperson for the Department of Angels who worked on the survey. She’s also a fire survivor whose Altadena home did not burn down but was badly damaged.

“While we are unable to comment on individual policyholders' claims, the California FAIR Plan does not direct where policyholders reside,” said Hilary McLean, a spokesperson for the plan. “The FAIR Plan evaluates every claim on its own merits and pays all covered claims up to the individual policy limits.”

The FAIR Plan said in a press release this week that it has handled about 5,400 claims and paid almost $3.5 billion to policyholders. It also said it “has taken steps to enhance its ability to serve policyholders” by securing a line of credit and reinsurance, helped by a $750 million catastrophe bond made possible by a new law allowing the FAIR Plan to get bond financing through the California Infrastructure and Economic Development Bank.

The American Property Casualty Insurance Association says insurance companies have paid $22.4 billion of the expected $40 billion in total claims from the L.A. fires.

The Department of Angels survey also found 79% of survivors are facing financial hardships, with more Black, Asian and Latino survivors falling behind on their rent or mortgage payments. In addition, 40% of those surveyed said they were very dissatisfied with the local, state and federal response to their needs.

Newsom said Tuesday that he is working with state lawmakers, the banking industry and others on new loans for rebuilding, and that the state will expand eligibility for the CalAssist Mortgage Fund. The governor’s office did not respond to CalMatters’ questions about whether he plans to propose any aid for renters who survived the fires, and about what else he is doing to continue to press the federal government for long-term disaster funding.

“This report says exactly what we’ve been hearing,” said Michael Soller, spokesperson for the insurance department. “Wildfire survivors want action and they want results.” He said the issues in the survey are top priorities for the department, and among other things pointed to a task force on smoke damage that the department has convened.

A bill sponsored by Lara and introduced by newly appointed Senate Insurance Committee Chair Steve Padilla, the Democrat from San Diego, late Tuesday would require insurance companies to submit to the state their disaster-recovery plans related to handling claims; double penalties for violations of fair claims practices during an emergency; expand upfront claims payments; give policyholders status updates within five days whenever their adjuster is replaced; and more.

This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.

By the end of January, students will have returned to two of the three public school campuses burned in the Palisades Fire one year prior, though their classrooms are temporary.

Palisades Charter High School students are scheduled to return to their campus Jan. 27. They’ve been in a refurbished Santa Monica department store since April.

“ I am just overwhelmed with gratitude for the constant support that has been shown for our school and for our families, our teachers, all of our administrators and staff,” said Principal Pamela Magee at a press conference Tuesday with Los Angeles Unified leaders. Pali High is an independent charter high school located on district property.

In June, the LAUSD Board approved a $604 million plan to rebuild the high school, as well as two burned district elementary schools— Marquez and Palisades.

Superintendent Alberto Carvalho said the three campuses’ new buildings will open in 2028— shaving two years off of the original 5-year timeline.

“ These projects will come in on time or ahead of schedule,” Carvalho said. “These projects will come in at or below budget, and these projects will honor the resilience, the determination, the courage and yes, the suffering and the sacrifice of the community of the Palisades.”

About the costs and the design

The district plans to use money from the $9 billion bond voters approved in 2024 to help pay for the rebuild, but also anticipates some reimbursement from its insurer and FEMA.

District-contracted architects are finalizing their designs and plan to submit to the state for approval in the spring, said Chief Facilities Executive Krisztina Tokes. She said the plan is to rebuild with future environmental risks in mind.

“ From the earliest design stages, wildfire resiliency has been treated as a core requirement and not an add-on,” Tokes said. For example, using fire-resistant concrete blocks, installing enhanced air filtration systems and planting shade trees where they won’t hang over buildings.

Environmental testing preceded students’ return to the fire-impacted campuses. Director of the Office of Environmental Health and Safety Carlos Torres said the district continues to monitor air quality through its network of sensors and is developing a plan for periodic testing.

“We just can't just walk away,” Torres said.

Enrollment is down at all three schools compared to before the fires, but district leaders say they are confident families will return to the rebuilt campuses.

“I find it hard to believe that this community won't come back to its former glory,” said Board Member Nick Melvoin, who represents the Palisades. “We gave a lot of thought in an accelerated timeline to rebuilding for the next century.”

Marquez Charter Elementary

What’s the damage? The campus is a “total loss.” More than three dozen classrooms, administration buildings, the school’s auditorium and playground burned down.

How much has LAUSD budgeted to rebuild? $202.6 million

Where are the students? Students returned in September to portables covering about one-third of the campus. There’s also two playgrounds, a garden, library and shaded lunch area. Enrollment has dropped 60% compared to before the fire from 310 to 127 students.

What’s next? District-contracted architects are finalizing their designs and plan to submit to the state for approval in the spring.

Palisades Charter Elementary School teacher Ms. Davison talks with her students in their new classroom on the campus of Brentwood Elementary Science Magnet last year.

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Brian van der Brug

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Los Angeles Times via Getty Images

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Palisades Charter Elementary

What’s the damage? About 70% of the campus was destroyed including 17 classrooms, the multipurpose room and play equipment.

How much has LAUSD budgeted to rebuild? $135 million

Where are the students? Students continue to share a campus with Brentwood Science Magnet. Enrollment has dropped 25% compared to before the fire from 410 to 307 students.

What’s next? District-contracted architects are finalizing their designs and plan to submit to the state for approval in the spring.

Palisades Charter High School, pictured in December 2025, is scheduled to reopen to students Jan. 27, 2026.

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Kayla Bartkowski

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Los Angeles Times via Getty Images

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Palisades Charter High School

What’s the damage? About 30% of the campus was destroyed including 21 classrooms, storage facilities and the track and field.

How much has LAUSD budgeted to rebuild? $266 million

Where are the students? Students started the school year in a renovated Sears building in downtown Santa Monica. Enrollment has dropped 14% compared to before the fire, from 2,900 to 2,500 students.

What’s next? Classes will resume at the main campus Tues. Jan. 27 in a combination of surviving buildings and 30 new portable classrooms.

The Trump administration says it’s planning to freeze about $10 billion in federal support for needy families in California and four other Democrat-run states, as the president announced an investigation into unspecified fraud in California.

The plans come on the heels of the Trump administration announcing a freeze on all federal payments for child care in Minnesota, citing fraud allegations against daycare centers in the state.

The state’s Democrat governor, Tim Walz — who ran for vice president against Donald Trump’s ticket in 2024 — announced Monday he was dropping out of running for reelection. He pointed to fraud against the state, saying it’s a real issue while alleging Trump and his allies were “seeking to take advantage of the crisis.”

On Monday, the New York Post reported that the administration was expanding the funding freeze to include California and three other Democrat-led states, in addition to Minnesota. Unnamed federal officials cited “concerns that the benefits were fraudulently funneled to non-citizens,” The Post reported.

Early Tuesday, President Trump alleged that corruption in California is worse than Minnesota and announced an investigation.

“California, under Governor Gavin Newscum, is more corrupt than Minnesota, if that’s possible??? The Fraud Investigation of California has begun. Thank you for your attention to this matter! PRESIDENT DONALD J. TRUMP,” the president wrote on his social media platform Truth Social.

He did not specify what alleged fraud was being examined in the Golden State.

LAist has reached out to the White House to ask what the president’s fraud concerns are in California and to request an interview with the president.

“For too long, Democrat-led states and governors have been complicit in allowing massive amounts of fraud to occur under their watch,” said an emailed statement from Andrew Nixon, a spokesperson for U.S. Department of Health and Human Services, which administers the federal childcare funds.

“Under the Trump administration, we are ensuring that federal taxpayer dollars are being used for legitimate purposes. We will ensure these states are following the law and protecting hard-earned taxpayer money.”

Gov. Gavin Newsom’s press office disputed Trump’s claim on social media, arguing that since taking office, the governor has blocked $125 billion in fraud and arrested “criminal parasites leaching off of taxpayers.”

Criminal fraud cases in CA appear to be rare for this program

Defrauding federally funded programs is a crime — and one LAist has investigated, leading to one of the largest such criminal cases in recent years against a California elected official, which surrounded meal funds.

When it comes to the federal childcare funds that are being frozen, the dollar amount of fraud alleged in criminal cases appears to be a tiny fraction of the overall program’s spending in California.

A search of thousands of news releases by all four federal prosecutor offices in California, going back more than a decade, found a total of one criminal case where the press releases referenced childcare benefits.

That case, brought in 2023, alleged four men stole $3.7 million in federal childcare benefits through fraudulent requests to a San Diego organization that distributed the funds. All four pleaded guilty, with one defendant sentenced to 27 months in prison and others sentenced to other terms, according to authorities.

It appears to be equivalent to one one-hundredth of 1% of all the childcare funding California has received over the past decade-plus covered by the prosecution press release search.

Potential impact on California families

The plans call for California, Minnesota, New York, Illinois and Colorado to lose about $7 billion in cash assistance for households with children, almost $2.4 billion to care for children of working parents, and about $870 million for social services grants that mostly benefit children at risk, according to unnamed federal officials speaking to the New York Times and New York Post.

In the largest category of funding, California receives $3.7 billion per year. The program is known as Temporary Assistance for Needy Families, or TANF.

 ”It's very clear that a freeze of those funds would be very damaging to the children, families, and providers of California,” said Stacy Lee, who oversees early childhood initiatives "at Children Now, an advocacy group for children in California.

 ”It is a significant portion of our funds and will impact families and children and providers across the whole state,” she added. “It would be devastating, in no uncertain terms.”

About 270,000 people are served by the TANF program in L.A. County — about 200,000 of whom are children, according to the county Department of Public Social Services.

“Any pause in funding for their cash benefits – which average $1000/month - would be devastating to these families,” said DPSS chief of staff Nick Ippolito.

Ippolito said the department has a robust fraud prevention and 170-person investigations team, and takes allegations “very seriously.”

It remains to be seen whether the funding freeze will end up in court. The state, as well as major cities and counties in California, has sued to ask judges to halt funding freezes or new requirements placed by the Trump administration. L.A. city officials say they’ve had success with that, including shielding more than $600 million in federal grant funding to the city last year.

A union representing California childcare workers said the funding freeze would harm low-income families.

“These threats need to be called out for what they are: direct threats on working families of all backgrounds who rely on access to quality, affordable child care in their communities to go to work every day supporting, and growing our economy,” said Max Arias, chairperson for the Child Care Providers United, which says it represents more than 70,000 child care workers across the state who care for kids in their homes.

“Funding freezes, even when intended to be temporary, will be devastating — resulting in families losing access to care and working parents facing the devastating choice of keeping their children safe or paying their bills.”

Federal officials planned to send letters to the affected states Monday about the planned funding pauses, the New York Post reported. As of 3 p.m. Tuesday, state officials said they haven’t gotten any official notification of the funding freeze plans.

“The California Department of Social Services administers child care programs that help working families afford safe, reliable care for their children — so parents can go to work, support their families, and contribute to their communities,” said a statement from California Department of Social Services spokesperson Jason Montiel.

“These funds are critical for working families across California. We take fraud seriously, and CDSS has received no information from the federal government indicating any freeze, pause, or suspension of federal child care funding.”

LAist Senior Reporter Elly Yu contributed to this report.