Malibu wanted to crack down on huge mansions. But fire losses could bring even bigger homes

Nine months ago, the Woolsey fire burned through Malibu, torching swaths of the scenic beach community in what would quickly become one of the most destructive wildfires in California history.

Since then, many have struggled to rebuild. Of the estimated 650 homes that burned inside Malibu city limits, a 21-mile sliver of shoreline hugging Pacific Coast Highway, just 113 replacement plans have been approved, and only 12 have received permits to start construction, according to records published by the city’s planning department.

Decades-long residents of Malibu still call themselves newcomers, and many are now predicting an exodus — one that has sparked a bitter fight over how to define “neighborhood character” in a city where whole neighborhoods were decimated.

“I think the number [who sell] could be as high as 30%,” said Malibu City Councilman Mikke Pierson, who was elected just three days before the blaze. “So many people are traumatized by the fire, a lot of people haven’t even started the rebuild.”

Pierson voted with the council majority in February when it directed the planning department to draft an “anti-mansionization” ordinance that would have set strict new limits on what residents could build. The move seemed in keeping with long-standing concern over the development of AirBnB-style rentals, rehab centers and palatial second homes.

But the response was outrage. Hundreds lined up to voice their fury in a six-hour planning commission meeting at which the ordinance was presented on July 1, and again at the City Council meeting on July 8, where the council ultimately voted to shelve it.

“They ignited a firestorm with this,” said Don Schmitz, a development consultant and longtime resident. “People felt attacked and betrayed at a time that they were most vulnerable.”

The ordinance would have capped building on the city’s largest lots at 8,500 square feet — “a total destruction of property values,” one resident seethed in a letter to the City Council — and the smallest at 1,885. Though such homes would seem princely to most Angelenos, Malibu’s existing maximum of 11,172 square feet is already a fraction of what buyers in the county’s other tony ZIP Codes can build.

“Consider those of us who lost our homes who are struggling to rebuild our lives,” pleaded Dr. Dana Graulich, who fought back tears as she addressed the commission. “Consider the devastating impact it will have on the value of our property.”

Fire victims would have been exempt from the new rule, officials said. But opponents argued the move would make their land less valuable — a fear many residents say is particularly acute now, as their neighbors abandon plans to rebuild and prepare to “sell the dirt” to buyers who could build far bigger in Beverly Hill or Bel-Air.

“It was interesting that they decided to do this when the rebuild hasn’t gotten off the ground,” said Lisa Lovaas, a lifelong Malibu resident who lost her home. “It’ll be a year before we even start.”

Like most fire victims who have filed rebuilding plans with the city, Lovaas intends to replace her burned-out three-bedroom ranch house with one much the same.

The overwhelming majority of plans the city has approved so far are similar “like-for-like” replacements or modest expansions of up to 10% that were fast-tracked for fire victims.

But reaching that process took months. Lovaas and her family have moved seven times since the fire. For the last two months, they’ve shared a 200-square-foot trailer powered by a single extension cord.

“It’ll be a treat to move into a home that’s 2,000 square feet,” Lovaas said on a recent weekday, watching from the glass door of her luxury Living Vehicle camper as Southern California Edison workers unearthed the cable she hoped would power their rebuild. “At that point we can sell the trailer and recoup a lot of our investment, because we were under-insured.”

Lovaas said most of her friends who lost their homes are facing a similar shortfall. For them, the “loss of use” allowance most insurers pay out for rent or mortgage expenses while a home is rebuilt has become a ticking clock.

“If they only have a year and a half of [loss of use] money to get back into a new home, they don’t want to spend a lot of time in the planning process,” said senior planner Richard Mollica. “We’ve seen people put back smaller homes because they could get that quickly.”

Others are filing “like-for-like” plans for homes they know they’ll never rebuild.

“We’ve had people who come in to get a planning verification from us so that when they sell, the entitlement runs with the property,” Mollica said.

Even proponents of the legislation seemed confused by the timing.

“I wonder how many of the fire rebuilds even are going over the limits,” said Scott Dietrich, who spoke in support of the ordinance. “Is it a big issue?”

The answer, so far, is few. But among those who have been closely involved in the recovery effort, there is a sense that bigger houses could be just over the horizon.

“Seventy percent of the homes on my street are gone and I know a handful of families that are not coming back,” said Tommy Stoilkovich, whose neighborhood was devastated by the fire. “The fear is that these poor unfortunates who cannot rebuild sell the dirt and developers max out the lot.”

Architects and real estate agents say they’ve seen early signs of that exodus, as those who once hoped to return confront the reality of what it would take to rebuild.

“I think people might get permits, but they’ll get a construction bid and they’ll say forget it,” said real estate agent Russell Grether. “There are some people, they have regular jobs, they have kids, they’re not around to do a full-time redevelopment gig.”

Architect Lester Tobias, who lost his home in the fire and opposed the ordinance, agreed.

“I don’t see it coming on the market yet, but we sense that’s about to happen,” he said.

Unlike fire victims, who face enormous financial pressure to replace their homes quickly, new buyers may have time to wait for a larger project to move through the city’s planning department and the state Coastal Commission. Those who supported the ordinance said they feared more 10,000-square-foot mansions could crowd their once-rural home.

But like fire victims who spoke at the hearing, Lovaas said she opposed measures that might limit her family’s options for the future.

“Honestly, we have another year and a half, maybe more of hanging out and waiting,” despite rebuilding her home within the 10% cap allowed under the expedited permitting process, Lovaas said. “It’s expensive to wait.”