So the homeowners in the LA fires covered under the FAIR plan may be in trouble because the program is insolvent and simply doesn't have enough money to cover the costs. To make ends meet, they're going to have to either raise taxes, get help from the federal government, or pass on the costs to somewhere else - either way, it's going to come from the taxpayer.
There's already been criticism from some circles (both left and right) about the fairness of this - using public funds to subsidize privately owned assets - but given the situation homeowners are not likely to turn down the money. (I mean, why would they, really?)
If you live in California, you may have heard of Prop 13, which is a tax loophole in the system that allows homeowners to freeze their tax rates at the point of the purchase of their homes, which has allowed many of them to pay taxes at much lower rates than what their home is currently valued. I mean, it's free money, why would they say no?
But the tragic part is that money was supposed to go to things like infrastructure, schools, and other public services that would have most likely prevented the catastrophic outcomes we saw in last weeks fires. They expanded Prop 13 to include commercial properties, too, which corporations have exploited to basically not pay any taxes on their land owned - which is why even prior to the fire, you would see empty lots sitting everywhere doing nothing, because it would often be more profitable to just let the land appreciate in value rather than doing anything with it...the incentive to do real businesses just wasn't there for many.
So not surprisingly, they have extended the loophole again - it's understandable since this is an emergency situation, but the concern for a lot of people is what comes afterwards -- if there is no incentive for people to build, it could make the rebuilding efforts so painful and slow that the desire to live in the city simply evaporates with this generation.
If the city bands together and aggressively rebuilds, it could spark the process of urban renewal and potentially be the beginning of a renaissance era. But in order to achieve that, they will need the help of newcomers and outsiders because it's impossible for the state to do it with what they have now.
Is California going to have a change of heart and accept newcomers as one of their own - or are they going to keep on digging into the NIMBY mindset that got us here to begin with? Time will tell. 👀