It’s Official: Parts of California Are Too Wildfire-Prone To Insure

Yves here. We’ve had quite the run of California stories, but this particular one is of the type where California is playing one of its prototypical roles of leading the rest of the US. Expect climate-change-induced inability to buy private sector home insurance to become more common. If governments don’t step in, that kills mortgages, so what comes next? Only all cash buys? Seller financing? And if property values in these areas decline, as they ought to, bye bye local budgets. Of course, you’ll see adaptations, like oldsters or other childless households willing to take up some of these properties, but it looks like a big realignment is slowing starting.

By Nathanael Johnson (@savortooth on Twitter), Grist’s senior writer and the author of two books. Originally published at Grist

California is facing yet another real estate-related crisis, but we’re not talking about its sky-high home prices. According to newly released data, it’s simply become too risky to insure houses in big swaths of the wildfire-prone state.

Last winter when we wrote about home insurance rates possibly going up in the wake of California’s massive, deadly fires, the insurance industry representatives we interviewed were skeptical. They noted that the stories circulating in the media about people in forested areas losing their homeowners’ insurance was based on anecdotes, not data. But now, the data is in and it’s really happening: Insurance companies aren’t renewing policies areas climate scientists say are likely to burn in giant wildfires in coming years.

Between 2015 and 2018, the 10 California counties with the most homes in flammable forests saw a 177 percent increase in homeowners turning to an expensive state-backed insurance program because they could not find private insurance.

In some ways, this news is not surprising. According to a recent survey of insurance actuaries (the people who calculate insurance risks and premiums based on available data), the industry ranked climate change as the top risk for 2019, beating out concerns over cyber damages, financial instability, and terrorism. While having insurance companies on board with climate science is a good thing for, say, requiring cities to invest in more sustainable infrastructure, it’s bad news for homeowners who can’t simply pick up their lodgings and move elsewhere.

“We are seeing an increasing trend across California where people at risk of wildfires are being non-renewed by their insurer,” said California Insurance Commissioner Ricardo Lara in a statement. “This data should be a wake-up call for state and local policymakers that without action to reduce the risk from extreme wildfires and preserve the insurance market we could see communities unraveling.”

A similar dynamic is likely unfolding across many other Western states, according to reporting from the New York Times.

To understand the data coming out of California we can use my own family as an example: A few months after Grist published a story about how my parent’s neighborhood is trying to fortify itself against future forest fires, my mom’s insurer informed her and my stepfather that they’d need to get home insurance elsewhere. For two months they called one insurer after another, but no company would take their premiums. So they turned to the state program as the insurer of last resort — which costs about three times more than they’d been spending under their previous, private insurer.

My folks have spent a lot of money clearing trees and brush from around their house. They’ve covered the walls in hard-to-burn cement panels, and the roof with metal. But insurance risk maps don’t adjust for these improvements. Instead, insurance companies seem to have made the call that the changing climate, along with years of fire suppression, have made houses in the midst of California’s dry forests a bad bet, and therefore uninsurable.

“For us, because we’ve done good financial planning and our house is paid off, it’s just an extra expense,” said my mom, Gail Johnson Vaughan. “But we have friends who have no choice but to leave.”

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  1. inode_buddha

    I have to confess I feel badly for the property owners, but I have no idea how those situations are normally handled as far as recompense. I live a few blocks from Love Canal — maybe that would provide a model for these property owners.

  2. Tyronius

    Where California leads, Colorado follows… This is going to be tough on a lot of mountain communities throughout the West.

    1. Anon

      There is substantial fire risk in California coastal communities as well. The coastal chaparral burns hotter and faster than evergreens at elevation.

      I have friends whom I counsel to “get ahead of the curve” and sell their homes in fire prone areas, but familiarity and family (extra bedroom for daughter’s occasional return from college) make change difficult.

      What many homeowners don’t recognize is that a firestorm event can destroy many homes in non-fireprone areas for lack of manpower and equipment to stop a rare single house combustion from migrating through a subdivision. (See: Santa Rosa,CA)

      1. Brooklin Bridge

        This is sick. You’re advice to friends is just to pass the mess on to the next buyer sucker that comes along. All heart. This kind of vicious pass the buck capitalist thinking (my company’s or my personal profit/well being above all and devil take the hindmost) is what got us to ignore global warming until we are in this fix in the first place. Your suggestion has no bearing on dealing with it other than getting some other sucker to take the heat for your friends’ mistakes.

        What is so twisted, is the casual acceptance of such a solution as normal and good business sense.

        1. Chris

          Whoa. Calm down. No personal attacks here.

          And what else would you recommend that poster say to their friends? “Boy, howdy, are you going to love bankruptcy and loss of property. Don’t move, you’ll miss it!”???

          This is going to be a sort of musical chairs game in reverse without state intervention. But who in their right mind would want to trust the state in this case?

          1. Brooklin Bridge

            see comment below. That said, you are just doubling down on the problem. Not a solution.

        2. Brooklin Bridge

          My previous comment came across too much as a personal attack which is not what I wanted to emphasize. You are hardly alone. We all grew up with this sort of sinister mirror reality where a winner is hard wired by the system (vulture capitalism) to an almost perfect reversed image looser, being increasingly the norm. Only its one to many.

          I’ve been telling my right winged friends that if they don’t start re-writing history pretty soon to blame the left for preventing us from recognizing climate change as a man made existential threat, it’s going to be blamed on them whereas in reality I imagine there are just as many (or close to it) Democrats in big business as Republicans and they are mutually determined to prove that, “The sun never shone on a cause of greater worth” can’t hold a candle to, “Heads I win, tails you loose.”

            1. Brooklin Bridge

              And adding, I’m glossing over the fact that “the left” does not mean Democrats except in the mind of Democrats when they feel it expedient. But they (the left) make a great catch all for most climate deniers.

              1. Chris

                Ok, I understand where you’re coming from. These are huge problems and individuals can’t really do anything about them.

                Give you another example, plastics that we use in food storage, transportation, and preparation. Most have not been studied by the FDA. BPA and BPS are basically the same thing structurally as far as the body is concerned and we don’t know about the rest. Because we don’t have the resources to do the studies independently and reliably. You can argue that there a lots of reasons why that is but it’s still a fact that we don’t have the resources and aren’t likely to get them anytime soon.

                The size of the dislocation that would occur if we decided to stop using all of them until they were all understood and the full life cycle of these materials at different stages and how they interact with our bodies was analyzed would be enormous. One whole industry would die over night. And how do you prevent the worst effects in reality? Let’s say for the sake of argument all the semi disposable ziploc Tupperware knock offs that every cube dweller uses to pack their lunches in and most of the US puts their dinner leftovers in produce toxic by products after they’ve been used for 1 month, or been through the microwave 5 times or whatever. You can make them change colors if they begin to degrade, but you know what will do? Result in a whole bunch of poor people using the wrong colored stuff. And middle America will experience a huge hit in retirement savings if we kill this industry too. Imagine that.

                Now we don’t know how bad any of this stuff really is, we have some suggestions and it’s not good, but if you bring it up, you get the tin foil hat treatment. Because it’s everywhere. “Whaddayamean you don’t like plastic?” No one will agree that the risks are worth the rewards right now. So we don’t even ask the question. It makes you wonder if given the current state of our government we could enact a ban on anything. CFCs, lead, child labor, you name it. There would be a lobbyist and a campaign pushing back against no matter how heinous it was. As others have said on this board, we couldn’t even get public libraries to be a thing in today’s situation. Think about that.

                And you’re upset that individuals accept the status quo with climate change and real estate? Brother, they can’t afford not to. Because really digging down into the bedrock assumptions of the measured and productive economy right now reveals a whole bunch of things like this. Absent a near apocalypse nothing will change. Because individuals can’t effect the changes and large groups of people won’t be able to bear the costs of the change. States have no interest in supporting the change either. So be kind to these people who are looking to buy low and sell high. They don’t have a choice.

                1. Fiery Hunt

                  Thank you, Chris.
                  There are deep, deep, long-ago, baked-in, life altering, species-threatening issues we as individuals and as civilization that we are now finally starting to get an inkling about maybe changing our way of life, way of being.

                  Understanding who’s at fault and who’s gets burned is important.

        3. Anon

          Umm, homes (real estate) in California are transferred (sold) via structured (regulated) sales rules. Any buyer of a home in a fire prone area are made aware of that risk (along with floods). There is no coercion, it is a choice. Some folks are better able to handle (fund) the fire risk. The friends I referred to do not have that ability.

          They may choose not to accept my advice and enjoy many years of fabulous coastal views and continued family gatherings. Then again, it could all go up in smoke in one afternoon/evening.

          1. Brooklin Bridge

            Nice try. You gave away your belief system when you said, “Get ahead of the curve.”

            As to California’s great wisdom and high ethical purpose in real estate regulation, if the political intent of housing is to provide shelter and comfort for its citizens, then I stand in awe of California’s regulatory approach in which 1.5 million seems almost the norm in pricing in areas where there is any economic activity (jobs) to speak of. Again, you give the real purpose away when you discuss those who can now afford these areas that GW has made unattainable except to the rich or the foolish. So global warming is simply part of the great Capitalist system of making vast areas available only to the rich? Even our extinction as a species is simply a matter of capitalism working as it was intended: the great and mighty market place, where all, including our exit, is resolved by supply and demand, nice and neat and honest and above board in CA’s regulatory system.

            Of course, until that happy day, who pays each time all this comes crashing down to the ground in a fiery cyclical build up to the finale? The little guy in the plural, that’s who, in higher taxes because there is no way, absolutely none, that state sponsored insurance premiums of 3 or 4 or even 10 times the norm is going to pay for entire towns and cities being burned to the ground.

      2. drumlin woodchuckles

        This advice isn’t necessarily sick. If houses in the Fire Trap Zones of Tomorrow are sold to Global Warming Deniers, allowing the Global Warming Realists go escape while they can, then it isn’t “sick” at all. It is facilitating the assignment of Just Deserts to the people who deserve those Just Deserts.

        It is just like people living in the Shallow Seas of Tomorrow. If they sell their houses to Global Warming Deniers in time to escape to higher ground while letting the Global Warming Deniers to go “underwater” ( har dee har har), that isn’t sick either. That too is getting the Just Deserts to the people who deserve the Just Deserts.

        1. jrs

          They won’t exactly be deniers though. Yea all the deniers, the Republican party and anyone who votes for a denier, their trolls online, the Koch brothers, whatever can rot in hell. But I think this honestly will be ordinary people that don’t pay enough attention to the issue, too wrapped up in bills, and work, and parenting, and whatever. And I fear that’s most people unfortunately.

      3. drumlin woodchuckles

        I have read that the chaparral plants are covered with so much natural waxes and terpenes and tars and resins that when they catch fire, they burn more like a Lac Megantic Bakken-oil bomb train than like a bunch of wood.

        Have I read correct information?

      4. Tom Stone

        I work as a Real Estate Broker in Sonoma County CA and since March of this year every offer written by my firm has been contingent upon the buyer being able to get fire insurance.
        This happened after two deals fell through after all contingencies had been removed, one seller was gracious enough to not keep the 3% earnest money deposit, the other seller kept the money as was their right.
        These were nice properties, the second one was priced a little above $1.5MM.
        My firm made that buyer whole, which was a sound business decision, and they were able to find a suitable home a few months later.
        Right now it’s in the high 80’s with winds gusting to 35 MPH in Sebastopol…

        1. Brooklin Bridge

          I’m not at all without respect for life’s contingencies and the fact that things are so inextricably meshed that any sort of pure ethical high ground is impossible.

          The effort your company makes is a good thing and admirable. I hope you keep it up. One does question, however, will these people be able to get insurance a year from now? Two? etc. Possibly they can afford the 3x or 4x the normal price by using state subsidized insurance, but in the event of catastrophe (catastrophe that is obvious before it happens) this will be putting enormous strain on the government for funds that could be distributed more equitably. So a meager few will get massive payouts to rebuild their castles in increasingly absurd locations while the masses march ever onward to mass homelessness.

          It’s alarming that in the face of such obvious danger, people are still buying and still CAN buy houses that are or will soon be at very high risk and absurdly resource intensive.

          1. Fiery Hunt

            Since I’m in the process of trying to get out of the toxic, Mad Max neoliberal world of $3,000 studio apartments Bay Area but still want to live in my home state of California where my family lives…what else can I do but build and live in proximity to Nature’s revenge?

            1. JBird4040

              Where too? In California, the jobs are where the unaffordable housing is and there are no jobs where there is affordable housing. A commute of about fifty miles is needed between work and housing. I think that just like the last few times that a bubble popped both are going to down statewide. Housing prices will still be insane, but the 3,000 studios will be gone.

            2. Henry Moon Pie

              I have a suggestion if you’re going to build. Build what the people in the Sangre de Cristos have done for a long time: adobe walls with a metal roof. The folks in New Mexico just used corrugated tin, but there are more stylish and expensive options.

              1. Brooklin Bridge

                The building code regulations in CA are so stringent that they greatly affect the cost of housing thus serving the purpose of the market again by pricing the economic “loosers” out of the picture.

                Also, ironically, in a situation where very simple adobe mud structures that could be easily and cheaply rebuilt by the homeowner or by small business and tradespeople after a catastrophic event, the building codes in CA as in many states have evolved with the underlying principal being to build structures impervious to all eventualities. Inexpensive structures that are easy and quick to rebuild without incredibly expensive building equipment and equally expensive regulatory hurdles, are verboten.

                This may work for some structures such as high rises where incredible amounts of technology and expensive resources are warranted by scale, and for more average housing situations where the environment does not get out of hand, but it’s not suitable for a “be flexible like grass” philosophy where nature is to be lived with rather than overcome and dominated at all and any cost when the environment goes to extremes as is the case with the GW facilitated fires in CA.

                This doesn’t mean, of course, that if there is a raging inferno that takes down an entire town, that these regulations will do a whit of good in dominating nature by making the house impervious to the impossible.

                I feel for Fiery Hunt as his objective is entirely reasonable, but be that as it may, he as others are caught up in the utter failure of the economic market place to deal with housing needs vs. corporate needs in a catastrophic environment of which the market place and its intrinsic advantage to the few at the cost of the many, is largely responsible for in the first place.

        2. Alexis Soule

          This doesn’t make sense. Am I misunderstanding you?
          If there was a contingency for fire ins., there would be no right to keep any earnest money deposit. Also, 3% sounds high for a deposit, and I can’t imagine ANY real estate company willingly giving up $30,000- $50,000.

  3. Wukchumni

    As far as I know, nobody i’ve talked to in our community has gotten the ax, as far as insurance coverage goes.

    I wrote the check for the yearly insurance on our cabin so quickly, I sustained 2nd degree burns on my writing hand~

    Even when covered as far as fire taking down cabins en masse, the next issue would be getting competent carpenters to rebuild, and everybody would want to do it asap, while reality might be 5-10 years down the line. It’s a 2 hour commute each way for likely workers coming from Visalia, and that includes approx 666 significant turns on a twisty mountain road, and all building materials & work equipment would also need to be trucked up.

    1. Carolinian

      Well we hope you keep your insurance but many resort/retirement communities in the West are built where they shouldn’t be. If those states want to keep that real estate in play perhaps they are going to have to get serious about building codes that enforce fire resistance. This could be a real estate community problem that has been created by the real estate community.

      1. Wukchumni

        We’re in late stage 4th turning here, in that quite the wildfire laid waste to the area in 1926, with resulting views of faraway snow-capped mountain peaks for every cabin owner pretty much when the area first got going in 1929. My neighbor told me that in the late 60’s he could see all the peaks, when he was a kid.

        And then 90 years of trees growing, gummed up the works creating a pine curtain, and aside from a few lucky duckies, no distant views now. We all live in a forest.

        It’s a given the area will burn i’m somewhat convinced, and there’s been a number of prescribed burns surrounding our community, but it’s still thick as thieves in fallen trees and debris say a few hundred feet away from cabins, so that there’d be nothing to stop it when coming uphill towards us.

        A fire would render the place to be what it was like in 1929, with amazing views as who cares about an upright dead tree if it’s blocking your way, cut em’ down. It would excite cabin owners about the possibility of rebuilding, more than anything.

        And then the trees would slowly come back, and a big fire will take it down in 2101, rinse & repeat.

    2. Bugs Bunny

      666 turns sounds like State Hwy 49. My grandmother lived up there. I love the smell of the trees.

    3. drumlin woodchuckles

      If people lost wooden cabins in a wild fire in Fire Trap Valley, why would they be so dumm as to have more wooden cabins built? Why wouldn’t they be smart enough to build their replacement houses out of rock or concrete or some other non-ignitable material? Thereby reducing or eliminating the need for skilled carpenters?

      1. Wukchumni

        The newest cabin finished a few years ago is of the cement variety, with a metal roof. It took 2 summers to complete construction. You’d never know it was concrete, they look sharp.

        1. Brooklin Bridge

          Given enough intense heat, wouldn’t even these structures become uninhabitable? it’s one thing if the fuel for such conditions isn’t there, but the way you describe it, a full on conflagration would produce incredibly intense heat that could “cook” even concrete. Anyway, it sounds pretty nifty.

  4. The Rev Kev

    Just logging out for the night but before I do – in that opening paragraph where it says ‘California is playing one of its prototypical roles of leading the rest of the US’ should that not now read ‘California is playing one of its pyrotechnical roles of leading the rest of the US’? Good thing that California has such a large economy. They are going to need the money to cope with the increasing numbers of fires due to climate change. If I were them I would cut down all those eucalyptus trees and plant native trees instead.

    1. Hayek's Heelbiter


      For decades, I used to spend every summer at a spiritual retreat near Mariposa. Long ago, the area had been covered by the more fire-resistant Douglas firs.

      “Douglas-fir is more fire resistant than many of its associates because it grows rapidly and is covered with a thick corklike bark along its stem and roots.”

      The native firs had all been logged long ago and never replaced. In their place grew scrub oak and bull pines, also known as “kerosene on a stick.”

      In the middle 1990s, several of us discussed thinning out the oaks and pines and replacing them with Douglas firs. Alas, we kept putting the project on, well, the back burner. Sure enough, last summer, most of the retreat, with the fortunate exception of the caretaker’s house (bless the local firefighters) and a few outbuildings, burned to the ground.

    2. Synoia

      The native trees burn well thank you. As for Eucalyptus trees they rot and fall down by themselves, very well.

      The problem is extinguishing small, “controlled,” fires, which allows buildup of “fuel” (dry vegetation), which turns small fires into very large fires, in the wooded, generally affluent, hilly areas.

      I live on the CA flat-lands, with more dense housing, and much fewer trees. We don’t get large fires, we just get the smoke.

      The consequence of “Uninsurable areas” in CA will just increase house prices in the “insurable areas,” with the “big one” providing future slum clearance for post-earthquake rebuilding.

      1. Yves Smith Post author

        Huh? I lived in Australia. Eucalyptus trees are full of oil and go up like torches. They are well known as major propagators and intensifiers of bush fires, which get so bad in Oz as to turn the sky yellow and pose a health hazard just by virtue of the particulate matter in the air.

      2. Anon

        The Eucalyptus trees that were originally imported from Australia/New Zealand were actually quite sturdy. Initially they were intended to be used along the Calif. coast as wharf/pier pilings. But they were such aggressive interlopers in their new soil and climate they became widely used as wind breaks. Many Californians wouldn’t recognize their coastline/ stream courses without them.

        As Yves noted, they carry flammable resins/oils in their branches and leaves, which pile up at their trunk base and prevent other plant types from germinating. (So they become extensive mono-cultures of fire fuel.)

        It would be nice to get rid of most Eucs (some ornamentals are well-behaved), but the effort to remove and replant natives on a broad scale would be cost prohibitive, I believe.

    3. Wukchumni

      Another non local tree capable of much mayhem are those swaying palm trees in suburban settings, the fronds i’m not fond of in particular, unleashing fire spears with nothing to obstruct them from hitting roofs.

        1. Anon

          That’s why you see 12″ wide sheet metal wrapped around the trunk at about 10′ above ground. It induces a slip & fall condition which keeps the condo rat free.

  5. orange cats

    I am alarmed to see that houses are being sold and occupied in Paradise, Ca. In addition to the insurance issue, the water in Paradise is contaminated with benzene, something that was rarely seen after fires but might be a an emerging trend. I wonder how many of these houses are being bought by developers and if people know about the hazard. The houses are not cheap.

    From the Sacramento Bee: The water contamination represents yet another unexpected and costly headache for California, a drought-prone state where water is a precious commodity and where seemingly endless natural and human-made disasters are draining resources. So far, the expected cleanup and insurance costs of the Paradise fire exceed $2 billion. Through FEMA, federal taxpayers are expected to pick up the cost of municipal repairs.

    Experts who have rushed in to assess the problem say the water district may be able to clean pipes to some homes later this year, but it will take two years and up to $300 million before all hillside residents can safely drink, cook or bathe in the water from their taps.

    The health hazard is real, they say. Benzene is both a natural and human-made compound used as a building block for industrial products such as plastic, lubricants, rubber, detergent and pesticide. It also is found in crude oil, gasoline and cigarette smoke.

  6. inode_buddha

    I have to feel bad for the people who are going to lose their homes. OTOH maybe the insurance companies will be the ones to finally goad the Establishment into behaving better. Strange bedfellows and all that.

    I live a few blocks from Love Canal — maybe that should serve as a model for when this gets real ugly?

    1. Anon

      The Love Canal had “unseen” risks. Most buyers in fire prone areas know the risks, but see the overall environmental setting as attractive (and worth the risk). Unfortunately, many don’t recognize the hardship that losing ones primary residence creates on the larger community (funding fire protection services) and a rapid influx of new residents to surrounding communities. (See: Chico, CA)

  7. shinola

    Perhaps this could be an example of an area where Mr. Market actually works. If you want to buy or build a home in a high risk, fire prone area, fine – just don’t expect insurance to be readily available and/or affordable.

    Same applies to coastal property but for different reasons. Most homeowners policies written on coastal properties contain a Named Storm Exclusion clause. That is, if your home is damaged by a storm severe enough to have a name (tropical storm or hurricane) it is not covered. You would have to buy a supplemental policy that covers only damage caused by a named storm.

  8. Cal2

    I think that there will be a lot of jingle mail and walk-aways in the mountains. If one has a mortgage or a second on a house and their fire insurance is not renewed, the bank often can foreclose.

    But will they? Is it in their interest?

    The state program is very expensive. Add that to monthly mortgage payments and some homes just aren’t worth the dollar cost.

    Many of these communities in California are places where retirees have moved. This will put even more pressure on suburban and urban housing demands.
    Immigration driven population growth will become even less popular in regards to competition for housing. Which political party will benefit from that?

    1. shinola

      There is a form of insurance available to mortgage co’s called Lenders Single Interest. It covers only the amount of mortgage outstanding & is payable only to the mortgagee. The cost of the insurance is added to the mortgage payments. It is not cheap relative to the amount of coverage provided because a borrower who cannot/will not obtain their own insurance is automatically considered high risk. I don’t know if LSI is available in all states or situations, but here in “tornado alley” it seems to be readily obtainable.

  9. Olga

    Not to be mean to individual property owners – but does this not mean that there are areas in CA (elsewhere, too), where people simply should not live?

    1. Chris

      Yes. There are a lot of areas like that in the US. The problem is the costs of moving are high and there’s a lot of interference between some one who wants to sell and any buyer. You’re even beginning to see weird climate based gentrification in places like Miami, where the areas further away from the beaches and the cool breezes were previously occupied by the poor. Now the wealthy are buying into those areas because they’re at higher elevations. The signal I’m waiting for is when states like Ohio, Pennsylvania, and Kentucky see significant increases in rents and median home prices. Then we’ll know that people really are moving away from risks like wild fires and flooding.

      Significant portions of California are under water stress now. Significant portions of California are at risk of earthquakes and landslides. Significant portions of California are at risk of wildfires. Significant portions of California are at risk of industrial accidents from either current or abandoned facilities and infrastructure. And then there’s the taxes, cost of living, crazy traffic, and crazier governance. All of which has been well documented by NC. But the weather is beautiful and the wine is amazing. The state has become the textbook definition of a place you love to visit but would never want to live in.

      1. Tim

        “The state has become the textbook definition of a place you love to visit but would never want to live in.”

        Year round good weather is the biggest single factor of “a place you do want to live,” hence why it’s the most populated state in the nation despite being on the opposite end from where the country was first colonized, and all the issue you mention above.

        1. Wukchumni

          The previous inhabitants lived here for thousands of years and dealt with fire all the time, and weren’t too worried about not having fire insurance, and somehow made a go of it.

          Estimates for the pre-contact populations of most native groups in California have varied substantially (See Population of Native California). Alfred L. Kroeber in 1925 put the 1770 population of the Yokut at 18,000. Several subsequent investigators suggested that the total should be substantially higher. Robert F. Heizer and Albert B. Elsasser 1980 suggested that the Yokut had numbered about 70,000. They had one of the highest regional population densities in pre-contact North America.

          1. Chris

            By all means, feel free to live there. It is a beautiful place. I’ve been to CA many times. I lived there for a while as a teenager.

            But any place that has that many ways to kill you is not high on my list of areas where I want to settle long term. Of course, I can’t afford to live in CA with anywhere near the standard of living I currently enjoy. So it’s not going to be an option I have to consider anytime soon.

          2. Darius

            The first peoples didn’t have the European concepts of private property or money. These are incompatible with natural fire regimes or any other type of natural instability.

            1. Wukchumni

              Oh, they were concerned about fire, as acorns made up 2/3rds of their diet here, so keeping the oaks alive was paramount.

              Setting fire to the understory that only had less than a year to grow every fall without fail, was their answer.

              ‘Real estate’ here in pre-contact times was based on oak trees-not imaginary lines, as is our practice.

              1. Brooklin Bridge

                The big difference is that they did not produce or even add to global warming. As I understand it, many native tribes did indeed foul their nest, over cultivate, hunt to extinction, and so on over the centuries and had to move, but it was all local and (relatively/usually) temporary.

                1. Wukchumni

                  There was around 2,000 Native Americans here for a hundred generations, and the population didn’t change much…

                  Now, there’s around 2,000 of us that have taken their place, and what are the odds we’ll last 100 generations?

      2. Cal2

        Add to that, Oregon and Washington, basically anything west of Interstate 5, is at risk of a deadly Tsunami.

        “Last week, the governor of Oregon signed a law that, among other things, overturns a 1995 prohibition on constructing new public facilities within the tsunami-inundation zone. When the law, known as HB 3309, goes into effect, municipalities will be free to build schools, hospitals, prisons, other high-occupancy buildings, firehouses, and police stations in areas that will be destroyed when the tsunami strikes….Put differently, the law makes it perfectly legal to use public funds to place vulnerable populations—together with the people professionally charged with responding to emergencies and saving lives—in one of the riskiest places on earth… If there is anything that my reporting on the Cascadia subduction zone made horrifyingly clear, it is that, when the tsunami hits, virtually nothing and almost no one within the inundation zone will survive.”

        If you think 9/11 was a tipping point, consider that earthquake. Thanks to Governor Newsom’s voting not to shut it down, PG&E, the corporate murderer of thousands for profit, is still running, and refueling two uninspected, earthquake vulnerable, nuclear reactors sitting atop a complex of faults a few hundred miles from where the latest swarm of earthquakes occurred.

        Assume disaster and reasonably prepare for it. Then relax, you’ve done everything you can.

      3. jrs

        if you really think CA governance is crazier than your average red state I can’t help you.

        Of course it’s also true when Californians move in they have some tendency to turn those red states blue, so there is that.

        1. Chris

          I would never say that CA has the market cornered on crazy. But I don’t think you find the same combination of high taxes + crazy in your typical red state. You do get the same amount of “I’ve got mine” thinking in both types of states though.

          1. jrs

            high taxes but the benefits are better. Medicaid was expanded (actually of course it is everywhere but the south), unemployment easy to collect (CA definitely favors the employee on this), college still cheaper I believe, but not cheap and very overcrowded. More worker and consumer legal protections, like protections against non-compete agreements in employment. Many times I’ve been glad to find I’m excepted due to something like that.

            I don’t really believe CA is crazy except mostly on a few marginal issues. I do believe it’s serious Dem machine politics, and there is some corruption involved in that. And that some major issues are not being addressed like housing costs. And I don’t think the voters are all that left, despite the blueness of the state, many just seem to want centrist Dem policy.

            1. Chris

              I’d be interested to hear what benefits you think your taxes provide when the cost of living and housing are so high. Also all the risks from what’s previously been discussed.

              It would be a good way to compare a more active state against your typical red state suite of non-protective practices. Since that’s what we’re essentially trying to sell the US with the few candidates pushing leftist policies we have up for consideration in 2020. I’m hoping Bernie wins against all odds. I haven’t figured out how to explain it to my red state friends and families in a way they’ll appreciate and believe yet.

              1. scarn

                Happy Californian here. I’m unsure what benefits I accrue from higher taxes, compared to any other state. I’ve lived in four other states, and I didn’t notice any non-political lack of services in any of them, including two with very low state taxes. The quality of the roads and common state services seemed similar to me.

                I know our medicare and medicaid benefits are supposedly grander than most. I think that might be it. I can’t believe that offsets the cost of living.

                The women in my family are happy that reproductive rights are strong here. The idea of living in a state where they are not is a little chilling to them.

                I live here because I love the place. I love having the Pacific Ocean down the street. I love the deserts, I love the mountains, I love the light and the weather. I love our state parks, and our national parks, and our BLM land. I can’t really put a price on that. One life to live, I guess.

                1. Anon

                  Knock It Off, guy! There are already 40 million here.

                  As I sit in the cold fog of the Pacific. Fighting to see the lights of oncoming traffic. On my way to Silicon Beach.

    2. lordkoos

      Sure there are areas in the mountains where people should not live now, but back when most of these people bought their properties there wasn’t anywhere near the level of fire danger that we see now. This is a pretty recent phenomenon.

    3. drumlin woodchuckles

      In an overcrowded world, the places where people “should live” may become so expensive that millions of poor people are driven into internal exile, living in those places where people “should not live”.

      Those people will be the pioneers in trying to build just-barely-affordable fire-PROOF NON-ignitable houses . . . with in-house waterless toilets, roofwater collection-storage systems, etc. Such houses will not be stylish. They will be overground concrete bunkers, but they will be an interesting experiment in living where people “should not live” , because there was no room left where people “should live”.

  10. Tomonthebeach

    It is way past time for the hammer to land on CA. Those of us in hurricane alley have been paying double to triple what mainland homes in tornado alley pay. Weather and salt corrosion of everything metal is the price of beach life. Why should there not be a price for deep-woods life? Should all Americans pay for the lifestyle choices of others?

    1. orange cats

      I understand what you’re saying but often deep-woods life is not a true choice. Houses are cheaper there. As was repeated ad nauseum after the fire, Paradise was unkindly called “Poverty Ridge” by former Chico residents like myself. Also, fires are more destructive now due to suburban sprawl, not just deep-woods houses.

  11. aronblue

    My parents retired to a mountain home because they were priced out of the coast – exactly one insurance provider will cover them and at high cost – and they don’t move for the same family reasons .. every season is a nail biter and even if the fire doesn’t come the insurance could disappear. Makes me glad marijuana’s legal …

    Geez I’m glad for naked capitalism – you always post stories I can relate to.

    1. rd

      If you look at real estate prices vs. natural disaster risk, they are correlated – the higher the risk, the higher the real estate price.

      The Rust Belt and Mid-West generally have low natural disaster risk as long as you stay out of river floodplains (don’t buy a house on River, Lake, or Beach Road). These are some of the lowest real estate prices in the country. Those of us who live in these areas have no interest in subsidizing people who want to live in disaster zones.

      1. drumlin woodchuckles

        The coming raindump waterbomb superstorms of our global warming future will reveal all kinds of little perched flood-ponds, mini-flood plains, etc. which never used to form when rains were less than they will be.

        I don’t know whether studying topographic maps and etc. would reveal those future-flash-flood sites of tomorrow before they happen. If such study could reveal possible raindump waterbomb floodsites, one should avoid buying a house in those sites too, also, as well, in the Midwest.

        1. rd

          In general those areas are already well-known. The problem is that we have been paving them and eliminating the wetlands. So the runoff increases and detention decreases per unit of rainfall at the same time as the units of rainfall are increasing. So it is a triple whammy catching people by surprise. We have all the data and tools to address it – it just requires the will to do so.

          In most cases, developments do the analysis in order to get building permits. However, they are using standards developed decades ago for defining the events that need to be designed for. Rarely are they looking to accommodate what a projected 100-year event in the future will look like. Instead, they use a 25-year event based on data from the past century. Here is the current main data source:

          Until just a few years ago, Technical Paper No. 40 (1961) was used for much of the post WW II infrastructure and residential development:

          If you want to see how much things are changing, you can do a comparison for a location between these two data sources and that will provide an opinion of the change that has occurred in the past 50 years. For sites I deal with, there is a subtle but marked difference in the size of precipitation events for a given frequency and duration.

  12. spro

    Also lost my CA home insurance due to wildfire risk. Thankfully a local branch of a national company had dropped people a decade ago in order to restructure their exposure specifically for wildfire risk, and is now in a position to insure homes like mine. But I have lots of neighbors higher up in the hills who can’t get better than $3K+ annual quotes, and I anticipate getting dropped again before long.

  13. inode_buddha

    There is one fix, but people always tell me I’m crazy. We have way too much water up northeast here around the Great Lakes, and New Orleans (among others) flooding. That water only drains two ways: out the Mississippi, or out the St. Lawrence Seaway.

    If we can build oil pipelines, why can’t we build water pipelines from (say) the Great Lakes and from NOLA and pump the overflow into the Colorado River, which then makes its way thru LA after generating power… Pretty sure that would be a blessing for the people in LA. We already *have* the pumps in some cases (in some cities).

    Trump talked about infrastructure, lets try this idea.

      1. J7915

        Where would the Arkansas river be reversed to? Oklahoma and Arkansas use the river for export shipping through New Orleans.

    1. mle in detroit

      1. No (familyblog) way.
      2. Beyond the billions needed to build such pipelines, there will be annual billions to clean the zebra and quagga mussels out of them –if you can. See Dan Egan’s book, The Death and Life of the Great Lakes

      1. Wukchumni

        All of San Diego’s reservoirs that are largely supplied by the Colorado River water have Quagga mussels in them, brought by a series of pipes from said river which is a johnny come lately to mussel beach, only arriving after the turn of the century. What could go wrong?

    2. Louis Fyne

      The Great Lake water is treaty-regulated between US & Canada—supreme law of the land and all that. Any sort of piping Great Lakes water outside of the basin is a non-starter.

      one of the sticking points of Foxconn’s Wisc. factory was litigation over the factory’s water use and whether it complied w/the treaty

      as recent as 10-15 years ago the Great Lakes water levels were at historic lows. can’t assume that high water levels now are permanent. just saying

      1. Phacops

        Exactly, and one reason I oppose Nestle’s Evart, MI, bottling operation. If people want Great Lakes’ water they could move into the watershed. No reason here to support water spendthrifts who build in the arid West.

        1. rd

          Everybody badmouths the Rust Belt but a major reason it was developed between 1825 and 1960 was water resources for transport, drinking, and industrial use. I think that will become a driver for a renaissance of the region again.

          Much of the Great Lakes region is likely to be one of the few places where climate change will be generally neutral to positive once communities address local flooding issues through improved zoning and land use. Central New York is projected to become more like Harrisburg, PA for climate in the coming decades – that certainly doesn’t sound unlivable. Lake Ontario is elevation 243 feet – maybe that will become ocean front property once all the ice caps melt.

      2. inode_buddha

        Fair point on the Great Lakes, I wasn’t aware of that. However, NOLA pumps every day, all day,,, could still do that, instead of pumping it into the Gulf.

    3. Darius

      The Great Lakes are a finite resource. Michigan is the only major land mass in the watershed, which extends between less than five and a little more than a hundred miles from any shore. The water replacement rate is only about 1 percent a year. This is why attempts by Milwaukee suburbs, less than ten miles from Lake Michigan but in the Mississippi River watershed, to get Lake Michigan water are so controversial. The Illinois Santary and Ship canal already drains too much Lake Michigan water to the Mississippi.

      Over my dead body will we drain the Great Lakes dry so people can grow alfalfa and lawns, and have swimming pools in the desert.

    4. drumlin woodchuckles

      That water is neither “too much” nor “surplus”. That water is used to float boats. Less water in the Lakes . . . less shipping business. Enough less water in the Lakes, less commercial fishing. Also less water available for Lake Basin use and/or irrigation.

      Also, the Lakes are thermal flywheels, moderating temperature swings within a few miles all away around each Lake. That will be ever more useful in the ever wilder temperature swings of our global warming tomorrow.

      People who think the “pipe it away” idea is a bad one will just destroy every pipeline that is built before it is finished to make sure that people from Outside The Basin are able to steal any water from Within The Basin.

  14. rd

    Psychological research has shown that people are not very good at assessing long-term risk. It appears the insurers are being the adults in the room telling people that the risks are unacceptable using normal norms.

    Wildfire, hurricane storm surge, and flooding are low frequency, very high impact events. So there is no damage until it suddenly is wiped out in minutes. This is similar to the analogy of the Thnaksgiving Turkey that Taleb has used where its life is going swimmingly until the day before Thanksgiving at which point it is terminated.

    California, Florida, Texas, and other places have allowed largely unfettered development in areas that likely have 30 year or so cycles of disasters. California happens to have wildfires followed by mudslides. It takes time for the forests and scrub-shrub areas to regrow and build fuel reserves, but the ecology is based on fire cleaning it out periodically. The longer you prevent fire, the worse it will be when it occurs. Frequent grassland fires aren’t too bad and don’t get too hot. Mix in lots of dry woody fuel from years of fire suppression and you have an inferno which is what Paradise and other areas experienced. So there is a virtual guarantee that 30 years after a fire, there will be another one in the offing. This is not factored into land use planning, zoning, building permits, or property taxes.

    There are areas where development occurred a century ago before risk was not well understood. These areas are different from places where people want to develop today or rebuild what was lost. There either has to be a plan to prevent the consequences of the inevitable or pay high insurance rates for replacing everything every couple of decades. Climate change is simply compressing the frequency and increasing the aerial extent of impact – it is not creating the risk out of thin air. American society appears to be deciding to develop land without either path. However, the private sector insurance companies are responding by saying that they will not participate. So people either go naked or the government steps in as the insurer of last resort.

    Coastal development in storm surge areas, developing in mud slide prone areas, developing in mapped floodplains, and developing in fire-prone land.are all part and parcel of the same general policy concepts. The policies are rapidly moving into high unsustainable terrain where the local decision-making entities are expecting larger government entities to pick up the tab for their blunders. Anybody who used rational risk-based decision-making is then on the hook for the people who take the risk without accepting it (also sounds like the financial crisis).

    1. Brooklin Bridge

      Government insurance for this sort of increased certainty and decreased time between iterations is really tax payer subsidized assistance for the wealthy since the premiums may be high (to the point of being “exclusive” insurance) but the payouts are positively gigantic and frequent.

  15. John Zelnicker

    Down here on the Alabama Gulf Coast there is a large swath of the southern part of Mobile and Baldwin counties, up to 30-40 miles from the coast, where the only insurance for any windstorm damage (named or not) is provided by a state high-risk pool with deductibles as high as 20%, and Actual Cash Value (depreciated) payouts, along with high premiums.

    I owned a rental property that was in the “zone” and the windstorm coverage with a 20% deductible was double the premium for all other building and liability coverage.

    With high deductibles and depreciated valuations, most claimants will get pennies on the dollar, at best, relative to replacement cost.

  16. PKMKII

    Similar sort of problem with south Brooklyn/Queens. Despite being a good 60 feet elevated from sea level, simply being too close as the crow flies from the water meant that none of the big insurance companies would touch our house. Had to go with a coastal property specialist insurance company. Meanwhile, we know someone who bought a house on the Rockaways, no private insurance company would insure that property. Had to go through a NYS program that’s extremely pricey as compared to the average private insurance in the NYC metro area.

  17. notabanker

    I think most of these comments are missing the point, and that is the precedent is now set.

    It’s not about a set of sequestered homes in CA. It’s about the refusal of the industry to insure against climate change. Won’t be long for sea level flooding to not be insured. How long before hurricanes are all deemed climate change related? Flooding in the midwest? Oh, so sorry tell it to Exxon. That F7 tornado? Never had anything like that before, not covering it. Etc….

    This will collapse the mortgage industry, and everyone is going to be looking for the federal government to step in and insure it. Who here has even a modicum of faith that individual homeowners will be protected in all of this? I personally have zero.

    1. rd

      Sea level flooding is already not insured other than through the FEMA flood insurance.When the storm surge, river, and lake flooding become big enough, even Congress will have to take a look at that program. The screams of anguish from the last time they tried to rationalize the program meant that they rolled back many of the changes and left it on an unsustainable course.

  18. Randy G

    I’m in the middle of selling out in California and moving into a leased house in Tucson. Moving is extremely stressful—particularly since I just moved out of Monterey a couple of years ago (where I couldn’t afford to buy) into the Sierra foothills — where I can’t afford to breath.

    Breathing is a problem because the air pollution is so damn bad—and that’s when there are no fires jacking up the particulate matter and toxins in the air.

    I pay about double for house insurance because of fire hazard, but I’m in a more open oak terrain at 1700 feet (just below Coarsegold)— so somewhat free of the intense fire risks associated with dense pine and fir forests. Therefore, insurance should remain available although pricy. (A friend just gave up on buying a house near Oakhurst, CA when he added in the current fire insurance costs, which will probably go up soon enough.)

    However, even when a fire is not a direct threat — such as near Mariposa or Yosemite, etc.— the already bad air becomes unbreathable.

    Moving OUT of California because:

    A.) Air pollution from Fresno and the Central Valley is awful in the lower Sierras (or Sierra if you are a purist).
    B. Fire risks
    C. Terrible traffic congestion just about anywhere & everywhere from Berkeley to Yosemite —and I try to keep a 100-mile sanity buffer from LA.
    D. Costs of just about everything— but especially housing.

    Now if I could afford a house in Monterey — not remotely — I would stay. But I don’t even play the lottery….

    Fortunately, I like the Southwest — interesting cultures and wildlife —especially javelinas, Gila monsters and immense Western diamondbacks!

    Tucson has blemishes and packs extra heat, but a big upgrade, in my opinion, to godawful large California cities such as Stockton, Fresno and Bakersfield.

    And, yes, even preferable to San Jose, where a rundown tract house with a dead lawn will set you back a cool million or so.

    1. Monty

      I’ve spent the last 20 years between CA and AZ, and like you say, it is really hard to justify the massive CA price premium in the nice areas. They aren’t that nice!

      It sounds like you’ll be getting to AZ at the best time of year. IMO Fall (aka A couple of weeks in November) is the best!

      Good luck with the move!

    2. Kate

      I respect your choice, of course, and wish you good fortune. In my case, I was born in the East Bay Area sixty-one years ago and have a dense social network. The idea of relocating for me, as for many, proves to be financially, practically, and emotionally daunting. I think we should avoid the “why don’t they just move?” attitude, which we have recognized as so harsh with respect to inhabitants of the Rust Belt.

  19. Joe Well

    World population is set to decline along with declining birthrates. Also, younger people are less likely to want single family homes than older people. So, the value of single family homes is going to decline anyway and presumably a lot of them are going to be torn down.

    Why isn’t there more demand for the state and federal governments to take charge now and buy up uninsurable properties at current market rates while they’re still worth anything and create nature preserves? Here in New England, a lot of state forests were created in the early 20th century. They are dotted with the foundations of old houses that had lost much of their value before the state took the land. Something wonderfully meditative about a house foundation overgrown with trees in the middle of a forest.

  20. Altandmain

    It is happening all over the world.

    Here is an example in Canada.

    I suspect that this could be a problem when the best land becomes what is least likely to suffer from a serious natural disaster. We could see a situation where the rich get the least damage from the effect of natural disasters.

    I think that this is going to mean that we have to build higher density housing in the areas least affected.

    The other is that this is going to increase the pressure against immigration. There is simply less land that is insurable to go around. Perhaps have a fertility rate below the replacement rate is desirable.

    I suspect that food production is going to be the next big issue.

    1. Greg

      And in NZ we’re at the stage of “premiums are four to five times higher than elsewhere but its not technically uninsurable, if you’re rich enough”.

      The big earthquakes in Christchurch and the worrying but safer Wellington one over the last decade have ratcheted up prices, and surprise surprise it turns out places prone to liquefaction in earthquakes are also usually under extreme threat of sea level rise. The insurance companies are taking the natural disasters as an opportunity to price in (and out) the anthropogenic disasters.

    2. rd

      Reading this story, it is clear people are still mixing and matching climate change, urbanization, 20th century dam construction, and random infrequent events.

      Dams were built on the St. Lawrence River as part of the Seaway construction starting in 1954. So this provided some level of flood control but has to balance flows between shipping, power generation, upstream flooding, and downstream flooding. The initial flood protection gave an appearance of safety that encouraged development. So Pierrefonds was flooded in 2017 and 2019 as the Great Lakes basin received much more water than usual. It is likely that there were flooding events historically but the impact would have been much less because it was just small villages there.

      The Toronto example seems to be more like Houston where increased urban development upgradient has increased impermeable surfaces and runoff. So a rain storm provides more runoff than historically. climate change impacts this by increasing the magnitude and frequency, but that is just making a gun with a bigger caliber and more bullets that can do more damage more frequently. There was already a gun that would have caused periodic damage just due to the urbanization.

      Similarly, the Calgary downtown was built on the Bow River floodplain. The big floods are infrequent but have always been there. The big question is if they will become more frequent and bigger or if it was actually just a random event within the historic norms (including pre-development periods). The Calgary floods were not due to development – they were generated in the mountains without large anthropogenic drivers. Calgary and High River just happened to be on the route for the flowing water.

      We need to understand that our suburban experiment is only 60 years old. So when considering 25 year, 50-year, and 100-year events, there would naturally be very few to test the suburban systems for managing storms and flooding. The design codes for suburb storm water management are generally focused on 25-year, 24-hour events. So it is likely in a 50 year period that there will be at least one event that will cause challenges even if everything is properly designed and zoned. However, robust design of suburbs has not been a major priority in the urban planning and engineering community as it costs money and developers, communities, and homeowners have generally not been interested in going beyond minimums. What climate change is likely to do is to turn those much less frequent 100-year storms into 25-year events.

  21. techceo

    Here is my observation on current land/fire danger:

    1. I see pictures from 100 years ago of my neighborhood (close to the mountain and facing the ocean in southern california) and there was only yellow grass everywhere with very rare native oaks….chaparral was further up the mountain. I know the local native Chumash dealt with fires now and then but from fire protection perspective it is so much easier to protect agains grass fire then forest/brush fire.
    2. In the past 100 years lots of houses were built (even though most of them are in 1-5 acre lots) and lots of trees were planted because people liked their privacy. Pictures of the current landscape show vastly more trees (including eucalyptus) even to the point where houses are surrounded by them. Every time I try to cut branches or trees, there is the mandatory old person that will come by and tell you I should not cut anything because they do not want to see my house and me theirs.
    3. California is a beautiful place and climate change is real but from my observation of local politics and environmental control we are now paying for years of failure to manage the environment which we engineered. Controlled burns were fought, overgrowth was allowed with no clearing, natural fire was suppressed. I hope lessons have been learned….

  22. Ignim Brites

    Maybe the difficulty of getting reasonable fire insurance for dwellings in California’s hot and dry as hell inland areas is due to climate change. It is certainly due to the raging fire of Fed induced asset inflation.

  23. kswc

    Welcome to Florida where homeowners who can’t get insurance for hurricane exposure from private companies buy from (CPIC) Citizens, the state run “last resort” insurance program. It’s expensive.

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