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Backdraft in the West

As the smoke clears, major changes from the West’s devastating wildfires impact the construction industry

March 15, 2022 Photo

Our previous article, “Rebuilding the West” (Winter 2020 Construction Claims), discussed the concerning trajectory of the size, frequency, and, most importantly, damage caused by wildfires in the western U.S., along with legislative and construction industry responses borne from the lessons of the recent 2018 and 2020 wildfire seasons. This article provides an update to these developments in the western states—and particularly California, which continues to serve as a leader in wildfire prevention and suppression. 

California Legislative Responses

Within California, State Sen. Bill Dodd remains a leader in advancing critical wildfire legislation.  His constituents in Napa County and the surrounding areas have faced some of the state’s most devastating wildfires. Dodd sponsored SB 240 (now the Insurance Adjuster Act of 2019), which set regulations for insurance claim adjusting in emergencies; and SB 190 (now codified in the state’s Government Code and Health and Safety Code), which pertains to fire safety, building standards, and defensible space requirements. 

More recently, Dodd has sponsored several pieces of important wildfire-related legislation: SB 109, SB 332, and SB 440. The first two have been signed by California Gov. Gavin Newsom and codified, while the third died in the legislature.

SB 109 creates a research and development wing within the Department of Forestry and Fire Protection (Cal Fire). Known as the “Office of Wildfire Technology Research and Development,” it is tasked with studying, testing, and advising regarding procurement of emergent technologies and tools to more effectively prevent and suppress wildfires. The now-active legislation is significant in that it dedicates government resources to harness the power of technology and wildfire science in prevention and suppression. 

SB 332 provides immunity from liability for fire suppression or related costs for a prescribed burn, provided the burn is for the purposes of wildland fire hazard reduction, ecological maintenance and restoration, cultural burning, or agriculture; and, when required, a certified “burn boss” reviews and approves the burn procedure. The bill is important in that it recognizes the importance of private entities, rather than government agencies, engaging in controlled, prescribed burning for the benefit of the public. 

SB 440 would have created a joint powers authority at the state level, which would have been tasked with administering a grant program to assist qualified landowners to retrofit structures to protect against wildfire, including the creation of defensible space around structures.

Next, California has recently enacted two important pieces of legislation aimed at wildfire safety and prevention: AB 9 and SB 63. AB 9 creates, within Cal Fire, the Regional Forest and Fire Capacity Program, and its purpose is to develop and implement strategies for wildfire preparedness and resilience. The program is able to provide grants to coordinating organizations that provide technical assistance to this end.

SB 63 requires Cal Fire to designate not only very high fire risk areas, but also moderate and high fire risk areas. In other words, SB 63 increases Cal Fire’s designation responsibilities into lower-tier fire risk areas. This law also requires Cal Fire and the California Department of Housing and Community Development to propose building standards for moderate, high, and very high fire risk areas. Thus, SB 63 requires cooperation between various state agencies in designating fire risk and in establishing new building standards for moderate to very high fire risk areas. This law was welcomed by the construction industry and the California Building Industry Association. Building standards for high fire risk areas are expected to become more stringent as a result of SB 63.

The California legislature is considering two additional bills that would create restrictions for building in high fire risk areas: SB 55 and AB 1295. Both of these bills are currently in committee. SB 55 would prohibit development in a very high fire risk area unless there is substantial evidence that the local agency has adopted a comprehensive wildfire prevention and community hardening strategy. SB 55 would also provide to qualified developers a supplemental height and density bonus for developments that are not located in moderate, high, or very high fire risk areas. Thus, SB 55 makes it more difficult to build in very high fire risk areas, and creates an incentive to build in low fire risk areas.

AB 1295 would shift development authority in designated areas from local agencies to the state level. Specifically AB 1295 would prohibit cities and counties from entering into residential development agreements for property located in a very high fire risk area, as defined by Cal Fire. The bill matter-of-factly states that “prohibiting residential development in very high fire risk areas is a matter of statewide concern and is not a municipal affair.” Whether AB 1295 becomes law is expected to be a drawn-out and highly contentious matter.

The California legislature is also focusing its efforts on the insurance impacts of wildfires via AB 1439 and AB 1522. The latter bill, known as the “Catastrophic Wildfire Insurance Act,” would prohibit an insurer from cancelling or refusing to renew a residential insurance policy based solely on the fact that the property is located in a high fire risk area. This legislation is in direct response to some large insurers recently making efforts to exit the California fire insurance market via non-renewal of existing policies.

AB 1439 would mandate discounts for specified residential and commercial property insurance policies for properties located in areas where the local government funds wildfire protection or mitigation programs. 

Around the Country

Oregon recently passed a number of bills as part of a comprehensive plan to improve wildfire prevention and mitigation efforts. SB 762, the most significant of these measures, creates new defensible space standards, develops a statewide map of wildfire risk zones, increases firefighting capacity, and provides funding for forestry management. SB 762 follows a watershed moment in Oregon: In 2020, Gov. Kate Brown issued Executive Order No. 20-04, directing a number of state agencies to adopt climate change policies within their respective regulatory frameworks. Other important measures provide tax exemptions on residential housing built to replace fire-damaged properties (HB 2607); property tax interest waivers for those impacted by wildfires (HB 2247); and allow temporary siting of recreational vehicles on properties where homes have been damaged by wildfire (HB 2809). 

Legislators in Washington state have taken similar measures targeting wildfire prevention and suppression. HB 1168 is an omnibus bill aimed at curbing “uncharacteristic wildfire risk.” Notably, the bill was authorized in large part by the state’s Department of Natural Resources. HB 1168 would provide $125 million in funding every two years for strengthened wildfire response, forest management, and resilience or hardening measures. The bill passed nearly unanimously in both state legislative chambers and was signed by Gov. Jay Inslee in May 2021. 

In Arizona, Gov. Doug Ducey recently signed into law SB 1442, which creates a joint program between the state’s Department of Forestry and the state’s Department of Corrections, employing inmates to assist in clearing and managing forests to make them less prone to severe wildfires.

In Montana, the legislature has adopted a comprehensive state fire policy that calls for interagency cooperation and coordination in fire prevention, hazard reduction, and loss mitigation, as well as forest management activities to reduce fire risk, and the development of fire protection regulation for building in wildfire-prone areas, among other things.

Housing Shortage and 
New Construction

Similar to the legislative branch in California, the executive branch has sharpened focus on the relationship between the housing crisis and thoughtful wildfire policy, with a recognition that the latter is directly related to greenhouse gas emissions and resulting climate change. In other words, climate change makes wildfires more frequent and severe, and, therefore, a truly comprehensive wildfire policy must address climate change.

California’s recently issued proposed budget for 2022-2023 does this in unequivocal terms. The budget is defined by the policy goal of building new housing in urban areas, and away from wildfire-prone areas. The budget is a blueprint for bolstering new construction in underbuilt high-density areas, known as “infill development.”

According to Newsom’s office, addressing the state’s anticipated need for millions of new housing units over the next few years will require infill development near schools, hospitals, and employment centers in “downtowns” and “main streets,” so as to minimize greenhouse gas emissions from long commutes, while also discouraging new construction in high wildfire risk areas, which tend to be furthest from dense urban centers. This type of infill development is also expected to bring more affordable housing to market due to economy of scale. The price tag for these policy measures is over $2 billion for the next two years, which is in addition to the $10 billion committed by California in 2021 for the same ends. 

Recently, California courts have, separate and apart from the legislative and executive branches, impacted the future of new construction in wildfire risk areas. In Lake County, a mostly rural region in northern California, a $1 billion proposed development known as the Guenoc Valley project was dealt a blow by California Attorney General Rob Bonta. The project, which features vineyards, a golf course, a polo field, and luxury residences, was proposed to be built on 16,000 acres of open space. Lake County approved the proposed development, which undoubtedly would bring with it much needed housing, jobs, and tourism.

However, Bonta was successful in having the development approval order vacated, citing grossly inadequate wildfire risk analysis within the required environmental impact report. Specifically, the Lake County Court cited the development’s failure to plan for wildfire evacuation routes, given that the land at issue is in area designated as one with a “very high fire risk,” and one that has experienced 11 wildfires since 1953. 

Similarly, in southern California, the Centennial project has faced environmental hurdles rooted in wildfire risk concerns. The Tejon Ranch Company (the owner of the largest contiguous plot of private land in California—270,000 acres), proposed to build 19,300 residential units on 12,000 acres on the northern fringe of Los Angeles County, in an area known for dry, windy conditions. The project, first proposed nearly 20 years ago, faced a slew of opposition from environmental groups.

However, in December, 2021, Tejon Ranch reached a settlement with the environmental group, Climate Resolve, with the former agreeing to make all 19,300 homes “zero emission,” which means, among other things, no natural gas hookups, mandatory electric vehicle charge stations throughout the project, and a number of fire prevention measures.

Nonetheless, a Los Angeles County judge has cleared the way for another lawsuit by two other environmental groups. A key claim of these groups is that the proposed development sets forth inadequate wildfire mitigation efforts.
The future of both the Guenoc Valley project and the Centennial project remains uncertain. However, the increasingly important role of wildfire considerations in construction in California is far from uncertain.

Construction Industry Responses

The construction industry has responded to worsening wildfires in a number of important ways. These responses are prompted not only by increasingly strict governmental regulations, but also by market forces. 

As one of the most important building materials in the United States, lumber’s availability and pricing have upended the construction industry. In response to lumber price instability and the inherent ignitability of lumber, builders are turning their attention to alternative, wildfire-resistant construction materials.

The four most fire-critical assemblies of a structure are roofs, exterior walls (including windows and doors), decks, and landscaping. All of these assemblies can now be constructed with wildfire-resistant materials. A prime example is the growing popularity in the use of structural steel in residential construction projects as an alternative to traditional wood framing. Structural steel, while slightly higher in cost, provides fire resistance, durability, and termite protection.

Fire insurers commonly offer discounts for fire policies for structural steel framed structures, underscoring their fire-resistant value. Cal Fire provides resources for making existing structures more wildfire-resistant, a process known as “hardening,” through the use of non-combustible roofing materials (composition, metal, clay and tile), vent covers (to prevent entry of flying embers), windows (dual-paned and screen-protected windows are advised), exterior walls (stucco and fiber cement), and decks (ignition-resistant materials).

Common themes among the responses noted in this article are the firmly established relationship between climate change and wildfires, and the importance of balancing the current and projected housing shortages with policies and trade practices that keenly respect the science of wildfire prevention and suppression. It can be expected that the construction industry will continue to adapt to these developments in technology, with governmental regulation and market forces playing key roles. Additionally, the building industry, too, has made changes and is adapting.

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About The Authors
Multiple Contributors
Richard Glucksman

Richard Glucksman is a partner at Chapman Glucksman Dean & Roeb.rglucksman@cgdrlaw.com

Ravi Mehta

Ravi Mehta is senior counsel 
at Chapman Glucksman Dean & Roeb. rmehta@cgdrlaw.com

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