Considering Risk: Rebuilding with Confidence

Historical evidence suggests that LA’s January fires were a predictable outcome of decades of risk mismanagement. Some of the areas that burned are also those that commanded the highest price per square foot. Their proximity to still-raw canyon wilderness and stunning westward and ocean views skyrocketed their value while hampering the effort to make the necessary changes to protect them from fire hazards.

The values intrinsic to those properties also explain the popularity of the communities in which they sit. Not only will people pay top dollar to purchase them, but they’ll also rebuild in the exact location despite the clearly demonstrated escalated risk of loss to ‘natural’ disasters. Homeowners in the affected neighborhoods have been rebuilding on the same sites in Malibu, for example, since at least the 1930s, even though those homes have been decimated by fire at least eight times during that era. Further, if this trend continues unabated, then the communities that have just gone up in flames will again be rebuilt, either by their current owners or by new buyers, only to be lost again under similar circumstances. People remain eager to reap that particularly enticing and very ‘LA’ asset: a view of the Pacific from atop a Beverly Hill.

However, while the risk of loss (to fire, mudslides, and other crises peculiar to the region) remains high, the affected real estate also offers a lifestyle or market sector second to none. Should they choose, current or new owners can mitigate their risk level as they rebuild by embedding resilient design strategies into their redevelopment process. Embracing these strategies requires ferreting out as-yet unseen hazards and removing the blind spots that shield from view the threats that are inherent to these locations.

Seeing the Unseeable – Five Steps to Disaster Resilience

Whether the rebuild project is domestic or commercial, the mandate to fully evaluate potential hazards remains the same. These five steps offer a roadmap through the threat assessment process and provide parameters to clarify and establish protective resiliency strategies:

1. Clarify the extent and context of already-known risks to establish a baseline for their expansion. Whether rebuilding a commercial site or a personal home, knowing how existing risks currently impact the four metrics set out below can inform the emerging risk management process:

a. The physical location often suggests fundamental risk management practices. The potential to experience losses due to fires, floods, thefts, etc., is frequently well calculated by insurance agencies and actuaries.
b. Economic realities and potential losses are often clearly defined and potentially mitigated through contractual terms and appropriate financial management practices.
c. Environmental and social contexts also inform where, when, and how risks might arise. These concerns refer to internal cultural and human activities in companies, communities, and families that may give rise to escalated risks of loss due to human activity.
d. Knowing who is making the risk management decisions for the region is as important as what decisions are being made. Identifying the current ‘governance’ of management authorities will clarify who needs to know what and when the crisis finally hits.

2. Clarify a timeline – Risks often emerge in a cyclical pattern. The rainy season suggests flooding potential, for example; certain building materials are expected to erode and fail within a known time. Establishing a calendar that identifies the details and occurrence periods of known liabilities facilitates an early planning period to reduce or eliminate the threats they pose.

3. Collect and evaluate relevant data. As noted above, it is likely that at least some of the Malibu rebuilders were not aware that the acreages they purchased were at risk of total loss caused by fire. Today’s advanced technologies can provide accurate and detailed data about past events and experiences. Predictive analytics can also elaborate on that data to suggest how future similar events might unfold, and what property owners might do to manage them.

4. These first three steps help to build the fourth: an ‘asset/liability matrix’ of the subject property and/or project. Home or business owners who’ve worked through these principles are now informed about the strengths and weaknesses of their project and can build those realities into their plan of action.

5. Anticipate and plan to mitigate future risks. In addition to alleviating apparent threats posed by fire to real and personal property, LA’s fire-affected property owners can also now extrapolate beyond these known quantities to identify as-yet-unidentified risks and threats that will likely arise from their new risk-informed perspective.

Seeing the Future: Build on New Knowledge

Disasters typically reveal interdependencies among services and systems where unknown risks come to light either during the event or after the crisis moment has passed. Weather-related events, for example, often interrupt multiple systems, leaving victims without access to numerous support and safety outlets. People who seek to rebuild should clarify the extent and context of already-known risks to establish a baseline for their expansion. Whether rebuilding a commercial site or a personal home, knowing how existing risks currently impact the four metrics set out below can inform the emerging risk management process:

a. Utility services such as electricity or water are usually the first systems to fail during a weather-related disaster for those within and outside the danger zones. Lack of light and communications connectedness pose risks of injury and loss even without a natural disaster happening nearby.
b. Road systems, too, can contribute to disaster-related chaos by being too narrow to manage the flood of evacuating vehicles or facilitate the passage of rescue trucks.
c. Communications are also often severely hampered during a disaster. Weather-related disasters frequently take out communications towers and power, eliminating access to critical information by both victims and response teams.
d. Post-disaster periods also threaten home and business owners directly impacted by fire or other ‘natural’ disasters:

i. Displaced people who’ve lost their homes often struggle to find temporary housing or shelter while their homes are out of commission. Lack of adequate transportation after the catastrophe can also hamper their efforts to get to safety.
ii. Lack of access to healthcare is also often a byproduct of a natural disaster. Injuries sustained during the crisis may not receive the care they need; ongoing medical conditions may be exacerbated as medication resources dwindle without access to medical personnel.
iii. Post-disaster environmental concerns can also pose significant threats to already ruined properties. In the LA hills, for example, mudslides, landslides, and debris flows typically occur when soils are eroded due to fire, rain, floods, etc.

Thousands of home and business owners have been directly impacted by the 2025 LA wildfires, suffering billions of dollars in damages. Those who are intent on rebuilding on or near their property should note all these existing and potential contingencies as they plan their rebuilding strategy. Doing so will (hopefully) reduce the potential of future similar losses or eliminate those threats altogether.