The Folly of Returning to Paradise

(Bloomberg Opinion) -- Paradise, California, is being rebuilt. Crews are removing millions of tons of debris left by the devastating Camp Fire last fall. The town council is holding public meetings to plan a new community. Developers are designing new homes. And somewhere off in the future, the next voracious wildfire awaits.

According to a state report, California’s fire season is now “almost year round.” More than 25 million acres of wildlands are under very high or extreme fire threat, and the high-risk area is home to 11 million people — one-quarter of the state’s population.

Climate change and continued development are intensifying the risk of living in the so-called wildland-urban interface. Fifteen of the 20 most destructive wildfires in California history have occurred in this century, 10 in the past four years.

And the fires are growing ever more costly. A total of 139 lives and tens of thousands of homes and businesses were lost in 2017 and 2018, as firefighting costs rose to $773 million, more than triple what they were in fiscal year 2013. Estimates of insured losses from 2018 wildfires exceed $12 billion.

The state’s largest utility has been a casualty. In January, PG&E went into bankruptcy, seeking protection from an estimated $30 billion in liabilities for its role in sparking wildfires. The state’s next largest utilities, Southern California Edison and San Diego Gas & Electric, have seen their bond ratings fall to near-junk status.

Some state firefighters, overextended and exhausted, have filed workers’ compensation claims for post-traumatic stress disorder.

Yet Paradise is rebuilding.

The impulse to do so is understandable: Home is a powerful concept. But state and federal policymakers have a responsibility to both safeguard lives and property and protect the public purse from excessive demands. For years, California leaders have mostly avoided drawing obvious conclusions about development in fire-prone areas.

In 2011 the legislature levied a small fee on residents of areas where the state, rather than local municipalities, is responsible for combating wildfires. Only about 800,000 households were required to pay the fee, which peaked at around $150. Yet complaints were great enough to persuade former governor Jerry Brown to rescind the charge. State and federal taxpayers, still on the hook for protecting homes in fire-prone areas, have not been granted such relief.

New homes in Paradise will have to conform to a 2008 state building code designed for fire zones. Requirements include double-paned windows with tempered glass and metallic mesh coverings on attic vents and roof coverings, to prevent the intrusion of wind-blown embers. The state also plans to more aggressively clear combustible forests.

But two essential policies seem to remain off limits: restricting development in high-risk areas and letting insurers charge premiums that accurately reflect the risk of wildfire.

True, California needs more housing. But it should be built in greater density in safe areas, not in fire zones. Until the state restricts unsafe development, its residents will continue to die in wildfires. Until it shifts more financial risk onto those who choose to live in fire zones, state and federal taxpayers, along with insurance buyers living in safer areas, will continue to subsidize reckless development. And the cost in lives and money will rise again when the fire returns.

Editorials are written by the Bloomberg Opinion editorial board.

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