Cali-fate: the future of California
By Christine Benjamin and Dr Mark Hunter
The recent wildfires in California, particularly in Los Angeles, have caused unprecedented destruction, with estimates of over $250 billion in damages and economic losses. This disaster has led to the loss of thousands of structures and significant disruptions to local economies.
Rebuilding California's infrastructure is a monumental task that will require substantial investment and time. The future of California leans heavily on the regulatory constraints surrounding construction buildings.
Impact on Land Prices
The destruction of infrastructure and homes may lead to fluctuations in land prices. While some areas might experience a decline in property values due to perceived risks, others could see stabilization or even appreciation as rebuilding efforts progress and new safety measures are implemented.
Regulative Bureaucracy
California has so much bureaucracy that navigating through the regulatory protocols is exceptionally difficult, making it challenging to get any project done. For instance, ten years ago, over a billion dollars was dedicated to building a new reservoir. Unfortunately, because of regulatory issues, it was never constructed.
While there was a legislative push to build a reservoir, navigating the regulatory requirements proved to be impossible. Bureaucracy involved looking for certain worms, insects, and fish, as well as determining how soil is to be moved. The regulatory process was so overwhelming that the reservoir was never built. The regulative constraints in California are onerous and mind-boggling.
At one point, there was the 117-million-gallon Santa Ynez reservoir with potable water available to fight fires, but due to political mismanagement, the entire reservoir was drained and remained empty for over a year. This is why there was no water in the fire hydrants.
Permits to Rebuild
Now, this situation is going to cause significant problems, as most people tend to return to the scene of their losses. When you return to what’s left of your home or its rubble, you can’t rebuild unless you can navigate the astonishingly burdensome regulations. It will be nearly impossible to build with over 14,000 people putting pressure on bureaucrats with paperwork and actions to try to comply with these onerous regulatory requirements. The bureaucracy in California is so overwhelming that it could take up to ten years just to obtain the necessary approvals to build. Essentially, to keep your property—where you can’t live or rebuild—you will need to keep paying one of the highest property taxes in the nation for ten years or more, without having any structure on it, while you attempt to navigate the bureaucracy for approvals. And everyone will be trying to go through this process at once.
Permits to rebuild cont'd
Hiring a contractor to make modifications to your home, will require a permit, or several, as required by law. Generally, the state of California will require the following components before applying for a building permit:
Professionally drawn blueprint
Site plan
Floor plan
Foundation plan
Soil inspection and land survey
Architect license (required for homes over 3,000 sq. ft. and two stories)
Engineering license stamp
Manufacturers' engineering reports (Truss)
Title 24 state energy calculations
Even if you do the work yourself, you still need a building permit. If you make a mistake, the inspector will catch it and force you to make corrections for your own safety.
Remember, if you make modifications, renovations, or even a new roof to your home without a permit, you are liable for any problems it may cause—even if you don’t live there anymore. They will track you down years after you have moved out.
And if someone were to die due to your work, say from causing a fire, you could be charged with involuntary manslaughter. Additionally, if you rebuild, modify, or renovate your home without a permit and it causes a fire or other serious problems, the insurance company can refuse to cover the damage because you were the source of the liability. It’s all in your policy.
The Cali-fate
This means that the current post-apocalyptic scene in Palisades is likely to persist for a long time. It also suggests that people in their fifties and sixties will most likely sell their land and retire in a condominium or apartment somewhere else because the "Cali-fate" (future of California) is not bright; most senior citizens will likely pass away before California is rebuilt. Rebuilding California's infrastructure is a monumental task that will require substantial investment and lots of time.
This situation presents a lucrative opportunity for the big finance players who took over New Orleans after Hurricane Katrina. The big money consortiums like BlackRock, Vanguard, State Street, Hines, Nuveen, and PGIM are poised to buy up California just as they did in Hawaii after the fires and as they acquired over fifty percent of Ukraine after the Ukrainian currency devalued to 0.024 cents against the United States dollar. The Wall Street consortiums are certainly going to jump in, as "Cali-fate" is now a feast for the wealthy. The consortiums and insurance companies are preparing to acquire California at a discount for pennies on the dollar.
Senior citizens will offload their properties, as the bureaucracy is so overwhelming that it is impossible to rebuild within an adequate time frame that they do not have or are able to afford.
The United States has essentially facilitated the takeover by Wall Street firms. Already, BlackRock owns $11.5 trillion in real estate property.
