Thousands of proposed homes approved by past San Diego County supervisors remain in limbo amid legal fights and shifting politics.
Even if the projects eventually clear those hurdles, the odds that they won’t get built are growing for another reason: the shrinking availability and increasing cost of insurance.
Not many years ago, some insurance companies began declining homeowner insurance policies in some of California’s high-risk fire zones. That’s the designation given the largely open rural land in San Diego County targeted for the planned subdivisions.
The severity of that problem ratcheted up with the recent news that State Farm and Allstate no longer are offering new homeowner and commercial property insurance policies across “disaster-prone California,” as one news organization put it.
That term may seem like a bit of hyperbole, but the increasing intensity and size of wildfires and flooding exacerbated by climate change has defined the state of late.
Those threats are only projected to become worse, as are insurance company losses. That may force the hands of state and local government officials to adopt stronger policies long talked about but mostly avoided — prohibiting building on land with great risk of fire, floods or coastal erosion.
The bottom line is lenders require property insurance to obtain a mortgage. No insurance, no mortgage. In areas where insurance companies won’t provide coverage, options become slim and expensive.
The unavailability of property insurance could be the final nail in the coffin of California’s tradition of building large subdivisions on what once was rural property and maybe some ocean bluffs.
Recently, the county Board of Supervisors changed direction. The thousands of homes planned beyond the urban fringe in unincorporated areas under county control were approved by a Republican-dominated board nearly five years ago.
A subsequent board with a Democratic majority, under pressure from the state and legal challenges, last year approved a broad plan that seeks to cluster projects near already developed areas. (The board, which has a vacancy, currently is split 2-2 between Democrats and Republicans.)
A main thrust of the plan was to limit — or require offsets for — automobile tailpipe emissions that create global-warming greenhouse gases.
Climate change also was central to a lawsuit that has blocked a 1,119-home development called Adara at Otay Ranch east of Chula Vista.
In his October 2021 ruling, San Diego Superior Court Judge Richard Whitney sided with the Sierra Club and other environmental groups opposing the project, citing concerns not only about greenhouse gas emissions, but also wildfire threat and a lack of affordable housing.
California Attorney General Rob Bonta had joined the lawsuit to stop the project.
“California is on track for yet another record-breaking, climate-fueled wildfire season,” Bonta said in a statement after the ruling. “As these mega-disasters become the norm, it is more critical than ever that we build responsibly. We can’t keep making the same mistakes. The land use decisions we make now will have consequences for years and decades to come.”
Today, that debate no doubt would include the availability and cost of insurance.
But the San Diego region and the entire state are in the throes of a housing affordability crisis. Building more housing, which advocates say would take pressure off costs, has proved difficult in and near existing communities.
The resistance from residential groups and sometimes their elected representatives has stymied many such efforts despite local and state policies to encourage home construction.
But housing needs to go somewhere, and so-called “greenfield” undeveloped land is increasingly off limits because of government policy, insurance risk or, likely, both.
Promises of greater protections with setbacks, firebreaks and fire-resistant building materials aren’t the development deal-maker they once were in high-fire zones.
The insurance predicament is putting pressure on governments to step in. An increasing number of people have tapped the state-controlled insurance of last resort — Fair Access to Insurance Requirements (FAIR) plans. But policies through that program, funded by insurance companies, are typically more limited and expensive than those on the open market.
There also has been discussion of action at the federal level. But resistance is growing over taxpayers subsidizing insurance costs and footing the bill to clean up weather-related disasters that are becoming worse and more frequent.
That’s also driving debate about where to focus new construction, and even whether to move existing development.
California isn’t alone, of course. Some insurance companies have pulled out of or significantly raised rates in Colorado, Florida and Louisiana. That list could grow, eventually.
The wildfires raging in eastern Canada gained attention in large part because of the heavy smoke that drifted down into the U.S. But they also were seen as a precursor of things to come.
The summer wildfire outlook from the National Interagency Fire Center forecasts above-normal wildfire threat for the northeastern and upper Midwest states and the Pacific Northwest. The California forecast is mostly normal, with northern and eastern regions below normal.
Critics say insurance companies are either cherry picking by limiting coverage to safer areas or using their withdrawals as leverage for rate increases and looser regulations. The companies say their losses, and restrictions on raising rates in some states, are unsustainable.
Regardless, insurers increasingly are factoring climate change into risk assessments, and that’s affecting areas not traditionally known for wildfires or flooding.
The 2021 Marshall fire near Boulder, Colo., destroyed more than 1,000 structures, most of them homes, and burned a shopping center — causing an estimated $2 billion in damage.
Investigators suggest the fire was sparked by a power line and a days-old bonfire whipped up by strong winds.
Yet USA Today noted the Dec. 30 fire burned across a field of tall grass that normally would have been covered with snow at that time of year.
