A controversial California bill that would have created a powerful “Resilient Rebuilding Authority” for the Los Angeles fires was put on temporary hold by state Sen. Ben Allen, D-Santa Monica, in response to widespread community concerns.
“I appreciate the input of the folks who have weighed in about the bill, and along with legislative colleagues have decided that it would be best for us to pause the bill until next year to give us more time to see if we can get it right,” said Allen in a statement on SB 549.
At the Assembly Local Government Committee hearing on Wednesday night, Allen conceded the bill’s lack of clear path for community input into the RRA’s decision making, while hinting at future changes to the legislation in 2026.
“I’m not looking to jam this down people’s throats,” said Allen. “On the community input question, it doesn’t cut out community input. It just doesn’t specify one path or another, so we’re going to have to build significant community input into the governance structure in order for this to pass the smell test with the locals.”
One of the bill’s two sections would create a Resilient Rebuilding Authority, which would be authorized to “purchase lots” for “land banking” and “open space,” buy and sell construction materials and equipment “in bulk,” deploy “subsidized financing,” and replace “affordable housing” lost in the Palisades, Eaton and Hughes fires.
Under the city of Los Angeles’ Ordinance 188481, in so-called “higher opportunity” areas such as the Pacific Palisades, all destroyed “protected” housing — which includes all apartments built before October 1978 — must be replaced by “low income units.”
This ordinance — modeled on state law — means that even if these rent-controlled, but not income-restricted units were legally occupied by households of moderate income or higher, these households may not be able to return to the rebuilt “affordable” units due if their perhaps modest incomes exceed the required low-income limit.
Gov. Gavin Newsom’s press office repeated the Los Angeles Times’ description of the RRA as “a new local authority” that would “buy burned lots, rebuild homes and offer them back at discounted rates to the original owners.”
It’s unclear how many homeowners who cannot afford to rebuild and would have sold to the RRA would have been able to afford to purchase the finished homes, even at discounted rates, given the high cost of construction in coastal Southern California. Before the fire, the median home listed in the Pacific Palisades for $4.6 million.
The bill’s second, and original, section would have updated NIFTI-2, a municipal financing mechanism for transit and “affordable housing.” Forty percent of the property-tax-based NIFTI-2 funds would have been required to be used for housing affordable to households making less than 60% of the median income, half of which must be spent on housing for the homeless or those making less than 30% of median income.
These required low-income housing projects would have been required to be within half a mile of a “major” public transit stop, a definition expanded on Jan. 1 to include bus stops at which at least two bus lines intersect, and buses stop at least every 20 minutes during rush hour.
With NIFTI-2 requiring another 10% of the funds be spent on beautification or “active transportation” such as bike or walking paths, the remaining half of NIFTI-2 funds can be spent on more “affordable housing,” transit and emissions reduction programs that reduce vehicle miles traveled.
This means NIFTI-2 funding could be used to increase bus service and thus more qualifying “major” transit stops where required NITFI-2 low-income housing can be built.
Notably, NIFTI-2 does not override local zoning, limiting the applicable scope of NITFI-2 housing projects to where local authorities authorize multifamily housing, or where pending state laws such as SB 79 might override local zoning.
Without the RRA and NIFTI-2, government funding for building low-income housing in the Los Angeles may for now have to rely more heavily on Newsom’s allocation of $101 million in taxpayer funds for “multifamily low-income housing development” that will “contribute to a more equitable and resilient Los Angeles.”
“Thousands of families – from Pacific Palisades to Altadena to Malibu – are still displaced, and we owe it to them to help,” said Newsom in a statement at the time. “The funding we’re announcing today will accelerate the development of affordable multifamily rental housing so that those rebuilding their lives after this tragedy have access to a safe, affordable place to come home to.”
With the $101 million likely to be quickly depleted, private donors were revealed as another potential funding source at the Assembly Local Government Committee hearing.
“There’s almost half a billion of philanthropic funds waiting to be invested in this area,” said Laurie Johnson, a member of the Los Angeles County Blue Ribbon Commission on Climate Action and Fire Safe Recovery at the hearing while advocating for the RRA. “This gives a centralizing place for that to go.”
