To Re-build or Not?

By Bob Hazard   |   May 24, 2018

Mark your calendars for June 11, 2018. That’s the expected date for the public release of the Federal Emergency Management Agency (FEMA) Flood Recovery Maps for Montecito. The map release will mark a critical milepost in making the rebuilding decisions that will shape the future character of Montecito for the next 50 years. 

FEMA Recovery Mapping 

According to Eric Simmons, FEMA regional representative in the Los Angeles office, “the FEMA Recovery Mapping for Santa Barbara County will serve as an important research document for re-building Montecito.” A preliminary draft of the recovery maps was delivered to the County last week for private comment, but County officials are restricted from making public comments at this time.

Partnering with the California Office of Emergency Services (Cal OES) and the County of Santa Barbara, the new recovery maps will delineate the boundaries of new “flood hazard zones” in Montecito, including projected flood level elevations, and the estimated velocity of future creek flows. The maps, based on 100-year flood projections, are expected to reflect certain wider flood zones, rechanneled watercourses, and creek banks that overflowed by as much as 20 feet during the January 9 devastation. Peak creek flows are expected to be 1.7 to 2.6 times higher than the pre-burn flows, according to FEMA’s Simmons. 

Building Requirements

Homeowners in flood-prone zones will be required to re-build to stronger, safer, and less vulnerable standards. These requirements will include elevating their structures by at least two feet above FEMA’s base flood elevation (BFE) and relocating homes farther away from new creek beds.

Breakaway walls that are intended to collapse under water and debris loads without danger to the elevated portion of the residence will be encouraged, if not required. The same is true for the use of flood pilings or supporting columns to ensure future flood safety. These flood mitigation improvements, plus required building code upgrades, are expected to inflate Montecito re-building costs.

The Case for Rebuilding

477 structures in Montecito have been identified as damaged or destroyed by the debris flow. Of these, 247 were red-tagged as destroyed, including 153 homes, 22 businesses, and 72 garages and guest houses. An additional 155 structures were yellow-tagged as heavily damaged, while 220 structures were identified as green-tagged or less damaged. There has been some reduction in these numbers due to re-categorization since the initial designations were issued, but there is no escaping the fact that 477 of our neighbors are facing one of the more critical decisions of their lives – one that will greatly affect the future of this community – to rebuild or not to rebuild?

Last week, a sympathetic County Board of Supervisors (BOS) extended the “like-for-like” re-building code adopted after the Tea Fire to include homes lost in the Montecito debris flow. County case workers and the County planning commission professionals will make the call as to whether the re-build is “substantially like-for-like” and therefore free from design review by the Montecito Architectural Board of Review (MBAR). A building permit would still be required, but neighbor input would be greatly restricted.

Covering the Cost 

Homeowners who hope to rebuild are reporting that insurance carriers have been playing a waiting game.  Out-of-state adjusters seek quick, low-ball settlements with policyholders. Adjusters delay settlements for those who wait, hoping that delay works to their advantage. Terrified homeowners face a ticking time clock; at the end of two years or fewer, homeowners must settle or face paying both a mortgage payment on their uninhabitable home, plus rent for temporary housing.

Frequently, homeowners who refuse to settle endure a change in adjusters forcing them to start the painful negotiation process all over again. Removal of private mud has been a sticky mess, with most policyholders reporting reimbursements of 70% of costs or less. Some residents who hire attorneys are met with insurance adjusters who immediately stop all negotiations. Other policy holders turn to public adjusters who typically take 10% of reimbursements, on the theory that it is better to receive 90% of a fairer adjustment than 100% of a low-ball offer.

Adjusters were initially offering homeowners insurance reimbursements in the neighborhood of $250 per square foot, but that’s totally unrealistic in Montecito where a minimum of $500 per square foot is needed to interest an architect or a contractor in rebuilding. Many say that with the high demand and the new construction requirements, the true cost of rebuilding in Montecito will be in the range of $750 to $1,000 per square foot. 

Future Insurance Rates

It is expected that mortgage lenders will require flood insurance in areas of high risk as defined by the FEMA maps. Affordable flood insurance for property owners, renters, and businesses in Montecito will likely be limited to FEMA’s National Flood Insurance program with a maximum building structure coverage of $250,000, plus up to $100,000 for a separate contents policy.

Private insurance companies are expected to use the FEMA maps to determine whether to exit the Montecito market, raise future rates, or continue present coverage. The case for increased insurance costs and fewer companies willing to insure seems to be the stronger one.

Rebuilding Safely

Unfortunately, fire and flood experts from Cal Fire, FEMA, and the U.S. Forest Service report that vegetation re-growth above Montecito has been only 5% to 10% of the expected recovery rate due to dry soils, a hot fire, soil loss in the debris flow, and late rains. The BAER (Burn Area Emergency Response) report regarding the probability of damage or loss from future debris flows for Montecito, rates the threat level as “Very Likely.”

Neither hydro-mulching nor reseeding is viewed as feasible this year because the burn areas above Montecito are too steep.  Native plant seed is available in the soil, but the lack of rainfall has prevented germination.

Montecito’s Debris Basins

The giant 208,000-cubic-yard Santa Monica Creek debris basin, built by the federal Natural Resources Conservation Service after major flooding within the Franklin and Santa Monica watersheds in Carpinteria in 1969, is considered “the Crown Jewel of the Santa Barbara Flood Control District.”

The Santa Monica Creek debris basin did its job, catching the flow of boulders, trees, and utility poles tumbling down creeks on January 9. According to Tom Fayram, Santa Barbara County deputy director of Public Works for Flood Control, “The basin filled to an estimated 50-feet deep with material that would otherwise have damaged or destroyed Carpinteria.”

By comparison, the six puny creek debris basins above Montecito provided scant protection. In 2016, the National Marine Fisheries required fire and flood professionals to close the San Ysidro and Cold Spring Creek debris basins above Montecito. Fortunately, these closures have now been put on hold, upsetting fish people, but pleasing Montecito homeowners who realize that our existing debris basins are inadequate and inconsequential without major re-engineering.

Potential improvements to the debris basins are now under discussion by County Flood Control for at least the San Ysidro, Cold Spring, and Romero Creeks. 

Future Options 

Homeowners in Montecito’s flood zones appear to be receiving insurance reimbursement offers of $400 per square foot or less, well below the current costs for re-building. There appears to be little or no reimbursement offered for lost landscaping. Insurance disputes over stone walls, gates, and other destroyed structures are common. Reimbursement offers for mud removal have also been typically less than costs. Outlays for homeowner documentation, reconstruction estimates, legal expenses, and personal adjuster fees are seldom reimbursed.

Insurers who paid for hotel stays during mandatory evacuations in 2017-18 will be less likely to pay for next year’s evacuations. Linkages to the Thomas Fire by the January 9 debris flow will be a year older and weaker. Multiple evacuations will each be subject to standard deductions.

Mortgage rates reached a seven-year high of 4.8% in April. Property taxes on rebuilt homes will be subject to current value property tax assessments. Both raise rebuilding costs.

Options for property owners include: 1) re-building at a higher cost; 2) waiting five years and do nothing now; 3) sell their broken homes and building parcels at a discounted price; 4) work cooperatively with neighbors in an effort to recover the full value of home, possessions, and land through possibilities such as “inverse condemnation”; 5) lobby local, regional, and national government agencies for publicly funded solutions that mitigate the possibilities of future loss of human life and the destruction of homes and businesses.

Whatever choice homeowners make will be painful and unprecedented. Come November, we should all pray for a relatively dry rainy season, as it looks like we’ll need at least one, probably two of those before things are comfortably behind us. Additionally, if and when we have a forecast of heavy rain, residents should heed any and all evacuation mandates.


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