As California braces for yet another fire season—essentially year-round at this point—owners and operators of multifamily housing must prepare for increasingly volatile conditions. Beyond the immediate threat to life and property, wildfires and other natural disasters carry complex legal, financial and operational implications for developers, managers and investors alike.
According to the California Department of Forestry & Fire Protection, more than 4,100 wildfires have already burned more than 201,000 acres and destroyed 16,306 structures so far this year. The fires that swept through the Los Angeles area in January were fueled by a perfect storm of fire-friendly conditions. At least 30 people died, and more than 200,000 were forced to evacuate.
As wildfire activity continues to trend above normal in California, owners and operators of multifamily housing must accept climate volatility as a long-term reality, prioritizing resilience, regulatory compliance and tenant safety.
READ ALSO: CEQA Reforms Brighten California’s Housing Outlook
Protecting tenants: the first priority after a loss
In the aftermath of a disaster, ensuring tenant safety must be the first order of business for multifamily housing owners and managers. Beyond emergency repairs and structural assessments, landlords must navigate a complex web of legal obligations under California law, including habitability requirements, emergency relocation mandates, rent control and eviction protections.
Under the state’s Just Cause for Eviction law, as outlined within the Tenant Protection Act of 2019, landlords may be prohibited from terminating tenancies even after a major loss, unless specific statutory criteria are met. Many jurisdictions also impose rent stabilization rules that prevent rent increases on returning tenants after repairs are complete. Meanwhile, local ordinances may require emergency relocation assistance, including covering temporary housing costs, especially for rent-controlled or low-income units.
Immediately after a disaster, owners and operators of multifamily housing should conduct thorough habitability inspections and document all damage. It is important to consult legal counsel before entering units, issuing notices or making decisions about tenant displacement. Keeping tenants informed and supported in the early stages of recovery can significantly reduce liability and help restore trust.
Insurance markets in crisis
Over the past decade, several major insurance carriers have exited California or limited new underwriting in wildfire-prone areas. For multifamily property owners, the result has been skyrocketing premiums, non-renewals and an overreliance on the California FAIR Plan, the insurer of last resort.
Originally designed as a temporary safety net, the FAIR Plan has expanded far beyond its intended purpose. As of March 2025, the FAIR Plan has more than 573,000 fire insurance policies in force—a 23 percent increase from September 2024, and a whopping 139 percent increase from September 2021. Yet coverage is limited, costly and often inadequate for complex, high-value developments.
However, relief may be on the horizon. In late June, California Insurance Commissioner Ricardo Lara announced that the FAIR Plan would temporarily allow high-value commercial properties and affordable housing developments to insure up to $20 million per building, effective July 26, 2025. Lara also announced new transparency requirements, greater operational oversight and financial tools, such as access to credit and bonds. Lara has ordered investigations into claim denials and delays stemming from the 2025 Los Angeles wildfires, with a specific focus on smoke damage claims.
Most notably, insurers who wish to use advanced risk models or account for reinsurance costs must now agree to write policies in wildfire-distressed areas, a move aimed at rebuilding a competitive insurance market. Owners and operators of multifamily housing should review policy limits and exclusions carefully, exploring eligibility for expanded coverage under the 2025 reforms. And if your multifamily property is covered by the FAIR Plan, don’t treat it as a long-term solution.
Building code compliance and liability risks
The LA wildfires revealed the stark contrast between older structures and buildings built to modern codes. Fire scientists attribute the rapid spread of fire in the Palisades neighborhood to older homes igniting in succession. Homes built in the 1950s and 1960s were built before modern codes requiring fire-resistant materials.
California’s fire and seismic codes evolve regularly—particularly Chapter 7A of the Building Code, which governs construction in Wildland-Urban Interface zones. Developers and property managers must ensure not only that new construction complies with current code, but that renovations, additions and rebuilds after disasters meet updated resilience standards.
In fire-prone areas, materials like cementitious siding, tempered windows, non-combustible roofing and internal sprinklers may be required, even for low-rise multifamily structures. Legal and engineering teams should review code compliance early in the design phase, especially as local ordinances may exceed state requirements.
Documenting fire-resistant features, defensible space and emergency systems can support insurance negotiations. Some risk-based underwriting models offer premium reductions for properties with enhanced resilience.
Permitting bottlenecks and legal workarounds
Following the 2020 North Complex Fire, it took over a year in some counties to secure multifamily permits due to understaffed building departments. California’s environmental regulations and California Environmental Quality Act requirements added months to the permitting process. Local moratoria on new development in burn scar areas have further complicated recovery efforts.
But in late June, housing developers achieved a landmark victory when the California Legislature passed a budget bill that exempts most urban infill housing projects from the CEQA, ending decades of legal and political battles over the law’s role in slowing housing production. The new law removes CEQA’s litigation risk and environmental review requirements for qualifying apartment buildings, streamlining approvals and signaling a major shift in how California approaches a housing crisis made worse by wildfire losses.
Owners and operators of multifamily housing should work with legal counsel to explore options such as vesting tentative maps or phased environmental reviews to preserve project rights and timelines. After a disaster, developers may qualify for expedited permitting or exemptions under emergency declarations— these vary by locality and must be documented carefully to withstand later challenges.
Looking ahead: policy and preparedness
Housing policy discussions increasingly emphasize resilience and risk-based land use planning. For the multifamily industry, this means future development may hinge on a property’s risk profile, not just zoning. Legal teams should be at the table early—especially when acquiring, insuring, or redeveloping properties in hazard-prone regions. Developers and operators who plan now—structurally, financially, and legally – will be best positioned to withstand California’s next big disaster.
Ashley R. Fickel is a partner at Stinson LLP based in the firm’s Los Angeles office.
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