You’ve got to give Megafire Action much credit for thinking up creative interventions. Home hardening through making it so homeowners can more readily access funding and contractors for doing the work is one challenge. As for me, I’d be happier with many state programs testing different approaches than one federal program to address these problems.
From an email message from one of their policy folks on their testimony on a bill..
One of the issues is that there is not a universally accepted “standard” or “certification” for home hardening. We have IBHS base and plus but the state doesn’t recognize those, the Safer From Wildfire Regs are basically an ala carte approach, and so it’s challenging for homeowners to understand what exactly they must do.
We support the development of a certification program that makes clear what scopes of work project managers or contractors need to achieve, clear what kind of insurance discounts can be expected, etc.
Easy to navigate also may include technology pathways that connect homeowners and contractors that are qualified to do this work to the selected standard, so that folks fon’t have to “open the phone book” so to speak for 5+ contractors.
Here’s a memo from them with more detail. There are so many bills, I get distracted by the numbers, and this memo goes to the ideas.
The problem
CAL FIRE estimates that 2.12 million homes sit within the highest fire hazard areas, the vast majority of which were built before modern wildfire construction standards.
1 Home hardening can more than double the odds of a home surviving a wildfire and can disrupt urban conflagrations.
2 However, adoption remains dangerously low, with 50% of homeowners in high-risk areas citing cost as the biggest barrier to home hardening.
The current grant-based approach—serving just 155 homes in five years 3—cannot scale to meet the state’s wildfire risk. A new approach is urgently needed to expand state capacity.
The opportunity
California can adopt a homeowner assistance model capable of reaching tens of thousands of homes (see Table 1 below) within the next few years through three key elements:
1) Reposition ember resistance (IBHS Essential) as the target standard (~$15k retrofit)
2) Leverage proven loan financing models that stretch state dollars (SB 894)
3) Recalibrate CWMP to complement loans with smaller, targeted grants
Many of you know that I am skeptical of financing creativity, with concerns that it lines the pockets of middlepeople at the expense of those it’s intended to help. However, I’m also pragmatic, and if this has proven itself with the GoGreen financing platform.
Leverage proven loan financing models that stretch state dollars (SB 894) California needs a financing model that can stretch limited public dollars to reach tens of thousands—not hundreds—of homeowners. SB 894 would establish the California Wildfire Resilience Loan Program, administered by the California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) and modeled after the State Treasurer’s successful GoGreen financing platform. The bill creates a loan loss reserve that leverages public (or private) dollars at roughly 12-to-1 to unlock private capital, dramatically lower interest rates for homeowners, and finance home hardening and defensible space improvements across residential and small business properties. A revolving loan structure recycles repayments to support new lending, allowing modest public investment to unlock substantial private financing and scale mitigation to hundreds of thousands of homes statewide. Additionally, CAEATFA has the administrative expertise to stand up such a program with low overhead, and private creditors can process demand without state resources (Department of Finance estimated $3.9 million in the first year for operational costs to establish the Wildfire Mitigation Loan Program to serve 1,000 homes; crucially,
additional funds would be needed to capitalize the loan loss reserve fund).Under SB 894’s roughly 12:1 leverage structure, about $1,250 in public credit support could help finance a 5-year, low interest $15,000 IBHS Essential retrofit loan. Because more than 98% of loans are expected to be repaid (current GoGreen rate), the same public dollars can finance thousands more homes over time, dramatically expanding statewide reach.
And here’s a screenshot of the GoGreen site:
Circling back to my first post today, it’s hard for me to see how more climate-WUI modeling would have helped these policy makers.
I may have gotten lost going around in circles, but it looks like these policy-makers assume that there is a risk that needs to be mitigated somewhere. Climate-WUI modeling would help them decide where the policy should apply. (Same for insurance companies.) The bottom line seems to be a need for information to inform real estate buyers and owners what their risk is so they can make intelligent decisions about what to do about it.
My wildfire friends tell me that insurance companies already have better models than anyone else ($ in it). Which is no doubt reflected in insurance rates, if you can get insurance.
Proprietary, no doubt. It still seems like some kind of collaboration is warranted.