It’s been over a year now since the Palisades and Eaton fires ravaged Los Angeles, claiming 31 lives directly, destroying around 13,000 residences (with some estimates as high as 16,000), and decimating community neighborhoods.
As Los Angeles had already been in a decades-long housing shortage, the loss of so many dwellings was an especially difficult blow to absorb.
Our early estimates projected a timeline of 15+ years for a full physical and economic recovery. So how are we doing one year into the process? Are we recovering as we should be? And what else can we do?
A Status Update on Rebuilding Los Angeles
Here is the status of the recovery efforts as of January 2026, according to data collected by the Associated Press:
- Fewer than a dozen homes have been rebuilt.
- Around 900 homes in the affected areas are under construction and on pace to be completed in 2026.
- Over 80% of “total loss” insurance claims are still unresolved, meaning funds have not been released to homeowners to begin the rebuilding process.
- More than 600 single-family lots in the affected areas have been sold, indicating that many owners do not intend to return to their communities.
How Expectations Compare to Reality
While the numbers may seem low, they’re actually in line with expectations.
Based on the situation immediately following the fires, we estimated that it could take a year or two simply to remove debris and conduct the environmental testing needed to ensure safe builds in the burn areas.
The fact that nearly 1,000 buildings are fully permitted and under construction is encouraging. It’s impressive that construction has already been completed on multiple homes!
We’re also encouraged by the streamlined permitting process in place, which is helping the permit office process applications roughly three times faster than the average time in the five years before the fires.
At this stage, the biggest concern in the bottleneck in the insurance claims processing. LA County is currently investigating State Farm Insurance, the largest private homeowners insurance provider in the area, due to complaints of claims being delayed, underpaid, and even denied.
There is also some concern about the availability of labor and materials once claims are settled and more widespread building is ready to begin. Despite the years that have passed since the COVID era, lead times for certain materials are still substantially longer than they were pre-pandemic. Furthermore, the shortage of skilled laborers and construction workers has been exacerbated by limited wage growth and changes to immigration policy.
How to Move Forward for a Stronger LA
Around 70% of the fire victims are still displaced. The goal is to create local housing quickly for all of those who want to return.
Firstly, resolving outstanding insurance claims will give homeowners access to the funds needed to rebuild. Without that financial foundation, even the best rebuilding policies will struggle.
Another practical step is to increase zoning flexibility. By allowing duplexes, triplexes, or small multi-family buildings on large lots that were previously limited to single-family homes, we can create more housing units more efficiently. This type of gentle density leaves the community character intact while providing faster access to local dwellings. Gatsby Investment specializes in this type of development, which helps to ease the heightened housing crisis while simultaneously providing strong returns for investors.
Of course, we also need to build more housing overall. That includes encouraging new residential construction, supporting infill development, and streamlining the development process. Gatsby’s Built-for-You program, for example, allows homeowners and investors to outsource the design and construction of new homes to the experienced developers at Gatsby. Expanding the workforce through training programs, apprenticeship pipelines, and balanced immigration policy can also help make sure that qualified labor is available once funding and permits are in place.
Nothing can fully replace the homes, neighborhoods, and lives lost in the Palisades and Eaton fires. But with thoughtful policy changes, coordinated rebuilding efforts, and a commitment to increasing housing supply, we can build a more resilient LA.