Hillside resident E.V. walks around his neighborhood Tuesday, Jan. 14, 2025, off Rambla Pacifico Street where most homes burned to the ground after the Palisades Fire.
Los Angeles, California – A new bill moving through the California Legislature aims to reshape how post-disaster recovery is financed—by allowing property tax revenues to help rebuild communities destroyed by wildfires, while also directing that funding toward new low-income housing.
Senate Bill 549, already passed by the State Senate and scheduled for a hearing this week at the Capitol, would create a new model for disaster recovery in Los Angeles County, one that leverages property tax allocations to fund a local “Resilient Rebuilding Authority” (RRA). The RRA would be empowered to manage and distribute funds from a wide array of sources—including tax-increment financing, state and federal grants, and philanthropic contributions—with at least 40% of that funding legally required to go toward the development of low-income housing.
The measure is a response to the devastation caused by the Palisades, Eaton, and Hughes wildfires, which burned through residential neighborhoods and wiped out vital affordable and senior housing stock. As part of his proposed recovery strategy, Governor Gavin Newsom has earmarked $101 million for multifamily low-income housing development in the impacted areas.
The bill also revises the state’s existing Neighborhood Infill Finance and Transit Improvements Act, or NIFTI-2. Under current law, cities and counties can create Enhanced Infrastructure Financing Districts (EIFDs) that receive revenue from local sales and use taxes. But SB 549 changes that formula: starting in 2026, cities and counties would instead be allowed to allocate property tax revenues to these districts, rather than sales tax revenue, and the previous requirement that district boundaries match the city or county lines would be repealed. That would provide greater flexibility in defining where recovery investments are focused—and who benefits.
The language of SB 549 is explicit about its purpose. In addition to prioritizing low-income housing, the bill calls for the rebuilding of lost rental stock, housing for seniors, and the replacement of other affordable units destroyed in the wildfires. The idea is not just to restore what was lost, but to build something more equitable in its place.
If passed, the legislation would mark a shift in how California handles the intersection of disaster recovery, infrastructure financing, and housing inequality. With wildfires increasingly becoming a permanent feature of the state’s landscape, lawmakers appear to be laying the groundwork for rebuilding communities with resilience and inclusion in mind. But the debate now moves to the Assembly, where lawmakers will weigh whether this new approach can meet the moment—and whether it should become a model for post-disaster recovery statewide.
