The fire just cost $250 Billion. Another disaster that could be 10X more expensive is looming . . .

Photo above - Let's play "Name that faultline." No . . . it's not the San Andreas fault. It's worse . . .

2 weeks now. The fire is still burning. The cost is estimated at $250 billion. Two more arsonists are in custody. How could it be so damn expensive? In addition to 12,000 homes with an average Zillow value of $2 million each, the fire destroyed a bunch of schools, shopping malls, office buildings, hospitals, museums . . . The entire Hunter Biden NFT art collection was destroyed. “Worth Millions of dollars” according to Hunter’s attorney, who had 200 unsold masterpieces stored in his basement, behind the furnace, for safekeeping. But his property insurer may balk at this self-reported valuation.

So, maybe the $250 billion estimate could be overblown, if this is how estimates are being made. But still, it’s an epic disaster.

But wait 'til insurance companies start looking at drone photos of the San Jacinto fault line. Picture above, link below. They could all rush for the exits immediately.

The chasm looks like a special effect from a blockbuster Hollywood film. “Earthquake Panic: Infinity War!” But apparently its completely real (sleuths, please determine if this just a BS deepfake). And the rift is growing so fast, it makes the pace of melting polar ice caps look positively glacial.

What happens when NOBODY wants to issue home insurance policies? Places like California, Florida, and Texas are constantly besieged by fire, earthquakes, tsunamis, oil spills, mega-storms, and electrical blackouts. There isn’t enough money in California's FAIR (subsidized) insurance fund. In fact, the FAIR fund went bankrupt about 1 hour into the first fire. It had only $300 million in reserves. Earthquakes are going to be completely off the table.

The solution is going to be ugly. People are going to have to make hard choices about how much they want breathtaking ocean panoramas, scenic woodland hillsides, and beachfront condos. And then they will have to pay for those features out of their own pockets. Just like people in Kansas pay for tornado insurance. If you want to own something nicer than what ordinary Americans have, it’s your responsibility to pay for it. Not stick it to the residents of some other city or state.

I’m just sayin’ . . .

California Is Splitting Apart: A Fault Line Is Forming Faster Than Anyone Predicted

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beckyromero · 36-40, FVIP

If you want to own something nicer than what ordinary Americans have, it’s your responsibility to pay for it. Not stick it to the residents of some other city or state.

You don't think "ordinary" Americans livein places like California, Florida, Texas and, yes, Kansas?

Also, don't inflate the cost of damage by property values. Much of that "value" is in the land, which is still there. Insurers don't insure the land under a house. They insure rebuilding the house/

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beckyromero · 36-40, FVIP

@SusanInFlorida

they don't have beachfront homes.

That really all depends on when they bought the property.

Ok, maybe not in Kansas. 😉

California doesn't reassess property until it sells. So, it's not uncommon out there for homeowners of 30 years or more to own properties they purchased on middle-class incomes that only high six-figure income earners could afford today.

Why do seniors such as them hold on to such high-valued properties? Because if they sold, they'd have huge capital tax bills.

Example:
https://www.realtor.com/realestateandhomes-detail/6651-Breakers-Way_Ventura_CA_93001_M24317-78731?from=srp-list-card

$1,899,000

2bed
2bath
783sqft783 square feet
3,400sqft lot3,400 square foot lot

6651 Breakers Way, Ventura, CA 93001

---

Look at the property & tax history history:
2012 taxes: $8,408 ... assessed at: $668,134
2010 taxes: $1,857 ... assessed at: $53,400

So, a reassessment occured in 2012 because of a sale .

12/7/2011 Sold $218,000

https://www.zillow.com/homedetails/6651-Breakers-Way-Ventura-CA-93001/16318921_zpid/

Now, according to the California Franchise Tax Board, the medium income in the state in 2011 was $34,684 for a single filer and $68,122 for joint returns.

With an income of $50K - $60K, a $200,000 mortgage in 2011 would have been quite affordable for a household with the state's medium income.

If the owner had kept the property and not made any additions to trigger a reassessment, property taxes could only increase a maximum of 2.5% per year.

SusanInFlorida · 31-35, F

@beckyromero "they don't reassess unless somebody sells". i wasn't aware. is this prop 9 or something?

then the fires could turn out to be a tax bonanza. 12,000 new structures, with new assessments. no wonder people like Billy Crystal were hanging onto mansions they bought 45 years ago.

beckyromero · 36-40, FVIP

@SusanInFlorida

Proposition 13 from 1978. That sparked a property tax revolt around the country.

Because of the fires, homeowners will be able to rebuild and still keep their old tax basis anywhere in the state. (as long as they don't go wild and build a bigger home than they had).

The reason people would hang onto properties is because if they sold under normal circumstances, they'd pay huge capital gains taxes (even with the single or married step-up basis).

And that goes for commercial land, too. Disneyland? No way could it remain in operation if all that land was reassessed every year.

The Dodgers former owner, Frank McCourt, kept 50% or 51% ownership of the parking lots to prevent a reassessment.

Here's an article about the Dodgers situation. Probably published around 2012.

https://gregorybecker.com/prop-13-dodgers-mccourt.html

Richard65 · M

I think that's a photo of the Pinglu Rift Valley, located in Shanxi Province China.

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