homeowner

SACRAMENTO — Gov. Gavin Newsom will propose a new $100-million fund to help wildfire victims afford loans to rebuild their homes under a revised budget plan set to be released Thursday.

The Newsom administration estimates that thousands of victims of the Los Angeles wildfires cannot afford to rebuild, blaming a lack of access to affordable loans and a gap between insurance payouts and the cost to build again.

“We have been on the ground in L.A. since Day One of recovery from these fires, and we aren’t turning our backs now,” Newsom said in a statement. “This community deserves continued support to help them get back on their feet, and rebuild their homes and their lives. “

The new fund would be designed to cover loan-loss guarantee to lenders, in which the state would commit to paying back a percentage of a loan amount if a borrower defaults, in order to lower the risk for lenders and encourage them to award construction loans to borrowers who might not otherwise qualify or only be eligible for loans at high interest rates. The money would also be available for homeowners to buy down their interest rates during the construction period, according to Newsom’s office.

The Eaton and Palisades fires killed 31 people and destroyed over 16,000 structures in January 2025.

A recent survey of the wildfire victims found that homeowners estimate they need more than $600,000 on average above their insurance payouts to rebuild their homes, according to a report from a wildfire recovery nonprofit called the Department of Angels. The gap in Altadena was about $550,000, and between $1.19 million and $1.73 million in Pacific Palisades and Malibu.

Under Newsom, California has also provided mortgage relief to more than a thousand wildfire survivors under CalAssist, a program that provides grants to eligible homeowners to cover mortgage payments for 12 months up to $100,000.

The governor’s new proposal will be included in his funding plan for the upcoming 2026-27 budget year that begins July 1.

State revenue from income tax collection is higher than initially forecast, a boon that is expected to wipe out a projected deficit in the year ahead. Analysts attribute the revenue increase to an artificial intelligence boom in the stock market.

Though likely temporary, the extra funding is expected to give Newsom enough cushion to balance the state budget without major cuts and lower a projected shortfall in 2027-28.

The proposal to create the rebuilding fund requires support from both houses of the California Legislature and would move forward as a trailer bill accompanying the state budget. The funding would be available to disaster survivors, though details on eligibility will be determined during the legislative process.

Eaton wildfire survivors’ anger about Southern California Edison’s burying of electric wires in Altadena boiled over Tuesday with residents calling on government officials to temporarily halt the work.

In a letter to the Los Angeles County Board of Supervisors, more than 120 Altadena residents and the town’s council wrote that they had witnessed “manifest failures” by Edison in recent months as it has been tearing up streets and digging trenches to bury the wires.

The residents cited the unexpected financial cost of the work to homeowners and possible harm to the town’s remaining trees. They also pointed out how the work will leave telecommunication wires above ground on poles.

“The current lack of coordination is compounding the stress of a community still reeling from the Eaton Fire, and risks causing further irreparable harm,” the residents wrote.

The council voted unanimously Tuesday night to send the letter.

Scott Johnson, an Edison spokesman, said Wednesday that the company has been working to address the concerns, including by looking for other sources of funds to help pay for the homeowners’ costs.

“We recognize this community has already faced a number of challenges,” he said.

Johnson said the company will allow homeowners to keep existing overhead lines connecting their homes to the grid if they are worried about the cost.

Edison’s crews, Johnson said, have also been trained to use equipment that avoids roots and preserves the health of trees.

The utility has said that burying the wires as the town rebuilds thousands of homes destroyed in the fire will make the electrical grid safer and more reliable.

But anger has grown as work crews have shown up unexpectedly and residents learned they’re on the hook to pay tens of thousands of dollars to connect their homes to the buried lines.

Residents have also found the crews digging under the town’s oak and pine trees that survived last year’s fire. Arborists say the trenches could destroy the roots of some of the last remaining trees and kill them.

Amy Bodek, the county’s regional planning director, recently warned Edison that a government ordinance protects oak trees and that “utility trenching is not exempt from these requirements.”

Residents have also pointed out that in much of Altadena, the telecom companies, including Spectrum and AT&T, have not agreed to bury their wires in Edison’s trenches. That means the telecom wires will remain on poles above ground, which residents say is visually unappealing.

“While our community supports the long-term benefits of moving utilities underground, the current execution by SCE is placing undue financial and planning burdens on homeowners, causing irreparable harm to our heritage tree canopy, and proceeding without adequate local oversight,” the residents wrote.

They want the project halted until the problems are addressed.

Edison announced last year that it would spend as much as $925 million to underground and rebuild its grid in Altadena and Malibu, where the Palisades fire caused devastation.

The work — which costs an estimated $4 million per mile — will earn the utility millions of dollars in profits as its electric customers pay for it over the next decades.

Pedro Pizarro, chief executive of Edison International, told Gov. Gavin Newsom last year that state utility rules would require Altadena and Malibu homeowners to pay to underground the electric wire from their property line to the panel on their house. Pizarro estimated it would cost $8,000 to $10,000 for each home.

But some residents, who need to dig long trenches, say it will cost them much more.

“We are rebuilding and with the insurance shortfall, our finances are stretched already,” Marilyn Chong, an Altadena resident, wrote in a comment attached to the letter. “Incurring the additional burden of financing SCE’s infrastructure is not something we can or should have to do.”

Other fire survivors complained of Edison’s lack of planning and coordination with residents.

“I’ve started rebuilding, and apparently there won’t be underground power lines for me to connect with in time when my house will be done,” wrote Gail Murphy. “So apparently I’m supposed to be using a generator, and for how long!?”

Johnson said the company has set up a phone line for people with concerns or questions. That line — 1-800-250-7339 — is answered Monday through Saturday, he said.

Residents can also go to Edison’s office in Altadena at 2680 Fair Oaks Avenue. The office is open Monday to Friday from 8 to 4:30.

It’s unclear if the Eaton fire would have been less disastrous if Altadena’s neighborhood power lines had been buried.

The blaze ignited under Edison’s towering transmission lines that run through Eaton Canyon. Those lines carry bulk power through the company’s territory. In Altadena, Edison is burying the smaller distribution lines, which carry power to homes.

The government investigation into the cause of the fire has not yet been released. Pizarro has said that a leading theory is that a century-old transmission line, which had not carried power for 50 years, somehow re-energized to spark the blaze.

The fire killed at least 19 people and destroyed more than 9,400 homes and other structures.