Locals are fleeing and property values are plummeting as star-studded Malibu has made little to no progress rebuilding after the devastating Palisades Fire.
The blaze, the most destructive fire in Los Angeles history, erupted in January and destroyed more than 6,800 homes and buildings across southern California.
Malibu alone saw roughly 720 properties burned to rubble in the infernos and now, more than 10 months later, the once-luxurious celebrity enclave remains fire-torn.
City officials have only issued four rebuilding permits so far, the LA Times reported, which allegedly only accounts for about 2 percent of the total applications received.
Authorities in Altadena and the Pacific Palisades, which were hardest hit by the fire, have already issued hundreds of permits, state rebuilding data showed.
Malibu locals, however, fear that at the current pace, rebuilding may take more than a decade and have started putting their properties up for sale.
But experts warn ‘supply is exceeding demand’ and burned up lots are being listed at discounted rates of 20 to 60 percent, according to the newspaper.
Around 75 lots have sold in Malibu since the deadly blaze, but sales are slowing down and 47 percent of the 160 remaining listed lots have dropped in price.
The devastating Palisades Fire, the most destructive blaze in LA history, turned roughly 720 Malibu homes into rubble, including this residence situated along the Pacific Coast Highway
Now, more than 10 months since the fire, only four rebuilding permits have been issued, state data showed. Pictured is a Malibu beachfront home destroyed in the Palisades Fire
The ritzy, elite Malibu community is home to numerous celebrities including Beyoncé and Jay-Z, (left, together in February) who own a $200 million mansion on the stretch of beach known as Paradise Cove. Cher (right, pictured in July 2024) also owns a $75 million home in the area
A 3.25-acre lot that previously housed record producer David Foster’s Mediterranean mansion is currently listed for $16 million.
But realtor Daniel Milstein, who said the property was listed for $35 million before the blaze, is now planning to lower the asking price to $12 million.
He said that although the lot is ‘worth a lot more,’ the nuanced building regulations in Malibu and limited number of approved permits have caused a ‘setback in the market.’
Former Los Angeles Dodgers owner Peter O’Malley is also preparing to take a hit on the sale of his Malibu mansion.
He first listed the Mediterranean-style compound, which sits on a 2.27-acre bluff overlooking the Pacific Ocean, for $85 million last year, Mansion Global reported.
The residence was taken off the market in February, following the fire, but was relisted on Tuesday for $74.5 million.
O’Malley’s property, which is situated on the stretch of beach known as Paradise Cove, is one of the ‘bigger houses’ in the cove.
Beyoncé and Jay-Z reportedly own a $200 million mansion located just down the road from O’Malley’s estate.
Destroyed homes along Pacific Coast Highway in Malibu during the Palisades Fire on January 9
Pictured is the rubble, as seen on May 28, where oceanfront properties once stood along Malibu’s Big Rock Beach
A construction crew works on a cement piling for a sea wall on October 16 at a beachfront lot in Malibu where a home destroyed by the Palisades Fire once stood
Cher has also owned a mansion in the area for three decades. The home was put on the market for $85 million in 2022 but failed to sell, then re-listed the next year for $10 million less. In February, it was reported that the singer still lives at the home.
O’Malley’s realtor Kurt Rappaport told Mansion Global that he has seen an ‘uptick in activity in Malibu’ and stated that ‘life and the market are getting back to normal’ – but many locals vehemently disagree.
One homeowner whose residence was ravaged in the blaze said their rebuilding permit ‘still hasn’t gotten approved’.
The Malibu resident, who said they applied for the permit in spring, told the Times they planned to rebuild the exact same house that stood on the lot before.
However, the homeowner claimed the rebuild application was returned because the plan did not comply with FEMA’s heightened flood elevation standards.
‘I have friends a few miles east in Pacific Palisades who are starting to build already,’ the frustrated homeowner added, calling the rebuilding situation ‘a nightmare.’
Cher has also owned a mansion, previously valued at $85million, in the area for three decades
Real estate mogul Grant Cardone has also been impacted by the updated FEMA policy and may be forced to demolish his home, even though it survived the blaze.
His home only sustained smoke damage in the fire and is a ‘perfect structure,’ Cardone told KTTV.
But FEMA’s new rules state that homes needing repairs that exceed 50 percent of their value must comply with the flood policy, so he may be facing demolition.
‘This is beyond insanity,’ Cardone said. ‘None of this was fire-damaged. I’ve never been threatened by water, never had a flood, never had any risk of water in my home.’
Malibu has also issued costly new septic standards which will require rebuilders to spend hundreds of thousands of dollars on replacement wastewater treatment systems.
Additionally, locals are concerned that by the time they complete their rebuilds, the community will have a completely different vibe.
Scorched wooden steps to the beach remain as construction crews on October 16 worked to build a seawall in front of a beachfront lot in Malibu
Crews were seen on October 16 working on a cement piling for a sea wall in Malibu
Locals are concerned that by the time they complete their rebuilds, the Malibu community will have a completely different vibe. Pictured are beachfront lots destroyed by the Palisades Fire as seen on October 16
They are fearful that burned out lots will be snatched up by wealthy foreigners and development groups and turned into Airbnbs.
New Zealand-based billionaire brothers Nick and Mat Mowbray are thought to be among those who have bought up land, reportedly spending $65 million on plots along the Malibu coast.
The Mowbrays have been linked to nine property deeds and state registration statements since March this year, The New Zealand Herald reported.
But insiders claimed they intend to buy a total of 14 lots and ‘redevelop them with like-for-like houses.’
The pair, who reportedly plan to manufacture cut-price factory-built houses on the lots, want the homes to be available to customers within three years.
Construction workers rebuild an oceanfront home amid cleared lots and sparse construction after the Palisades Fire in Malibu’s Sunset Mesa neighborhood on October 16
A view of cleared lots and sparse construction in the Sunset Mesa neighborhood of eastern Malibu on October 16
A view of destroyed beach-front properties remaining construction-free after the Palisades Fire destroyed them
Yolanda Bundy, Community Development Director at the Malibu Rebuild Center, argued the city’s collective rebuild is further along than residents believe.
Although only four permits have been approved, she claimed around 80 have already passed the ‘planning phase and entitlement’ of the application process.
Once the applicants pass the second phase, building and safety review, they can begin to rebuild their homes.
She acknowledged that residents are ‘frustrated’ by the situation, but told the Times officials are ‘doing our best to get them home.’
Meanwhile, a suspect in the deadly Palisades Fire was ordered to be moved to California from central Florida last week.
Federal officials have said Jonathan Rinderknecht, who lived in Southern California at the time of the blaze, started a small fire on New Year’s Day.
That fire smoldered underground before reigniting nearly a week later on January 7 and roaring through the coastal Pacific Palisades and Malibu.
Jonathan Rinderknecht has been indicted on one count each of destruction of property by means of fire, arson affecting property used in interstate commerce and timber set afire
He was arrested earlier this month along Florida’s Space Coast, where he had been living in his sister and brother-in-law’s house for the past five months.
A grand jury in Southern California has since indicted him on one count each of destruction of property by means of fire, arson affecting property used in interstate commerce and timber set afire.
His next hearing will be an arraignment in Los Angeles in the upcoming weeks, according to federal prosecutors.
