Despite his bullish stance on improving housing affordability across the Golden State, Gov. Gavin Newsom has refused to back off from his controversial decision to block duplexes in the Pacific Palisades wildfire rebuild. And now, his former allies are taking him to court.
YIMBY Law, a pro-housing organization, filed suit last week in Los Angeles County Superior Court, arguing that Newsom’s order illegally narrowed homeowners’ rebuilding options by letting local governments suspend key parts of Senate Bill 9, the 2021 upzoning law that allows duplexes and single-family lot splits across the state.
But Newsom and Palisades residents are adamant that this type of construction would destroy the neighborhood’s character and even deepen the danger of wildfire by adding density to a high-risk area.
The battle comes at a time of steep affordability concerns for the state and wildfire-affected areas. Los Angeles is woefully behind on a housing target of adding over 450,000 new housing units by 2029. As of October, just 1,320 permits have been issued throughout Altadena and the Palisades to rebuild the more than 11,000 homes that were destroyed by the fires.
The question underneath the legal fight is as much about ideology as it is affordability: In a rebuild defined by soaring costs, who will be able to afford to come back?
What happened and what the executive order actually does
YIMBY Law’s lawsuit targets a July executive order issued by Newsom that curtailed the use of Senate Bill 9 in neighborhoods damaged by wildfires. The group argues the order went beyond emergency response by allowing local governments to block a state housing law designed to expand rebuilding options.
Under the order, Newsom temporarily suspended SB 9’s key provisions in Very High Fire Hazard Severity Zones through Aug. 6, 2025. After that date, SB 9 can apply again only if local governments choose to allow it, because the order lifts state limits on how much discretion cities and counties can exercise over SB 9 projects.
The executive order also waives review under the California Environmental Quality Act for any local rules adopted to implement those restrictions. Following the order, Malibu, Pasadena, and Los Angeles County all moved to bar SB 9 rebuilds in the high‑risk fire areas.
How SB 9 functions as a rebuild finance tool
In the aftermath of the fires, underinsurance has become a chronic and widely reported issue for those trying to rebuild. Many homeowners believed they were protected by replacement cost policies—coverage that’s supposed to pay to rebuild the same house—but those payouts have fallen short for some homeowners, sometimes by hundreds of thousands of dollars.
Rebuilding costs have been steep, amid a slew of headwinds ranging from long-standing labor shortages, inflation, and tariffs. In high-cost areas like the Palisades, post-fire construction estimates range from $500 to $600 per square foot. That means rebuilding a modest 2,000-square-foot home could cost as much as $1.2 million.
For fire survivors trying to bridge the gap between insurance payouts and rebuild costs, SB 9 can be a financial lifeline.
Homeowners who take advantage of the lot split gain the ability to sell a portion of their land, generating immediate capital to help pay for rebuilding. Those who choose to build a duplex or second unit can gain rental income, which in turn supports a construction loan, offsets higher interest rates, or helps cover the cost of living while repairs are ongoing.
The concern: Bringing density into high-risk areas
But supporters of Newsom’s executive order say that it helps preserve the character of these neighborhoods, while also providing crucial protection for residents. In areas like the Palisades, where narrow roads, limited ingress and egress, and steep terrain already complicate emergency response, local officials warn that adding density with duplexes could make future evacuations even more dangerous.
The January fires provided an example that locals are sure not to forget anytime soon. During the evacuation, cars jammed the main escape routes and some residents abandoned their vehicles to flee on foot.
From this perspective, the executive order is seen as a necessary precaution that empowers local governments to tailor land-use rules based on risk. Newsom’s office has emphasized that the goal is to protect survivors, not undermine housing policy. “Our obligation is to survivors, full stop,” a spokesperson told the LA Times.
What happens next
The case is now pending in Los Angeles County Superior Court, where YIMBY Law is asking the court to invalidate Newsom’s executive order and restore the original limits on local discretion laid out in SB 9. Its argument is that the legislature, not the governor, sets the rules for where duplexes and lot splits are allowed, even in disaster zones.
If YIMBY wins, it could reestablish the primacy of state housing law in post-disaster rebuilding, preventing local governments from blocking SB 9 projects in the name of emergency flexibility. If it loses, the ruling could serve as a precedent for using emergency powers to reshape land-use policy more broadly in future wildfire or flood zones.
The stakes go well beyond the Palisades. As California faces more frequent, more destructive climate disasters, the question of who gets to rebuild—and under what terms—is becoming a central planning challenge.
In that light, the duplex fight is a test of whether the state’s recovery model is built for speed and local control, or for maximizing the number of survivors who can afford to come home.