California’s allocation of federal wildfire recovery money is facing renewed scrutiny after an investigation found that nearly $369 million was awarded to affordable housing developers without requiring them to reserve apartments for people whose homes were destroyed in the state’s devastating 2018 wildfires.
The findings have raised questions about the priorities governing disaster recovery assistance under Gov. Gavin Newsom’s administration, particularly as some homeowners have spent nearly eight years attempting to rebuild while public funding has supported new rental housing developments.
A California Post investigation published by the New York Post examined how the California Department of Housing and Community Development distributed money from a $1.017 billion federal grant intended to address damage caused by the 2018 fires.
The investigation found that affordable housing developers received approximately $368.7 million in awards, even though the developments were not required to house displaced wildfire survivors.
The amount represented approximately 36% of the overall federal allocation, rather than a majority of the $1.017 billion grant. It nevertheless constituted a substantial share of the housing assistance provided through the program.
The awards were made under the federal Community Development Block Grant Disaster Recovery program, administered by the Department of Housing and Urban Development. The funding was designed to address unmet recovery needs not covered by insurance proceeds or other disaster assistance.
The program included support for rebuilding owner-occupied homes, constructing affordable rental housing, repairing public infrastructure and supporting economic recovery in areas affected by the fires.
California’s Department of Housing and Community Development, commonly known as HCD, administers the money and determines which projects qualify under federal and state program requirements.
The controversy centers on the different treatment of homeowners seeking to rebuild their properties and developers seeking financing for new affordable rental units.
According to figures examined in the investigation, approximately $222.4 million was earmarked for homeowner reconstruction assistance. By the end of 2023, however, only about $38 million had been spent rebuilding 110 homes.
That amount was small compared with the destruction caused by the 2018 wildfires, which killed 103 people and damaged or destroyed more than 24,000 structures statewide.
The Camp Fire in Butte County alone destroyed approximately 14,000 residences as flames devastated the town of Paradise and surrounding communities.
The Woolsey Fire in Southern California also destroyed homes across Los Angeles and Ventura counties, leaving residents facing lengthy disputes involving insurance claims, rebuilding costs and financial assistance.
For many affected households, the challenge was not simply finding temporary shelter but securing enough money to reconstruct properties whose replacement costs had increased significantly since 2018.
Among those still struggling is Mickey Schechter, a 62-year-old homeowner whose property was destroyed in the Woolsey Fire.
Nearly eight years after the disaster, Schechter remains in a 350-square-foot guesthouse that survived the flames because he cannot afford to rebuild his primary residence.
According to the investigation, his original home was valued at approximately $750,000, but his insurance company paid only $450,000.
He estimates that rebuilding the property would now cost roughly $2 million, reflecting higher construction expenses and the financial difficulties that have accumulated since the fire.
Schechter also reported paying approximately $300,000 to maintain the damaged property and facing roughly $178,000 in county debris-removal charges.
His circumstances illustrate the financial gap that can arise when insurance payments and government assistance fall short of replacement costs.
Schechter reacted angrily when informed that substantial amounts of wildfire recovery funding had been awarded to developers without a requirement to accommodate displaced residents.
“That’s our money. We’re the ones that suffer for it. Give us our damn money. That’s bulls—t. I’m pissed,” Schechter told the California Post.
The homeowner said he had not received the rebuilding assistance necessary to restore his property.
California’s homeowner recovery program includes eligibility restrictions tied to income, insurance proceeds and the availability of other financial assistance.
Those requirements are intended to direct limited resources toward households with qualifying unmet needs and prevent duplication of benefits already provided through insurance or other programs.
However, they can leave some displaced homeowners unable to qualify for meaningful assistance despite facing substantial unrecovered losses.
The contrast between limited direct homeowner payments and larger awards for multifamily developments has become central to criticism of the state’s disaster recovery strategy.
A subsequent analysis published by Victory Girls Blog highlighted the disparity and questioned whether California had adequately prioritized people whose homes were destroyed.
The report also examined how affordable housing developers obtained grants through funding rounds established under the disaster recovery program.
One example involved a July 2024 funding opportunity associated with communities affected by the Woolsey Fire.
California made approximately $26.7 million available for qualifying affordable housing development, but only one developer submitted an application.
National CORE, a nonprofit housing developer based in Rancho Cucamonga, proposed an 81-unit apartment complex in Agoura Hills.
The project received a score of 90 points, only two points above the minimum qualifying score of 88, according to the investigation.
Other housing developments funded through the broader program received scores as high as 117 points.
Despite the comparatively low score, National CORE was awarded approximately $26.1 million, representing nearly the entire amount available during that funding round.
The apartment project was intended to increase affordable housing capacity in an area affected by the Woolsey Fire.
However, it did not include a requirement that the units be reserved for households displaced by the disaster.
The absence of such a requirement became a central issue because federal funding had been provided specifically for recovery from the 2018 wildfires.
State officials defended the approach by arguing that building additional affordable rental housing can replace units lost during disasters and benefit affected communities even when the occupants are not the same households displaced by the fires.
HCD spokesperson Jennifer Hanson explained that displaced renters frequently obtain other housing rather than waiting for new construction to replace their original residences.
Displaced renters “generally choose to move to another existing rental housing unit,” Hanson said.
Under that approach, constructing affordable apartments in disaster-affected areas can increase the overall housing supply and address shortages created or worsened by the fires.
State officials also cited fair-housing requirements that restrict certain residency-based preferences when awarding federally assisted housing.
Developers were instead required to conduct outreach to populations considered less likely to apply for affordable housing, including wildfire survivors and households using Section 8 rental assistance.
That approach does not guarantee that any specific number of fire victims will receive apartments in the developments financed through the program.
HCD was unable to provide a count of how many wildfire survivors, if any, currently reside in the properties supported by the funding.
The absence of that information makes it difficult to evaluate how directly the rental housing awards have benefited households displaced by the disasters.
At the same time, federal disaster recovery grants are not restricted exclusively to direct payments to individual victims.
HUD’s Community Development Block Grant Disaster Recovery program permits qualifying activities involving housing, infrastructure and economic recovery, provided they meet applicable requirements and address disaster-related needs.
California’s official 2018 disaster recovery allocation documents confirm the $1,017,399,000 federal grant and establish several requirements governing how the state could distribute the money.
At least 80% of the funding was required to benefit the most impacted and distressed areas, while 70% had to benefit people with low or moderate incomes.
The federal requirements also emphasized housing recovery, including both assistance for homeowners and the development of affordable rental properties.
California’s original planning documents allocated approximately $455.8 million to housing programs, including $205.1 million for owner-occupied rehabilitation and reconstruction and $250.7 million for multifamily and small rental housing.
The remainder was distributed among infrastructure, economic revitalization, planning, administration and other recovery activities.
Those original allocations reflected the state’s assessment of housing needs in fire-affected areas and were subject to subsequent program adjustments.
The federal rules help explain why affordable housing development was included in the recovery program, even though the resulting projects were not required to house specific wildfire survivors.
Whether the spending met the program’s objectives therefore involves questions beyond the amount awarded to developers, including whether projects benefited eligible communities and complied with federal requirements.
The available information does not establish that the affordable housing awards were illegal or that developers violated the terms of their grants.
However, the absence of guaranteed housing for displaced residents has intensified criticism about whether the program adequately addressed the needs of people who suffered direct property losses.
The investigation also examined a later round of affordable housing awards that distributed substantial funding to developments across California.
In 2025, the state awarded approximately $146.9 million to 14 projects located from Santa Cruz to Covina.
Those developments carried a combined estimated cost of approximately $632 million, representing roughly $754,000 per apartment.
The high development costs raised additional questions about how much affordable housing could be produced with the available recovery funding.
Construction costs vary considerably by location, building design, land availability and regulatory requirements. Nevertheless, the figures illustrate the expense associated with developing new rental housing in California.
The projects also demonstrate how disaster recovery funds can be combined with other public and private financing sources to support developments that would otherwise struggle to proceed.
HCD has maintained that increasing affordable housing availability can contribute to long-term recovery in communities where wildfire destruction worsened existing housing shortages.
Critics counter that the strategy can leave people who lost homes without direct assistance, even as developers obtain substantial public subsidies.
The dispute is unfolding under Newsom, who became governor in January 2019, shortly after the Camp and Woolsey fires.
The 2018 disasters occurred during the administration of former Gov. Jerry Brown, when Newsom served as lieutenant governor.
The federal recovery allocation and subsequent administration of the funds took place after Newsom assumed the governorship.
California’s management of disaster assistance has also drawn attention following the January 2025 wildfires in Los Angeles County.
Those fires, including the Palisades and Eaton blazes, destroyed thousands of structures and displaced residents across Pacific Palisades, Altadena and neighboring communities.
Newsom announced a $2.5 billion state funding package intended to support emergency response, debris removal, rebuilding and other recovery needs.
However, an investigation by NBC4 Los Angeles found that much of the funding remained unspent more than a year after the fires.
The NBC4 investigation into the $2.5 billion relief package examined state expenditure records and identified substantial amounts routed through government agencies rather than provided directly to individual wildfire survivors.
According to the investigation, approximately $605 million had been allocated during an earlier reporting period, with significant portions reimbursing state and local agencies for emergency operations.
About $37 million went to Los Angeles city and county fire departments to cover firefighting expenses.
Approximately $21 million was provided to the California Highway Patrol for road closures, security and other activities connected with the wildfire response.
State records also showed that approximately $14 million had been used for Highway Patrol deployments associated with demonstrations against federal immigration enforcement in downtown Los Angeles.
Officials had authorized the use of certain emergency funds for additional purposes, but the expenditure raised questions about whether money announced as wildfire relief was being directed toward activities unrelated to rebuilding affected communities.
NBC4 found that approximately 60% of an initial $1.5 billion portion of the recovery funding, or about $895 million, had not been spent during the period examined.
The investigation prompted additional questions from wildfire survivors and local officials about when remaining resources would become available.
Subsequent state disclosures showed that California released more than $300 million in additional payments for Los Angeles city and county recovery efforts.
The later allocation included approximately $110 million for the city of Los Angeles and $191 million for Los Angeles County to cover firefighting, cleanup and other recovery expenses.
Even with those additional distributions, residents continued raising concerns about the pace of assistance and the challenges of rebuilding homes.
Nina Madok, a leader of the Community Recovery Coordination Council, said the investigation helped affected communities press for access to money that had remained under state control.
“If it wasn’t for your reporting on this pot of money that was sitting at the state level, we never would have been able to advocate for ourselves specifically to get some of that money,” Madok said.
The two recovery programs involve different funding sources and disaster periods.
The earlier $1.017 billion federal allocation was intended to address damage from the 2018 wildfires and was administered under HUD’s disaster recovery regulations.
The later $2.5 billion package involved California’s response to the 2025 Los Angeles-area fires and included state emergency appropriations and reimbursements for government operations.
They nevertheless raise related questions about the speed at which disaster recovery assistance reaches affected communities and the balance between funding public programs and helping individual households.
Homeowners attempting to rebuild often encounter multiple financial obstacles, including insurance shortfalls, permitting requirements, debris-removal expenses and rising construction costs.
Those challenges can persist for years after the immediate emergency has ended.
For renters, the loss of available housing can create similar difficulties, particularly in communities where affordable units were scarce before the disaster.
State and federal recovery programs therefore must address both the replacement of damaged housing and the financial circumstances of households displaced by the destruction.
The California Post investigation found that HCD could not determine how many wildfire survivors ultimately obtained apartments financed through the affordable housing awards.
That reporting gap complicates efforts to measure whether the developments met the needs of people affected most directly by the fires.
The findings have also renewed questions about transparency in grant administration, the criteria used to select developers and the amount of direct assistance provided to homeowners.
California’s broader housing shortage provides context for the decisions, but it does not resolve concerns about whether disaster-specific funding has produced adequate outcomes for wildfire victims.
Federal guidelines allow affordable rental construction as an eligible recovery activity, making the allocation itself distinct from a finding of improper spending.
The central controversy concerns how California selected projects, measured their benefits and accounted for the households originally affected by the disasters.
Nearly eight years after the Camp and Woolsey fires, some residents remain unable to restore their properties while state-funded housing projects continue through development and construction.
The $368.7 million awarded to developers has become a focal point in that debate because the state did not require the resulting apartments to accommodate wildfire survivors and could not provide figures showing how many had benefited.
As California continues recovering from successive wildfire disasters, the findings raise continuing questions about whether existing assistance programs are sufficiently transparent, whether they deliver timely help to affected households and how public officials measure the results of billions of dollars in disaster recovery spending.
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