The Marshall fire that tore through Boulder County, Superior, and Louisville on Dec. 30, 2021, was the most destructive fire in Colorado history and left a gaping hole in our community that will take years to fully recover. While we are still early in the recovery process, there are some initial insights that we can glean, and hopefully help people navigate the next chapter in their recovery story.
1. We have an amazing community. I mean, we’ve always known this, right? It’s why so many of us chose to live here, but it’s also a sad fact that sometimes it takes a disaster to bring out the very best in people. The stories of selflessness, sacrifice, and generosity as people stepped up to take care of one another in this time of crisis have been enough to melt even the coldest heart. There has been an enormous outpouring of financial support, both locally and nationally, from small GoFundMe pages to help individual families to the Elevations’ Fire Relief Fund raising more than $1 million and the Realtor Relief Foundation offering $2 million to help victims through this trying time. Perhaps even more impactful, however, has been the generous outpouring of volunteer hours at places like the Disaster Assistance Center and the Marshall Fire Free Store. We should all appreciate our amazing community and not take its members for granted, which brings me to my second point.
2. It would be an even greater tragedy to lose our displaced neighbors and community members. It turns out that there are several significant obstacles facing people displaced by the Marshall Fire and wanting to stay in our community.
First, a significant percentage of displaced homeowners were significantly underinsured. A homeowner’s insurance advocacy group estimates that two-thirds of fire victims in the U.S. are underinsured, and while there are not yet published figures for this regarding the Marshall Fire, it is fair to say that this percentage is likely not far off. Many homeowners are finding that they are underinsured by between $250,000 and $500,000 (or more) and, as such, may not be able to rebuild their homes even if they want to do so because almost no banks will make a secondary loan in such circumstances (remember that people’s mortgages survived the fire, even if their homes did not). Hopefully, there are innovative lenders out there who will find a solution.
Second, the amount of bureaucratic red tape placed on homeowners by their local governments also has a major impact on victims’ ability to rebuild. On one hand, Superior will provide rebates on building permits and fees for Marshall Fire victims and moved fairly quickly to exempt them from the town’s newly adopted 2021 International Energy Conservation Code, which will make the rebuilding process faster and more affordable for victims. Louisville, on the other hand, has been reluctant to make similar concessions and is only considering it after loud protests by the community. The city of Louisville has said that any exemptions related to IEEC (which would save an estimated $77,000 per home) will go only to victims who actually rebuild on their lots. Sadly, this is a further injustice to those who were already underinsured and cannot rebuild because it will negatively impact the value of their lots when they go to sell.
Third, for those who cannot rebuild, they will be facing an extremely challenging real estate market, marked by record low inventory, record high prices, and exceptionally stiff competition.
Thus, being underinsured, facing onerous rebuilding red tape, and not being able to compete in the fiercest real estate market in decades, many of our valued community members will likely be forced to move elsewhere. That may be the biggest tragedy of all.
What can people in this situation do? Well, they may want to consult with a public adjuster, who could help them maximize their insurance proceeds. They should probably get a quote from a private debris removal company and see if their insurance will cover it to avoid the FEMA quagmire. They (and we) can continue to advocate at the local government level for sensible rebuilding requirements. And, finally, if they’re considering buying a replacement home, they should find an experienced Realtor and lender ASAP.
Jay Kalinski is the 2020 owner of ReMax of Boulder and ReMax Elevate.