Malibu Eyes Disaster Recovery District After Palisades Fire Wipes Nearly $1B Off Tax Rolls

MALIBU, CA — City officials are considering a plan to set aside an estimated $112 million in future property tax revenue over the next 50 years to fund infrastructure improvements and disaster recovery efforts in areas devastated by the Palisades Fire.

The City Council's Administration and Finance Subcommittee will review the proposal Tuesday before it goes to the full City Council on Monday, Nov. 9.

The proposed Malibu Disaster Recovery District would cover approximately 1,412 properties in eastern Malibu, accounting for about 12% of the city's land. More than half of those properties sustained significant damage or destruction in the January 2025 wildfire, according to a city staff report.

The fire caused assessed property values within the proposed district to fall by approximately $990 million, or 23%.

Under the proposal, Malibu hopes to partner with Los Angeles County. In one scenario, the city and county would each dedicate half of the additional property tax revenue they receive as fire-damaged properties are rebuilt and their assessed values rise. That money, which would otherwise flow into their general budgets, would instead be earmarked for infrastructure and disaster recovery projects.

The district could also issue bonds backed by future revenue to fund improvements.

The arrangement would not increase property taxes for homeowners.

The money could pay for projects including underground utilities, water storage and pipelines, road repairs, emergency communications, flood protection and coastal resilience improvements. County officials have already identified four potential water infrastructure projects totaling $48 million.

However, city staff cautioned that the district would face significant limitations. Most of its revenue would not materialize until the latter half of its 50-year lifespan, and directing future property tax growth toward the district would mean less revenue available for the city's General Fund.

The pace of rebuilding, future natural disasters and coastal erosion could also affect how much money the district ultimately generates.

Tuesday's subcommittee meeting will focus on whether to recommend that the City Council move forward with establishing the district. The full council is scheduled to consider a resolution declaring its intention to create the district on Nov. 9.

That resolution would only initiate the process. Specific projects, financing arrangements and final approval would require additional public review.

The Administration and Finance Subcommittee meets at 10 a.m. Tuesday in the Surfrider Room at City Hall, 23825 Stuart Ranch Road.