The Marshall Fire burned homes in Louisville down to their foundations on Dec. 30, 2021. The city has started the process for how to rebuild. Credit: John Herrick

The Louisville City Council unanimously passed an emergency ordinance this week directing city staff to streamline its complex — and sometimes contradicting — zoning standards to help expedite and potentially rein in costs of rebuilding in neighborhoods destroyed by the catastrophic Marshall Fire

The move comes on the heels of rising concern and despair from those who lost everything about the high price tag of building anew. Of the more than 1,000 homes destroyed in the fire, about half were in Louisville. Dozens more were damaged in the city.

“The fundamental underlying issue that’s driving the conversation is that people are underinsured by $300,000 or $400,000 a house, and sometimes even more,” Mayor Ashley Stolzmann said. “So every dollar that a homeowner can find they find value in because there’s so much money missing to be able to afford to rebuild their home.” 

Broadly speaking, the city’s zoning standards govern where people can build homes. They include such rules as setbacks from streets and distance allowed between homes. 

When developers built homes in Louisville in the 1980s, they did so under development plans that didn’t exactly match the city’s underlying zoning, Stolzmann said. The ordinance will align the city’s zoning rules with these development plans so that neighborhoods can be built back similarly — but without requiring residents to obtain special permits. 

“We needed to come up with a plan on how people would be able to basically rebuild what was there,” Stolzmann said. 

The zoning standards are expected to be published at the end of the month.

More than half of Louisville’s residents are underinsured for the damage caused by the fire, according to a preliminary survey conducted by the city. Some have said they are short hundreds of thousands of dollars on the cost of building a new home. Meanwhile, federal financial assistance generally does not pay for costs that can be covered by private insurance — even if that coverage is inadequate. 

New regulations for rebuilding 

As the city seeks to expedite and control costs of rebuilding to the way neighborhoods were, it is also pursuing brand-new regulations to “build back better.” This may slow things down and drive up costs in the near term.

The city is considering writing new rules for building in fire-prone areas, such as requiring fire-resistant construction materials. The Dec. 30 brush fire came during an unusually dry winter and highlights the growing threats of unabated climate change for homes built in and around the wildland-urban interface

Separately, in November, the city adopted net-zero building energy codes requiring new homes to be energy efficient. This includes fitting new homes with solar panels, electric vehicle charging hookups, electric appliances and certain types of insulation. City staff estimate the cost of complying with the new energy codes at more than $30,000 for each new home. 

Jonathan Mihaly, a Louisville resident whose family lost their home in the fire, said he does not want to criticize the energy codes. But Mihaly said he worries insurance companies won’t cover the additional costs of meeting them. 

“Our local codes may very well require additional out-of-pocket expenses beyond what insurance covers, on top of what are already significant out-of-pocket expenses for fire victims who are underinsured,” he told the City Council last week. “My fear is that with the increasing cost and extended timeline of rebuilding, this will push some families out of Louisville.” 

The city plans to discuss how residents displaced by the fire will have to comply with the 2021 energy codes at its March 1 City Council meeting, according to city officials. Stolzmann said the city is also looking for ways to help drive down the cost of compliance. 

In a Jan. 25 letter to the city, Gov. Jared Polis backed the city’s energy codes and pledged resources to help. 

“The balance between speed, affordability, and rebuilding to the highest standards of modern energy efficiency and fire resilience are not trade-offs we have to make,” Polis wrote. “Please know we stand at the ready with resources from the State of Colorado to support you.” 

John Herrick

I report on housing, climate, health and local government for the Boulder Reporting Lab. I previously covered the state Capitol for The Colorado Independent and environmental policy for VTDigger.org. I’m interested in stories about people, power and fairness.