Malibu and Pasadena have agreed to restore a state law allowing duplexes and lot splits in neighborhoods affected by the 2025 fires. That leaves the City and County of Los Angeles as the only local governments still defending restrictions on the law in the Pacific Palisades and Altadena.

The settlements are the first major development in a lawsuit in which YIMBY Law and developer Andrew Slocum sued Governor Gavin Newsom, Mayor Karen Bass and four local governments in December, arguing that officials had unlawfully used emergency powers to override Senate Bill 9.

SB 9, which took effect in 2022, allows qualifying property owners in neighborhoods zoned for single-family homes to divide their lots and build as many as four homes. Projects must generally be approved without the discretionary hearings that cities have historically used to delay or block new housing.

Following the Palisades and Eaton fires, residents and elected officials in burn areas demanded that the law be suspended. They argued that adding more homes could place residents on narrow evacuation routes during a future wildfire. Newsom responded in July 2025 with an executive order allowing local governments to suspend SB 9 in high fire hazard severity zones within the two burn areas. Bass immediately used that authority to block SB 9 projects in the Pacific Palisades. Malibu, Pasadena and Los Angeles County adopted similar restrictions.

YIMBY Law argues that neither the governor nor local officials can set aside a law passed by the Legislature simply by invoking an emergency. The organization also notes that SB 9 already allows an individual project to be denied when officials identify a specific public health or safety threat that cannot be mitigated.

Now, two of the four local governments that imposed bans have chosen to stop defending them. Under the settlements, Malibu and Pasadena agreed to repeal their restrictions and accept pending and future SB 9 applications. Pasadena’s City Council voted unanimously on July 20 to repeal its ban. Malibu has until September 29 to take the same action. The settlements represent a significant retreat from policies that officials initially defended as essential to public safety.

Pasadena cited the cost and uncertainty of continuing the litigation, as well as the time that has passed since the Eaton Fire. Its repeal means qualifying property owners in affected parts of the city can once again submit SB 9 applications.

For survivors who are underinsured or can’t afford to rebuild the same large single-family home that previously occupied their land, the flexibility can be consequential. A lot split may allow an owner to sell part of the property to finance reconstruction. A duplex or additional unit can produce rental income, house relatives or make it possible for multiple households to share the cost of returning. Without those options, rebuilding policy favors people wealthy enough to reconstruct expensive homes without help.

The largest areas affected by the bans, however, are not covered by the settlements. More than 16,000 structures were destroyed in the Eaton and Palisades fires, and most were located in the City of Los Angeles and unincorporated Altadena. LA County continues to defend its restrictions in unincorporated Altadena, while the City of Los Angeles continues to defend the Pacific Palisades ban. Newsom and Bass also remain defendants in the case.

That means homeowners on opposite sides of jurisdictional boundaries may now have sharply different rebuilding rights. Someone in fire-affected Pasadena may be able to divide a lot or build a duplex, while a similarly situated homeowner in nearby unincorporated Altadena is prohibited from doing so. The same divide exists on the Westside between Malibu and the Pacific Palisades.

The fight is also moving through the state Legislature. Senator Sasha Renée Pérez, who represents Altadena, has introduced SB 1090, which would temporarily exempt the community from SB 9 and another state housing law. So even if YIMBY Law succeeds in challenging Newsom’s emergency order, the Legislature could create a separate statutory restriction for Altadena.

No comparable legislation has been identified for the Pacific Palisades. There, Newsom, Bass and the City of Los Angeles continue to defend the suspension in court. Councilmember Traci Park was one of the leading proponents of suspending SB 9 in the Palisades. She urged Newsom to intervene after residents organized against proposed lot splits, arguing that denser rebuilding could worsen evacuations and allow developers to capitalize on the disaster.

But SB 9 is not limited to outside developers. It is also a tool available to homeowners trying to remain on land they already own. Treating every duplex or lot split as predatory development obscures the financial reality facing survivors whose insurance payments do not cover the cost of rebuilding.

The City of Los Angeles must now decide whether to continue spending public resources defending a blanket ban that Malibu and Pasadena have abandoned. The state and county also remain defendants, and no court has yet resolved the larger question of whether Newsom had the authority to suspend the law.