The One-Stop Rebuilding Shop for Wildfire Victims

California is on fire. Already this year, thousands of people have lost their homes, and communities are struggling to figure out how to rebuild. Nikki Pechet wants to be the person they turn to.

Pechet co-founded Homebound Inc. in 2018 after the Tubbs Fire destroyed 4,600 homes in Northern California, envisioning the company as a more efficient general contractor for rebuilding disaster zones. Her tech-driven approach to the painful process of collecting insurance money and rebuilding has drawn more than $50 million of venture capital, with backers including GV, Alphabet Inc.’s investment arm and billionaire Vinod Khosla’s eponymous firm. It’s a strategy she says could also be useful for people who want a turnkey solution for designing and constructing a house anywhere—disaster or not.

“The opportunity is huge,” Pechet says, adding that there are billions of dollars of property damage from natural disasters each year in the U.S. “The goal of this is to build a massive company that can serve any community that needs us anywhere in the world.”

Homebound offers a glimpse of how Silicon Valley sees the potential to make money on a planet that’s increasingly inhospitable; the company has created an efficient solution to help people at their most vulnerable. But its model also raises an uncomfortable question that a lot of Californians are grappling with: Should money go toward rebuilding or figuring out how to retreat?

The tension between those two choices is even more pressing this year as California’s record temperatures, dry conditions, and lightning storms have combined to ignite some of the largest infernos the state has ever seen, all before the typical start of fire season in October. Already this year more than 4,000 homes have been destroyed by fires, according to Cal Fire.

“I don’t know what to make of rebuilding,” says Lisa Dale, a professor at Columbia University’s sustainable development program and faculty associate of the school’s Center for Resilient Cities and Landscapes. “Certainly it’s easy to say, ‘Well, that’s not advisable, it’s a short-term solution, that you’re still going to be living in a risky area.’ But then I ask myself, What would I advise?”

The problem, Dale says, is that there’s nowhere that’s really safe from climate change or other environmental risks anymore. If someone moves away from wildfire danger, they could be moving into flooding or hurricane zones, she says.

“Managed retreat,” as it’s called when communities migrate out of disaster-prone areas, is more relevant to flood zones, Dale says. One problem with encouraging managed retreat for wildfire zones is that they contain too many people. Roughly one-third of Americans live in the wildland-urban interface, she says. That’s the transition zone between man-made development and nature, where fire risk can be higher.

“There’s nowhere for them to go.”

On a recent September evening in Santa Rosa’s Coffey Park neighborhood, 38-year-old Pechet stands in a cul-de-sac of McMansions as she explains some of the bespoke details of a Homebound rebuild in front of her. This client, a caterer, wanted a commercial kitchen and needed the house to be wheelchair accessible to accommodate her husband’s recent stroke. Coffey Park was almost entirely razed by the Tubbs Fire three years ago, but is now mostly rebuilt. Little evidence of the destruction remains, but Pechet, who’s fond of big hand gestures while explaining her work, points out the yard signs dotting the lawns reading “Coffey Strong.”

“There’s one there, there’s one there. They used to be all over the place,” she says, pointing to a couple of homes with the signs planted in front. Two boys on bikes ride by. “The neighborhood really came together,” she says, explaining that every block had a block captain in charge of coordinating with neighbors to make sure everyone rebuilt.

Homebound was founded in the wake of the Tubbs Fire, which destroyed the house of Pechet’s co-founder Jack Abraham. (Nearby fires that year almost razed Pechet’s house, too.) Rather than being scared away, the community came together, tethering the co-founders to the freshly destroyed towns.

“What we thought at that point was, This is the largest disaster in the history of California, and it’s in our backyard, and it’s our families and our community, and we have to help,'” Pechet says. She has a background in brand management and marketing at PepsiCo. and Thumbtack, a Silicon Valley startup she left to start Homebound, as well as in real estate from her time at the Related Cos.

Homebound was born out of the frustration that Abraham, a venture capitalist and founder of investment firm Atomic, experienced when trying to rebuild his own home. Pechet and Abraham thought there should be a one-stop shop for people who wanted to construct a custom home. The problem with existing general contractors after a natural disaster was that homeowners often had to work with more than a dozen experts—from architects to remediation specialists—to rebuild.

Homebound sought to coordinate all that. The company helps people collect insurance money and figure out what they can afford. It uses virtual reality to help clients design their dream home. Its relationships with carpenters, plumbers, and other skilled workers who can be in short supply after a disaster help get houses rebuilt faster than a normal contractor could. Pechet says Homebound’s fee for all this is within the industry’s standard range of 15% to 25% of the total project cost.

Pechet and Abraham’s plan was to start in Santa Rosa, then make their service more widely available to anyone building a custom home, even in areas not recovering from disaster. But just a few months after founding the company, Pechet was opening a new office in Southern California to respond to the Woolsey Fire, which destroyed hundreds of homes in Malibu. Meanwhile, back in Northern California, the Camp Fire tore through almost 14,000 homes and killed 85 people, surpassing Tubbs as the most destructive blaze in the state’s history.

It became clear there was plenty of business for Homebound in California’s wildfire destruction market alone.

Nationally there are almost 2 million single-family homes at an elevated risk of wildfire damage, costing more than $638 billion to rebuild, according to a recent analysis by CoreLogic. Much of this potential damage lies in California. Of the 10 metro areas with the most single-family homes at risk, seven are in California, CoreLogic found. In the Los Angeles and nearby Riverside metro areas alone, there’s some $142 billion worth of homes that could be damaged.

Homebound is currently working with 150 homeowners up and down California, a scale that makes them a tiny player among homebuilders in the state. But September was set to be the company’s strongest month yet. They’re already working with their first customer whose home was wrecked by the LNU Lightning Complex fire, a blaze that started in August and has become the state’s fourth-largest and tenth most destructive in history.

Like many startups, the company isn’t profitable and is focusing on growth. Homebound raised $35 million last year in a series B funding round led by Fifth Wall, a venture capital firm focused on the intersection of tech and real estate.

One of the challenges for Homebound is that the “disaster market” is rather lumpy, according to Vik Chawla, a partner at Fifth Wall. In calm years, the amount of rebuilding can be about $1.7 billion in North America, he says. But, in severe ones, that figure can balloon to $37.5 billion. To smooth out highs and lows, Homebound will have to take the systems it’s developing for use in disaster areas and eventually apply them to normal building and remodeling projects, Chawla says.

Still, the record-breaking wildfire season in California this year has only given him more conviction that Homebound is onto something. Even now, with repeated evacuations in parts of the Bay Area, people aren’t retreating. “The idea the individuals whose homes burned down are not going to rebuild either in the exact same spot, or in neighboring areas, has not yet been proven out in the data,” he says.

Homebound isn’t the only Silicon Valley venture responding to wildfires. Aclima is working to map air quality as nearby fires routinely choke the region and another called Dendra Systems, backed by Chris Sacca, uses drones to plant seeds on forests recently decimated by fires. In 2019, California Governor Gavin Newsom solicited ideas on innovating the state’s response to blazes, offering contracts to the best ideas. The first two were granted to Technosylva, which is developing technology to predict the path of a wildfire using cloud-based modeling, and Northrop Grumman to create an early wildfire ignition detection system.

The competition, Newsom said last year, “leverages one of the things California does best, which is embracing innovation and technology to address some of the most unprecedented challenges California is facing.”

Homebound’s pitch to wary wildfire refugees is that rebuilding is safer. New construction is up to the latest code, complete with more resilient materials and barriers to block the path of fires. Plus, burnt-out neighborhoods often resemble moonscapes with little left to ignite.

“There are fire cycles,” Pechet says. “It’s not like people expect that they’re going to be at risk again in the real near term.” Even so, she adds, evacuations are going to be a “way of life” for Californians in wildfire areas. It’s even possible—though unlikely—that Homebound could build a house for someone only to have it reduced to ashes in another blaze, she says.

That’s a scenario not far from people’s minds this year, with residents of Napa and Sonoma counties fleeing fires repeatedly. The record-breaking season won’t eliminate the risk, either. While the trees are largely gone in places that burn, other flammable vegetation can return as early as the next winter, according to Daniel Berlant, a spokesman for Cal Fire.

“It’s often the grass and brush that grows back first as soon as the rain occurs,” he says. “Those vegetation types are typically more flammable than the trees that were there before the fire.”

Even with better building techniques and recently burned areas, insurance is getting harder to come by in California. Private carriers have been dropping coverage or refusing to underwrite in wildfire-prone areas. That’s forcing more people onto the FAIR Plan, a decades-old program in California meant to be a last resort for people who can’t get insurance from carriers such as Allstate Corp. and State Farm Mutual Automobile Insurance Co.

Pechet says that most of Homebound’s customers are still able to get private coverage when they rebuild, but the company has also worked with people on the FAIR plan. “Yes, rates will go up to some extent” after a wildfire, she says. “But it hasn’t been a decision-changer for anyone who we’ve worked with.”

Richard Hicks, who moved into a house Homebound rebuilt for him in Santa Rosa a year ago, lives next to someone who was underinsured. As a result, the view from his new three-bedroom, two-bathroom home is an empty lot with a drained swimming pool and abandoned basketball court.

Hicks’s home and just about everyone else’s nearby was destroyed in the Tubbs Fire. He was the first to rebuild and return. But, unlike in Coffey Park, most of his neighbors have been slow to come back. In the months following the fires, the 73-year-old considered leaving California altogether and moving to Florida, where he likes to vacation.

“A lot of people are leaving California because of the environment that we live in,” he says on an increasingly rare blue-sky afternoon in September, gesturing up at the sky. “Wildfires are going to be with us. I mean, it has to be something that you consider.”

“Well, and you go to Florida and you’ll be evacuated for hurricanes,” Pechet chimes in. (Homebound plans to expand to that market, too.)

A few weeks later, Hicks got a call late on a Sunday night that he had to evacuate because the nearby Glass Fire was closing in. The next morning, he returned home to hose down his property, the air around him a sickly orange. He was frustrated. Frustrated with the rolling blackouts implemented to keep new blazes from starting, frustrated with the fires.

“I’m just tired of putting up with this,” he says. Later that day, he was calmer and feeling “relatively comfortable” that his neighborhood will be safe this time around. Still, moving to Florida isn’t out of the question—central Florida to avoid hurricanes, he says. “Who knows? I could wake up early one morning and say, ‘Alright, I’ve had enough.’ “