Los Angeles City Council hit the brakes Tuesday on a proposal to study a new “climate resilience district” for Pacific Palisades, after a debate over whether the wildfire-ravaged neighborhood should be the first in line for a powerful but still largely untested financing tool.
Councilmember Traci Park, who represents the hillside community burned in January’s Palisades fire, urged colleagues to approve a $300,000 feasibility study for what would be L.A.’s first Climate Resilience District — a special zone that could direct future property tax growth and other local revenues toward wildfire prevention, soil stabilization and other climate-related improvements.
“This vote isn’t creating the Climate Resilience District,” Park said. “We’re just asking for the study to educate us about the benefits, opportunities and potential financial impacts, if any.”
Climate Resilience Districts (CRDs) were created under a 2022 state law, SB 852. They allow cities and counties to capture future increases in property tax revenue within that district’s boundaries to pay for climate adaptation projects. While CRDs can also impose new taxes or assessments, doing so requires voter approval.
Park also urged members to vote down the Budget and Finance Committee’s earlier recommendation to “note and file” the $300,000 study request—a procedural move that would acknowledge the report but take no action on it.
But Budget and Finance Committee Chair Katy Yaroslavsky warned that moving ahead now would be “jumping the gun,” given that the city has not yet completed a broader analysis on how climate resilience districts could affect L.A.’s general fund citywide.
“We still don’t have that report,” she said. “There are potentially huge financial implications. … Sometimes [these districts] use tax increment, which takes away money from the general fund. … We can’t afford to divert property tax revenues from the general fund for all the reasons I’ve been yelling at us about and we’ve been talking about now for the last eleven months.”
The council voted 10–5 to refer the entire matter, including Park’s proposal and the Budget and Finance Committee’s recommendation to “note and file” the earlier study request back to the Budget and Finance and Economic Development committees for further study. Park, joined by Councilmembers Curren Price, John Lee, Heather Hutt and Adrin Nazarian, opposed the referral.
The debate stems from a motion Park introduced on Jan. 15, shortly after the fire erupted above Pacific Coast Highway, destroying homes, businesses and public facilities. Her motion asked the Economic and Workforce Development Department (EWDD) to study the feasibility of creating a Climate Resilience District for the burn area and what types of infrastructure or investments it could support.
EWDD’s June report concluded the idea deserved further examination and recommended a $300,000 feasibility study. But the Budget and Finance Committee voted earlier this year to “note and file” the request, saying the money wasn’t included in the budget and that the city first needed a broader analysis of the fiscal impacts of such districts.
On Tuesday, Park argued the funding had already been identified and said the city needed to move quickly given the unprecedented scale of the Palisades recovery and the infrastructure work still required for residents to rebuild.
She introduced a substitute motion that would direct EWDD to pursue a Disaster Recovery District under SB 782 — a related state-authorized financing tool — and allocate $300,000 from the city’s Economic Development Trust Fund for a feasibility study and boundary analysis.
Yaroslavsky countered that the source of the funds — and what they might otherwise have been used for — had not been vetted by the committee that oversees EWDD’s budget. She urged the council to let the appropriate committees weigh the fiscal tradeoffs.
“I’m not here to say that we shouldn’t use it for this,” she said. “But the committee that oversees EWDD should have a chance to have that conversation.”
Climate Resilience Districts are designed to help communities finance climate adaptation projects. They are similar to enhanced infrastructure financing districts, but are tailored specifically to wildfire, flooding, heat and sea-level-rise risks.
The main funding mechanism is tax increment financing — a tool that does not raise tax rates. Instead, the amount of property tax going into the city’s general fund is frozen in the year the district is created. As property values rise over time, some of the new revenue — the “increment” — is redirected into the district to pay for eligible projects.
Supporters argue that this gives at-risk communities a reliable, long-term funding source for climate improvements that are otherwise difficult to pay for. Critics warn that setting aside too much tax increment can constrain the city’s general fund for decades, reducing money for basic services.
The June EWDD report also noted that Climate Resilience Districts are not useful for short-term disaster recovery. Even under the fastest timeline, it could take 18 to 36 months to form a district, another two years before tax increment begins flowing, and several more years before enough is available to borrow against.
Park’s proposal has drawn support from the Westside Regional Alliance of Councils, a coalition representing 14 neighborhood and community councils in Council Districts 5 and 11 and parts of 4 and 10. The group urged the city to at least determine whether a district is feasible for the burn area.
Several Palisades residents also urged the City Council to study the district, telling members during public comment the fire highlighted the need for stronger resilience.
“Climate Resilience Districts would not only improve the safety and preparedness, it would strengthen the economic backbone of Los Angeles,” said Valeria Serna, a member of Resilient Palisades, a local nonprofit focused on community-driven climate resilience and wildfire recovery.
Meanwhile, Los Angeles County has moved more quickly. Supervisors recently approved separate disaster-recovery financing districts for unincorporated communities affected by the Palisades and Eaton fires, describing them as tools to fund critical infrastructure improvements.
Park pointed to the county’s actions as evidence that the city should not delay. “We have an urgent and ongoing crisis right now in the Palisades that needs action,” she said.