A new report from the University of California, Los Angeles has confirmed what many already believed: the Southern California wildfires are among the most costly natural disasters in American history.
The report, which comes from the university’s Anderson School of Management, estimates that the two biggest fires caused property damage and capital losses of up to $164 billion. Economists added that insured losses made up around $75 billion of that total.
The economists also predicted a 0.48% loss in county-level gross domestic product for 2025, or about $4.6 billion. The report shared that this will result in a total wage loss of $297 million for local businesses in the affected areas.
In total, the Palisades Fire burned 23,707 acres in the Pacific Palisades area, while the Eaton fire scorched 14,021 acres in Altadena, north of Pasadena, according to Cal Fire.
Other costly natural disasters
Compared to other natural disasters, the fires appear to be among the costliest to ever rock the United States, with only a few others causing more costly damage.
According to the National Oceanic and Atmospheric Administration, 2005’s Hurricane Katrina remains the top natural disaster to rock the country, resulting in more than $200 billion worth of damage and claiming the lives of 1,833 people.
The next costliest natural disaster was Hurricane Harvey, which struck Texas in 2017 and caused $160 billion in damage and saw 89 people lose their lives. Third on NOAA’s list is Hurricane Ian, which is the only disaster from this decade to make the list. The storm that hit Florida resulted in $119.6 billion worth of damage and killed 152 people.
If the estimates from UCLA hold true, the Southern California wildfires will now be the second costliest natural disaster in US history and the only natural disaster in the top 10 not to be a hurricane.
Recovery efforts after the fires
Efforts to rebuild and recover after the fires are still ongoing at this time. Gov. Gavin Newsom signed an executive order on Tuesday that will reduce the amount of red tape impeding the dispersal of widespread relief services for survivors.
Now, survivors will have extended relevant deadlines, regulatory relief for rebuilding, broadened access to essential services, and the suspension of certain rules.
“As Los Angeles rises, we will continue to remove the barriers that would stand in the way,” the governor pledged in a Tuesday statement.
The report from UCLA warned that the impact from the fires will continue to have knock-on effects for some time, with 16,420 residential and commercial buildings being destroyed, as well as numerous automobiles and other personal property.
Among the expenses Californians could soon incur include not only higher costs for housing, as the area was already facing a shelter shortage but also high insurance premiums.
“The wildfires have further exacerbated the already critical issue of insufficient housing supply in LA,” the authors warned.
The report notes that, in total, the wildfires eliminated two-thirds to three-quarters of the annual housing supply.
Still, the report notes that damages go far beyond that of property, as the health effects of the fires will also be catastrophic. From 2008 to 2018, 55,710 premature deaths in California were caused by fire-borne particulate matter.
“The economic impact of LA wildfires extends far beyond property destruction,” the economists wrote. “Wildfires produce large smoke plumes that can travel long distances, posing significant threats to public health.”