L.A. Wildfires Inflict $164 Billion in Property and Capital Losses

Los Angeles, Feb 6, 2025: The recent devastating wildfires that tore through Los Angeles County have led to staggering property and capital losses, potentially reaching as high as 164 billion U.S. dollars, according to a new report. The UCLA study, published on Tuesday, estimates the total losses from the Palisades and Eaton wildfires could range between 95 billion dollars and 164 billion dollars, with insured damages projected at 75 billion dollars.

The report, compiled by economists Zhiyun Li and William Yu from the UCLA Anderson Forecast, provides an alarming outlook for the region’s economy. It predicts that the wildfires will result in a 0.48-percent decline in Los Angeles County’s GDP for 2025, translating to an economic loss of about 4.6 billion dollars. The wildfires also caused a wage loss of approximately 297 million dollars, affecting local businesses and employees in the fire-ravaged areas.

The UCLA report underscores the growing financial and environmental toll of wildfires, warning that unless there is substantial investment in wildfire mitigation efforts, Californians will face rising insurance premiums and increasing health risks due to wildfire-related air pollution. The report also highlights the potential impact on the housing market, particularly rental units in Los Angeles, which could become increasingly unaffordable due to the compounded effects of these catastrophic events.

Last month, Los Angeles County, the most populous county in the United States, witnessed its most catastrophic wildfires in history. The two fires, the Palisades and Eaton wildfires, claimed the lives of at least 28 individuals and left over 16,000 structures destroyed. The Palisades fire scorched over 23,700 acres (95.9 square kilometers), while the Eaton fire burned through 14,000 acres (56.7 square kilometers) of land.

The scale of destruction has not only caused extensive physical damage but has also created a ripple effect across the local economy. With the loss of homes, businesses, and critical infrastructure, recovery is expected to take years, and the long-term economic consequences will be felt by both individuals and businesses in the affected areas.

The UCLA Anderson Forecast, renowned for its thorough and often-quoted economic outlooks, calls for more proactive measures to combat the increasing frequency and severity of wildfires in California. Experts argue that climate change, combined with poor forest management and urban sprawl, has created the perfect storm for these deadly fires.

As Los Angeles grapples with the aftermath, authorities are urged to invest in better fire prevention strategies, including controlled burns, improved building codes, and public education campaigns. The financial toll of these wildfires, as highlighted by the UCLA study, serves as a wake-up call for policymakers and residents alike to take more significant steps to address the growing wildfire threat in California.

The findings of this report paint a grim picture of the future for Los Angeles County, but they also serve as a critical reminder of the urgent need for resilience and preparation in the face of increasingly destructive wildfires.