The cost of California's historic 2017 wildfires has not been completely tallied but likely will reach into the hundreds of billions of dollars. What we do know is this: Cities and counties, in the end, will foot at least half of the bill.
This isn't what people generally think happens after a natural disaster like a wildfire, when we imagine the Federal Emergency Management Agency and other taxpayer-funded agencies swooping in to help. But my research organization recently analyzed multiple studies calculating the full costs of a wildfire — including the losses that add up years later. The expense of putting out the flames — mostly borne by federal and state agencies like Cal Fire — represents only the first 9% of the total cost of a fire.
Then come the near-term losses: lost property, lost homes, aid for temporary shelter, fixing roads and stabilizing hillsides. Those add up to 35% of the total, and are paid for not just by FEMA, but also nongovernmental agencies like the Red Cross and insurance companies.
The bulk of fire costs — 65% of them — stem from long-term damages: depreciated property values, reduced property taxes, lost business revenue, infrastructure repair and degraded ecosystems that need rehabilitation.
Local government bodies pay at each of these stages, but particularly over the long haul. The result is that at least half of wildfire costs accrue to cities and counties.
Some communities bring a certain amount of this trouble on themselves. Eager for new tax revenues, local governments readily approve new subdivisions with little regard to fire hazards. In addition, our wave of retiring baby boomers loves living close to nature, so more homes are being built with national forests as their backyards. From 1990 to 2010, the number of new homes in the wildland-urban interface — where homes mingle with a flammable landscape — grew by 41%.
Meantime, fires got a lot bigger and more deadly — a trajectory likely to continue because of climate change. Compared with the 1990s, wildfires today burn twice as many acres on average. Wildfire suppression costs have tripled during that time span.
City councils and county commissions aren't helpless in the face of these public safety and financial risks. A more stringent approach to land use planning is critical. In Missoula, Mont., for instance, detailed wildfire risk maps are used to direct future development out of harm's way.
When new housing is allowed near forested land, building standards need to include using wildfire-resistant materials. Even in California, which is known for having some of the most forward-thinking rules on construction, communities often relax building standards after a devastating wildfire to speed up rebuilding. This is shortsighted and dangerous.
Some argue that fire-resistant materials are too costly and drive up the cost of housing. So for another study, done in partnership with the Insurance Institute for Business and Home Safety, we modeled a typical house and compared the cost of traditional construction to that of using recommended building materials, such as double-glazed windows with tempered glass and fire-resistant decking, and techniques such as covering roof vents with special screens. These upgrades increased the overall cost of a home only 5% to 10%.
A number of communities have taken this message to heart. Flagstaff, Ariz., and Wenatchee, Wash., are two that adopted regulations requiring wildfire-resistant construction after experiencing devastating fires.
Scores of communities across California are just now starting to confront what our research found: that the cost of the 2017 fires will burden local homeowners, businesses and governments for many years to come. Decisions on how and where to rebuild lie ahead for them, and this is the moment they should implement wildfire-resistant building policies, for the protection of both lives and city coffers.
Ray Rasker is the executive director of Headwaters Economics.