Real estate losses from fires top $30 billion, from old mobile homes to $23-million mansions
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Real estate losses from the Palisades and Eaton fires could top $30 billion, and government agencies that receive revenue from taxes stand to lose $61 million or more annually while homes are being rebuilt, a Times analysis shows.
The analysis, comparing Cal Fire’s assessments of buildings destroyed and damaged with Los Angeles County Assessor parcel records, gives new perspective to the extent of the toll on the two communities. The fires destroyed structures on 56% of all the properties making up the Pacific Palisades. Nearly half of properties in Altadena were destroyed.
More than 300 were commercial buildings. Churches, schools and hospitals were also lost. By far, the biggest impact was on homes.
In all, just under 13,000 households were displaced by the two fires. They came from nearly 9,700 single-family homes and condominiums, almost 700 apartment units, more than 2,000 units of duplexes and bungalow courts and 373 mobile homes that Cal Fire determined were either destroyed or heavily damaged.
About half the single-family properties destroyed in the fires did not have a homeowners’ exemption, suggesting they were rentals, and their loss could raise questions about the sustainability of the two communities’ base of affordable housing.
Los Angeles Housing Department records show that 770 rent-controlled units were destroyed in Pacific Palisades and will be lost as affordable housing if their replacements no longer fall under the city’s rent stabilization ordinance. A spokeswoman for the department said it is working with the city attorney to determine whether the city’s rent stabilization ordinance can require the units to be rebuilt under the law which applies to properties built before Oct. 1, 1978.
In Altadena, hundreds of renters occupied a type of housing common in the first half of the 20th century and almost never built today — clusters of single-family bungalows or cottages on a single parcel. Even though those parcels are no longer allowed under current zoning, a county ordinance adopted following the 2018 Woolsey fire allows the owners to rebuild like-for-like. But some may lack the financial resources to do so.
The losses extended over a range of L.A.’s economic spectrum weighted toward the high end. Among the lost dwellings were 79 single-family homes valued at over $10 million in the Palisades fire zone, where the median value was $3.7 million, according to The Times calculation. The median in Altadena, though considerably lower at $1.2 million, was still higher than all of Los Angeles County by more than a quarter of a million dollars. More than 2,400 homes in Altadena were valued at over $1.5 million.
Those values, calculated based on the most recent sales in the two neighborhoods, were not always indicative of residents’ economic status. Many that were worth more than a million dollars just before they burned were purchased decades ago for less than $500,000.
The Times estimate of losses, $22 billion in Palisades and $7.8 billion in Altadena, for homes rated by Cal Fire as destroyed or up to 50% damaged, represents only a fraction of the total cost of the region’s worst wildfire disaster, estimated at as much as $272 billion.
That figure came from the commercial weather forecasting company AccuWeather that projected the combined cost to individuals, institutions and the Southern California economy. Its methodology takes into account not only direct damage to homes and personal property, but cleanup, infrastructure repair, temporary housing and the ripple effects of lost business and employment. But its publication did not break those costs into their individual components.
The Times sought to gauge the collective loss to property owners — the value in single-family homes, condominiums, apartments and commercial buildings that were built up over years or decades and wiped away in a day. The estimate is based on total market value, including land and improvements. Most property owners will eventually recoup some or all of their losses through insurance that allows them to rebuild or by selling off the land. Some have already done so.
The all-encompassing figure for loss reflects the reality faced by those like Christine D., for whom the destruction of her home was a financial death blow to a way of life.
Christine D., who asked that her last name not be used because she has already been the target of identity fraud, stood momentarily frozen amid her ruins, plastic grocery bags wrapped around her shoes and over her head, a vista of Santa Monica Bay and Catalina Island behind her.
She was standing over the marble bust of a Flamenco dancer passed down to her by her mother. She had come to see if it survived.
“I thought I could save it and it wouldn’t burn,” she said. “It did burn. It’s broken and I don’t think it can be salvaged.”
She isn’t sure what she will do now. She said she was insured “to a minimum” and has been advised that rebuilding could cost $1.5 million.
“I’m over 80,” she said. “They’re talking about five to six years rebuilding. I think it’s not a good time that I can rebuild and spend another five or six years with all the problems.”
She said she might walk away and leave the vacant lot to her grandchildren.
“Well, this is what’s left. Look at the view, a beautiful view.”
The Times analysis marks the low end of a range of fairly close estimates, the highest being $33 billion. Measuring real estate loss from the fires is, at best, an imperfect exercise laden with assumptions about property value and the interpretation of data that was not collected for that purpose.
UCLA’s Anderson School of Management estimated the total property and capital losses at between $95 billion and $164 billion and insured losses at $75 billion. Using an estimate of average home values in Pacific Palisades and Altadena based on ZIP Codes, the UCLA researchers estimated real estate losses at just above $33 billion.
Like The Times, the real estate analytics firm CoStar Group drilled narrowly into the value of lost real estate, coming up with a figure of $30.4 billion and about 11,900 dwellings destroyed.
The differences are largely attributable to how each estimated market value and handled anomalies in the damage source data, which was collected by field investigators working under difficult circumstances to record damage to a wide range of structures and lot configurations.
UCLA, for example, used the lowest estimate of value, averaged at $2.09 million, but multiplied by the highest number of structures, at 16,240. That number included nearly 4,300 buildings that Cal Fire characterized as utility structures. The Times excluded them.
In a publication, CoStar Group reported 11,039 single-family homes and 870 apartment units in 74 buildings and used individual valuations for each property from Homes.com to arrive at a total of $29.7 billion for single-family homes, an average of $2.7 million. Apartments and commercial buildings added another $700 million.
The Times arrived at a similar valuation from the L.A. County Assessor’s valuations of recent sales, which are updated to the sale price.
But The Times found hundreds of the destroyed properties identified as single-family homes in the Cal Fire data, which was based on structures and not parcels, were either accessory dwelling units or multiple homes clustered on the same parcel.
Altadena landlord Michael Astalis lost five of those multi-home properties on which stood a total of 16 structures, including his own.
“I lost $16 million in 3 1/2 hours,” Astalis said in an interview. “I’m guessing I am one of the people that lost more properties than anyone else in Altadena,” he said.
When the fire broke out in his neighborhood, he went with his daughter and knocked on every door of his 174 residents to notify them to evacuate.
Astalis estimates that at today’s construction cost, which will go up because of the demand from the fires, he would have enough money to rebuild his own home and a few of the buildings, but probably not all. The insurance for one of the buildings, 716 E. Pine St., will cover just two months of the rent.
Astalis says his daughter had to take out a $130,000 loan just to return security deposits and remaining rent for the month of January to his tenants, most of whom have stayed with him for several decades.
“People don’t realize that we are not bad as small landlords,” he said. “My rents were very low, $1,500-$1,700 for a 1,000 to 1,200 square-foot place. Now, people are realizing they had really low rent.”
Under the new county ordinance, Astalis can rebuild all the units without going through a zoning process, Los Angeles Regional Planning Director Amy J. Bodek said. But he also has the option of building fewer structures, including a single home on each parcel. Or, he could apply to subdivide the lots into multiple smaller ownerships.
State law requires Astalis to provide alternative housing, either on his parcels or elsewhere, for all units that were renting at low- and moderate-income rates.
Bodek said the county is concerned that some owners may not have the resources to comply, raising the potential for loss of what she described as “gentle density” that provides multiple units in a low-density setting and is “very easy for the community to accept.”
The county is investigating ways to incentivize to help those tenants and owners return, Bodek said.
Those who choose not to rebuild can obtain relief from the portion of their property tax bill that covers improvements. The savings on a typical house would be about a third of the property tax bill. For example, Christine D., whose home had a value of $108,136 for land and $88,425 for improvements — far below its current value because of her long tenure — would now owe about $1,000 for the land but nothing for improvements. The valuation of the land will continue to rise at no more than the Proposition 13 limit of 2% annually.
Property owners pay taxes at a general rate of 1% of their assessed valuation set by Proposition 13 and additional levies for voter-approved bonds that can raise the rate to just under 2% in some areas.
Using GIS analysis, The Times calculated the number of tax-paying parcels destroyed or damaged at 10,699. That includes 37 schools, churches and hospitals with a combined valuation of $5.2 billion for their improvements.
More than four dozen public agencies will bear the burden of the lost taxes.
A Times analysis of Los Angeles Auditor-Controller data shows that just over half of that loss will hit 18 school and community college districts including Los Angeles, Santa Monica-Malibu and Pasadena.
Los Angeles County will lose the largest share, about $13 million per year, and the city of Los Angeles stands to lose $9 million per year — small fractions of each agency’s budget.
Taxing jurisdictions that have voter-approved bonds, including the Los Angeles Community College District and the city of Pasadena, will lose funds earmarked for payments on that debt and may have to seek other sources to make payments.
In addition to the $61 million in outright losses, the agencies will have to weather delays in receiving some of the taxes due on land as a result of Gov. Gavin Newsom’s order allowing property owners in several ZIP Codes affected by the fires to defer payments until April 2026.
For both property owners and the agencies their taxes fund, the road to normalcy could take years.
Based on the trajectory of property taxes after the 2018 Woolsey fire, Christine D.’s horizon of five or six years could be too optimistic.
A Times analysis of Assessor data shows that 83% of the improvement value was waived for the 1,462 buildings in Los Angeles County recorded by Cal Fire as destroyed in the Woolsey fire. By 2024, the combined valuation of those buildings had climbed back to only 52% of what it was in 2018, indicating that only about half the homes had been rebuilt.
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