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Los Angeles County could lose between $4.6 billion and $8.9 billion in economic production over the next five years since the Pallisard and Eton fires.
It is estimated that federal, state and local governments have missed up to $1.4 billion in tax revenues from 2025 to 2029, depending on how long it takes to rebuild, the report says.
“Pressure is important in the recovery process, especially from an economic standpoint,” former California Gov. Grey Davis said at a Zoom press conference Thursday.
The faster the fire area is rebuilt, the faster the economy recovers, said Davis and LA County superintendent Kathryn Berger. Both sit on the board of the Southern California Leadership Council, which commissioned the report.
“This report is evident in telling us that our strongest advancement is to encourage rebuilding our homes, businesses and communities,” Berger said.
The report analyzed three trajectories of recovery. Ended in 2028 and coincides with the timeline of earthquake model recovery from the Federal Emergency Management Agency. A recovery that ends in 2032, doubles FEMA timeline. And it will end in 2034, tripling the timeline.
“In all scenarios, the initial direct economic losses in burned areas reached sales revenues (or 90% of baseline levels) and approximately 8,200 jobs (or 85% of baseline employment) in 2025.”
Job losses in Los Angeles County could reach up to 49,110 employment years (referring to people working full-time for a year), based on recovery times, according to research, where work losses range from $1.9 billion to $3.7 billion.
The Los Angeles County industry, which is bears the brunt of economic damage, includes real estate and rental, retail, professional and scientific technical services. The real estate and rental sector alone is expected to lose between $515.8 million and about $1 billion.
Property damage analyzed by counting 20,218 parcels of land within the burn area ranges from $28 billion to $53.8 billion based on a continuation of the recovery period, the study said.
Stephen Cheung, president and CEO of the nonprofit, revealed at an online press conference Thursday that it did not include losses to businesses outside of burned areas, including companies struggling with utility shutoffs and other setbacks.
Compared to the new study, Times analysis found that 13,338 land parcels affected by the fire were valued at $16.7 billion after adjusting for the level of damage to each structure as determined by the California Forestry and the Fire Prevention Department. Data reviewed by the Times shows tax revenues drop by more than $61 million a year.
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