The January 2025 wildfires that devastated Los Angeles County could result in economic losses between $5.2 billion and $10.1 billion through 2029, according to a comprehensive study released by county officials examining the disaster's far-reaching impact.
The analysis by the Los Angeles County Department of Economic Opportunity and the Los Angeles County Economic Development Corporation reveals the staggering scope of destruction from the Eaton and Palisades fires, which destroyed more than 16,000 structures including over 11,600 homes, 100 schools and nearly 200 commercial buildings.
The fires affected more than 6,800 businesses and over 47,000 workers across burn areas and secondary impact zones, with job losses estimated between 28,000 and 55,000 job-years. Labor income losses are projected at $2.2 billion to $4.2 billion, while tax revenue losses could reach $900 million to $1.6 billion.
"The January wildfires have tested our communities in unimaginable ways — taking homes, livelihoods, and peace of mind from tens of thousands of Angelenos," said Supervisor Lindsey P. Horvath. "This analysis makes clear the economic toll we are still reckoning with, but it also highlights the strength and resilience driving our recovery."
Despite the massive losses, recovery indicators show significant progress seven months after the disaster. As of July 31, 93% of filed insurance claims had been partially paid, totaling $20.4 billion. County officials reported that 95% of destroyed or damaged parcels have been cleared of debris within seven months, and nearly 800 rebuilding permits have been issued with an average processing time of 52 business days.
The study found that businesses in the direct burn areas generated $1.4 billion annually before the fires, while those in secondary fire areas accounted for $6.8 billion in annual revenue. The majority of secondary disruption occurred in the Eaton area, which represented 76% of affected businesses and 75% of job losses in these zones.
Even communities that avoided direct fire damage experienced significant economic disruption. Santa Monica, which sustained no structural losses from the fires, saw short-term but notable impacts on its tourism-dependent economy. The city experienced evacuation orders for northern neighborhoods and a 3% rent spike — the sharpest increase in the region — as displaced fire survivors sought temporary housing.
Pacific Coast Highway was closed for approximately three weeks from Santa Monica northward, cutting off normal traffic between Santa Monica and Malibu and disrupting business access and supply routes. The city's tourism sector initially suffered as images of Los Angeles "ablaze" dominated news coverage, though officials moved quickly to reassure visitors that attractions remained open and undamaged.
"The data makes clear what so many already know firsthand: the economic fallout from the January wildfires has been deep and widespread," said Kelly LoBianco, Director of the LA County Department of Economic Opportunity. "But this analysis is more than a report—it's a tool to guide targeted recovery."
The disaster prompted unprecedented government response. California approved a $2.5 billion wildfire relief package, while federal authorities allocated approximately $2.7 billion through FEMA. However, individual assistance remained limited, with eligible fire survivors receiving an average of only about $4,100 each from FEMA, covering roughly 7% of their losses.
Recovery efforts have shown resilience across affected communities. County analysis found that short-term rent spikes returned to normal trend levels within six months, and housing listings and sales in affected areas showed no evidence of mass resident flight.
The year-long study will continue tracking recovery through quarterly reports, monitoring business and workforce recovery, rebuilding progress, and housing market dynamics. Future sessions will focus on workforce needs in recovery industries and policy recommendations for long-term resilience.
"Through our collaboration with the Department of Economic Opportunity and other partners, LAEDC is committed to delivering data that helps policymakers and stakeholders allocate resources effectively and support a strong, coordinated recovery," said Stephen Cheung, President and CEO of the LA County Economic Development Corporation.
The January 2025 wildfires rank among the costliest disasters in U.S. history, with early damage estimates reaching over $250 billion as fires spread through affluent neighborhoods across Los Angeles County.