Full Recovery Could Take Five to 10 Years. More Than 40% of Losses Will Be Countywide
Nine months after the disastrous Palisades and Eaton fires, LA County provided the first of four planned reports of the recovery process. The data-intensive approach could not convey the enormous human cost involved, much less the stark underlying racial disparities involved. But it does provide some sense of policy effectiveness in the face of an openly hostile and destructive federal government that continues making war on its people.
A Sept. 15 webinar presented the first quarterly report of a study conducted by the LA County Department of Economic Opportunity (DEO) and the LA County Economic Development Corporation’s Institute for Applied Economics (IAE).
“The quarterly approach allows us to track how recovery is evolving over time, identify where resources may still be needed, and then adjust strategies as conditions change,” Shannon Sedwick, senior director of the IAE explained. The study tracks key indicators, including business and workforce recovery, rebuilding progress, and housing and infrastructure restoration. It analyzes both fires, with two distinct impact zones in each: the primary, direct burn areas, which suffered enormous damage that will take five to 10 years to completely rebuild, and the secondary fire areas, that “experienced significant disruption due to evacuation orders, smoke conditions, and business closures,” which averaged about 10 days in the Eaton area and 15 days in the Palisades.
There’s some good news, in terms of the immediate recovery response, but the long-term outlook is more troubling, with wide uncertainty dependent on how rapidly and effectively recovery efforts continue to be implemented. Short-term good news included the following:
- As of July 31, 2025, 93% of filed insurance claims had been partially paid, totaling $20.4 billion.
- 95% of destroyed or damaged parcels have been cleared of debris within seven months.
- Nearly 800 rebuilding permits have been issued with an average processing time of 52 business days.
- Short-term rent spikes occurred in fire-adjacent ZIP codes, with rents returning to 2024 trend levels within six months.
- Housing listings and sales in affected communities did not show evidence of mass resident flight.
At the same time, long-term losses could vary widely:
- Total output losses across all affected zones are projected between $5.2 billion and $10.1 billion.
- Between 28,000 and 55,000 job-years are expected to be impacted.
- Labor income losses are estimated at $2.2 to $4.2 billion.
- Tax revenue losses could reach between $900 million and $1.6 billion.
The wide variation reflects differences in three long-term recovery scenarios. The first is based on “median repair and reconstruction timelines for damaged buildings by damage level and building occupancy type according according to FEMA’s disaster damage and impact assessment model,” IAE economist Dr. Dan Wei explained, the second is based on doubling the timelines “reflecting potential financial permitting or resource challenges,” and the third based on tripling the timelines.
Under all three scenarios, 2025 losses were estimated to be about $1.26 billion in lost revenue and 8,200 lost jobs, a decline of 85-90% of the baseline levels. Scenario one reaches full recovery by 2028, scenario two shows 12-15% of losses persisting in 2029, with recovery delayed to 2032. And scenario three shows 30-35% losses in 2029, with full recovery in 2034. Thus, the effectiveness of recovery support will have enormous financial impacts.
There were more homes lost in the Eaton fire, but more business losses in the Palisades, though temporary business impacts were greater in the Eaton secondary fire area. Across both areas, residential losses dominate. More than 11,600 homes were destroyed, including over 11,000 single family homes and about 230 multifamily. Roughly 200 commercial and eight mixed use structures were destroyed, along with more than 4,200 utility and miscellaneous structures (typically non-habitable buildings tied to residential properties). A total of 1,863 individual businesses were identified in both areas (not including home-based businesses), which employed 9,610 people and generated an estimated $1.4 billion in annual sales.
More than 5,000 individual businesses were located in these secondary areas, employing over 37,000 people and generating about $6.8 billion in annual sales. Roughly 76% of affected businesses were in the Eaton area, accounting for 75% of employees and 74% of revenue, while 24% of businesses, 25% of employees and 26% of revenue were in the Palisades.
In the Palisades, the burn area covered about 22 square miles with just over 21,000 residents and nearly 9,000 households. It’s about 80% white, 7% Hispanic and 7% Asian. Nearly 78% held a bachelor’s degree or higher. Median household income is around $200,000 and home values average nearly $2 million. It’s characterized by high home ownership with many residents commuting to white collar jobs outside the area.
Just over 12,000 structures were assessed, 57% were destroyed, another 8% sustained varying levels of damage, and only about a third were undamaged. More than 5,000 homes were lost, as well as 51 school structures, several churches, and a mix of commercial and community-serving buildings. About 60% of the impacted businesses were in the Palisades, with 62% of affected employees and 71% of revenue.
The secondary fire area was 43 square miles with almost 36,000 residents and more than 15,000 households. It’s 78-79% white, 8% Hispanic, and 7% Asian. More than 75% of residents hold a bachelor’s degree or higher, and the median household income is about $179,000, and the average home values are closer to $1.9 million. It has a similarly high homeownership and occupational profile.
The Eaton burn area was 38 square miles with almost 23,000 residents and almost 8,800 households. It’s 44% white. 28% Hispanic and 19% Black. Nearly 58% held a bachelor’s degree or higher. Median household income here is about $143,000, with average home values closer to $1.2 million. Nearly 18,500 structures were assessed, with 51% destroyed, another 6% sustaining partial damage, and 43% left intact.
Over 6,000 homes were lost, including more than 5,100 single-family residences and 64 multi-family structures. In addition, 46 school structures were lost, along with losses to churches, commercial buildings, and infrastructure. Eaton had 40% of impacted businesses, with 38% of affected employees and 29% of revenue.
The secondary fire area for Eaton was 88 square miles with nearly 96,000 residents and over 35,000 households. It’s 49% white, 25% Hispanic, 19% Asian, and 6% Black, with 62% holding a bachelor’s degree or higher. Median household income is about $156,000, and average home values are around $1.4 million.
“Across all scenarios, direct losses make up roughly 50 to 60% of the total, reflecting the immediate damages and disruptions to affected businesses within the burn areas. Then the remaining 40 to 45% arises from the ripple effects across the entire county,” Dr. Wei said. “Suppliers, contractors, employees, and local consumer spending are all impacted by the reduced business activities.”
This is yet another reminder of the old union saying: An injury to one is an injury to all.