by Abrahm Lustgarten
February 3, 2025
Introduction:
Conclusion:(ProPublica) Houses in the Altadena and Pacific Palisades neighborhoods were still ablaze when talk turned to the cost of the Los Angeles firestorms and who would pay for it. Now it appears that the total damage and economic loss could be more than $250 billion. This, after a year in which hurricanes Milton and Helene and other extreme weather events had already exacted tens of billions of dollars in American disaster losses.
As the compounding impacts of climate-driven disasters take effect, we are seeing home insurance prices spike around the country, pushing up the costs of owning a home. In some cases, insurance companies are pulling out of towns altogether. And in others, people are beginning to move away.
One little-discussed result is that soaring home prices in the United States may have peaked in the places most at risk, leaving the nation on the precipice of a generational decline. That’s the finding of a new analysis by the First Street, a research firm that studies climate threats to housing and provides some of the best climate adaptation data available, both freely and commercially. The analysis predicts an extraordinary reversal in housing fortunes for Americans — nearly $1.5 trillion in asset losses over the next 30 years.
Read more here: https://www.propublica.org/article/cli ... mortgageNo one is abandoning Los Angeles. Its wealth, density and government support make it far more resilient than places like Paradise, California, the New Jersey shore or Florida. But it will be economically and physically transformed. Pacific Palisades will probably be rebuilt to its past splendor: Its homeowners can afford it. Altadena, a middle-class neighborhood, may face a different fate: Its properties are more likely to be snatched up by investors, gentrified and made unaffordable by both the cost of rebuilding, insurance and upscaling of new homes as they are rebuilt.
In that way, Altadena may prove to be the true harbinger — of a future in which no one but the rich owns their own homes, where insurance is a luxury good and where renters pay a monthly toll to large private equity landowners who may be better suited to manage that risk.
caltrek's comment: Not discussed in the article are the possible role newly applied technologies and science-based land management may play in mitigating future losses. Homes can be built in ways that will make them less prone to burst into flames because they are struck by flying cinders. Zoning regulations can be rethought to provide better fire breaks in places like Los Angeles. Infrastructure improvements can guarantee flows of water to better fight fires.
The potential for flood damage can be mitigated by well thought out flood control projects. Homeowners can be discouraged from rebuilding in a flood plain. Homes can be built slightly elevated above the ground so as to allow water to pass underneath with no damage to home interiors.
These are just mitigation measures that occur to me off the top of my head. Unfortunately, most of them do involve additional costs. That effect may tend to push housing prices such that new homes become increasingly unaffordable to the middle class. So, no matter which way you slice it, the effects of climate change on housing prices are likely not going to be good. This is the cost that will be foisted upon future generations for the selfishness and short-sightedness of past generations.
The likely failure of the political leadership of the Trump administration will probably worsen the problem for decades to come. Still, the federal government is not the only player in this drama. Political leadership at the state and local level may help address the issue in certain regions. The complexity of the situation renders forecasting of the situation in any statistically accurate way very problematic. As individuals we will need to hope for the best as we prepare for the worse.