How Wildfires Reduce the Value of Land

The denuded hillsides have created flash floods and rock slides

 Living in California for the last 37 years, I have witnessed several wildfires and sometimes find myself traveling to affected areas.  Los Angeles County experienced unprecedented wildfires last month (January 2025), and I was able to see the Eaton fire from my home in Los Angeles, just as I remember watching the same area burn back in the mid-1990s.

The Los Angeles County Assessor is working on assessed value reductions for as many as 19,000 properties.  These “decline-in-value assessments” will be automatic, but interestingly enough, the Assessor said that these declines in value will only apply to the “Improved Values” of the affected properties, not the land values.

This presumes that land cannot burn down or be devalued by a fire because land is so permanent.

In many cases, in flat urban neighborhoods of California, if a house burns down it can be redeveloped with a more valuable one as well as two accessory dwelling units (now permitted by California state laws superseding local zoning), so it seems logical that such land would not usually go down in value.

On the other hand, in the hilly areas in the suburbs and mountains, fire can seriously reduce the value of the land, even when it is vacant.

The typical value-reducing problems include:

·       Flash flooding from denuded slopes. Live trees take up rainwater through their roots, whereas dead roots result in rain runoff continuing downhill, sometimes escalating to destructive speeds.

·       Pollution from the flash flooding, not only on the subject property, but the properties below.

·       Toxic runoff can also potentially poison wells in the area.

·       Rockslides can be particularly dangerous as storm runoff loosens the soil.

·       Particularly hot fires can actually burn all the organic matter in the soil.  This could delay the soil’s recovery for up to 20 years.

Here are some photographic examples from my work:

The home itself was built in a large clearing in the forest, but more than 90% of the trees in the surrounding 5400 acres were destroyed, and there are many dead trees upslope from the home. Also read my blog post: The Peculiarities of Appraising and Investing in Log Homes .

Behind the home you can see two years worth of rock slides plus a stone retaining wall to deflect sheet flooding from the denuded hillside above.

The creek downhill from the home is now clogged with debris from several flash floods.

The well should be tested for pollutants after several flash floods.

The ranch was originally listed for sale for $16 million before the fire, with the price reduced to $8 million afterwards.

For more information, go to my upcoming blog at www.FireAppraiser.com .