
the Pacific Palisades as the wildfire rages on
and firefighters respond. (David Swanson /
Getty)
Climate change is a highly debated topic as its urgency dominates national headlines. From hurricanes ravaging the southern U.S. to earthquakes toppling homes in Oklahoma, and wildfires destroying landscapes in California, natural disasters not only impact families but also influence environmental changes, housing markets, and the economy.
Wildfires occur naturally to maintain ecosystem balance, keeping them healthy and thriving. According to the California Department of Forest and Fire Protection, 95% of wildfires are caused by human activities, while the remainder are naturally occurring. Natural wildfires help clear dangerous brush and debris, control invasive species, and allow certain plant species—such as Jack Pine trees—to germinate. Jack Pines, for example, release seeds when their resin-coated pinecones burst in extreme heat.
However, climate change, dry weather, and vegetation provide the perfect conditions for wildfires to grow out of control. Human activities like campfires, power lines, vehicle sparks, and arson further contribute. Firebreaks, such as roads, bodies of water, and large rocks, act as buffers to stop the spread of wildfires. Firefighters work to contain fires by removing one of three key elements: heat, oxygen, or fuel. Heat can be reduced using water or fire retardants delivered via pumps, engines, helicopters, or airplanes. Fuel can be removed by manually clearing vegetation or setting controlled burns. More on fire suppression tactics can be found through the U.S. Department of the Interior.
California has implemented building codes to reduce wildfire damage. These include R337.1.1 Scope, R337.1.2 Purpose, and R337.1.3 Application, which outline proper materials and systems to protect properties in high-risk areas. These measures aim to minimize property loss in fire-prone regions. Despite such efforts, thousands of residents face displacement, with the housing market struggling to meet demand.
Daniel Fairweather, a chief economist for Redfin, said, “Like much of the U.S., California is facing an acute housing shortage. The wildfires themselves are also making housing more expensive. After a town burns, builders come in and construct new homes, which are typically more expensive.” Real estate agents agree that the surge in demand for housing combined with the reduced supply will drive up prices. Rental units, for instance, have seen prices increase by 15% to 20% in just one week, according to Los Angeles real estate agent Jeremiah Vancans. Restoration efforts are expected to take three to five years due to the time required for clearing, insurance settlements, permitting, and labor shortages. For more details, visit CNN’s report.
Predatory buyers pose another challenge for displaced families, exploiting desperation to purchase land below market value. Meanwhile, insurance companies are pulling back coverage. Last year, State Farm discontinued coverage for over 72,000 properties in California, citing increased risks due to climate change, according to the San Francisco Chronicle. Policies that do exist often provide only basic property damage coverage, leaving many without adequate resources to rebuild. To address this, California implemented the Fair Access to Insurance Requirements Plan (FAIR), ensuring basic property coverage for residents. However, FAIR plans carry a $3 million limit, which may not fully cover losses. Between 2020 and 2024, the number of FAIR policies doubled to nearly 452,000.
Some argue insurance companies fail to fulfill their purpose, especially in states like California, Florida, Texas, Oklahoma, and Louisiana, which experience frequent natural disasters. Homeowners invest thousands in insurance only to find their claims denied. Many of those affected are not wealthy and have spent years saving for their homes, which often hold irreplaceable sentimental value.
At the end of 2024, California introduced a rule requiring insurers to increase coverage by 5% every two years until reaching 85% of their market share. However, this move is expected to result in a 40% hike in premiums without expediting policy issuance. More information can be found at CapRadio.