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From Fires To Flooding: Steep Losses, But Quick Recovery Expected For Ventura County

Ventura County and the surrounding areas have faced numerous natural disasters in recent months, with the wildfires that burned hundred of thousands of acres followed by deadly mudslides in the ravaged areas.

The cost to the county and other areas affected by the fires is still being tallied — more than 1,800 structures, most of them homes, have been destroyed or damaged — but there is hope that the area will be resilient long term even as some of the fires continue to burn deep in the woods.

The Thomas Fire as seen from Newbury Park
The Thomas Fire as seen from Newbury Park

"It’s a matter of supply and demand,” Cal Lutheran Assistant Professor of Economics Kirk Lesh said. “In this housing market, there’s less supply and more demand.”

So far the wildfire dubbed the Thomas Fire, which broke out in Ventura County in December, has charred 283,000 acres and destroyed more than 1,000 homes and damaged 280 structures. It was the largest of at least five fires that burned across the Southern California region in December.

On its website, CalFire said the Thomas Fire is 92% contained and it expects the blaze to be fully out by Jan. 20. 

The stripped vegetation caused by the fire along with the sudden storm in Southern California has created flash floods and muddy conditions with some homes slipping off their foundations in the wealthy enclave of Montecito in neighboring Santa Barbara and sections of Highway 101 turning into a river of mud. The Associated Press reports at least 15 people have died. 

The loss to property is one of the challenges of living in a fire-prone wildland-urban area, Lesh said.

Lesh said it is still too early to tell the estimated cost of the damage caused by the wildfires that occurred in Southern California. 

The Association of California Insurance Cos.’ director of public affairs, Nicole Ganley, said the insurance claims report from the California Department of Insurance is expected to come out sometime in February.

The fires that charred much of Northern California’s wine country months earlier have resulted in more than $1B in losses, the California Department of Insurance reported.

From Fires To Flooding: Steep Losses, But Quick Recovery Expected For Ventura County
Cal Lutheran University Economics Professor Kirk Lesh

Generally speaking on the issue of rebuilding, Lesh said it is a complicated issue. In the event of a catastrophe, once insurance pays out, most business property owners usually want to rebuild immediately, he said.

“It depends on the firm. They have to think about their workers and their business,” Lesh said. “Sometimes it’s too costly to pick up and move. Almost immediately they want to rebuild.”

Since it is still too early to learn what kind of commercial property was damaged or destroyed, the question Lesh brings up is whether they could find a suitable replacement space nearby.

"We don't know how much commercial space was burnt down and what it was used for," Lesh said. "If it was an office building, it's easier to find another building and move. But if it's a manufacturing company that seems much more complicated. You need to find suitable space that meets your needs or rebuild immediately."

For homeowners, despite the recent disasters, Ventura County and neighboring Santa Barbara County are nice areas to live, he said. He assumes most residents impacted by the fire would want to rebuild and remain.

 

Home prices in Ventura County are up 10.5% to $580K from $525K year-over-year, according to CoreLogic’s November data. In Santa Barbara County, home prices are up 16% to $528K from $452K.  

Lesh's biggest concern is the labor shortage in construction and if the city will attempt to put any regulations on where some homes could be rebuilt. Some of the homeowners whose homes on the hills slipped due to the mudslide, for example, may not be able to rebuild in that same location.

In 2005, La Conchita, a small community in Ventura County, experienced a fatal mudslide that killed three people and destroyed a dozen homes after record rainfall. In the aftermath, an expert called the area unsafe and one of the most slide-prone areas in the nation. Some residents went as far as asking the county to use eminent domain and prevent people from living in an area prone to mudslides. But the county, fearing lawsuits, resisted the call. Residents moved back into the area.

"It's going to be a slow process. This is a complicated, tangled issue that's going to take awhile to untangle," he said.

For visitors, the area is a great place to hang out at the beach and drink wine, Lesh said, adding that there probably will not be much of a tourism impact.

“I think property values and tourism are going to hurt in the short term,” Lesh said. 

But he is not too concerned when looking toward the future.

“There’s too much of a draw to this area,” he said.