LA County and LAEDC Release Second Public Update on Wildfire Economic Impact Study

New analysis finds wildfire recovery remains highly localized, with rebuilding of residential and commercial properties expected to generate thousands of jobs across Los Angeles County

Los Angeles, CA — The Los Angeles County Department of Economic Opportunity (DEO) and the Los Angeles County Economic Development Corporation (LAEDC)’s Institute for Applied Economics hosted the second public webinar in a four-part series examining the economic impacts of the January 2025 Eaton and Palisades fires. This year’s long economic impact study is funded through the California Jobs First initiative by the Governor’s Office of Business and Economic Development and Labor and Workforce Development Agency.

The Los Angeles Wildfires: An Economic Update #2, presented on January 21, 2026, provided updated analysis on business activity, employment, rebuilding costs, housing market dynamics, and tourism-related activity. Supervisors Lindsey P. Horvath and Kathyrn Barger provided opening remarks.

Building on findings first released in September 2025, this second update delivers a deeper, data-driven assessment of how wildfire impacts and early recovery continue to unfold across the direct burn areas of the Eaton and Palisades fires and the broader Secondary Fire Areas (SFAs), which experienced significant disruption due to evacuation orders, smoke conditions, and business disruptions.

The analysis shows that wildfire impacts across Los Angeles County remain highly localized but economically interconnected. Severe job and business losses in primary burn areas continue to shape rebuilding demand, workforce needs, housing market pressures, and uneven tourism recovery, underscoring the importance of tracking these dynamics together as the recovery process evolves over time.

Key findings include:

Labor Market Impacts:

• Employment losses between Q2 2024 and Q2 2025 were steepest in primary fire areas, with jobs declining by approximately 19 percent in Eaton and 26 percent in Palisades, compared with essentially flat employment countywide.
• Job losses were concentrated in locally serving and consumer-facing industries, including accommodation and food services, retail trade, administrative support, and arts and recreation.

Rebuilding Costs and Workforce Demand:

• Total rebuilding activity is estimated to generate between 141,000 and 209,000 job-years over multiple years, with approximately 85 percent tied to direct construction employment. The rebuilding process will take place over multiple years. One job year is equivalent to one job created or sustained over one year, not necessarily unique workers.
• The Palisades fire area accounts for roughly two-thirds of total rebuilding labor demand, reflecting the scale and intensity of damage.

Housing Market Dynamics:

• More than 2,800 rebuilding and repair permits had been issued as of mid-January 2026, though only about one-fifth of damaged parcels had submitted permit applications, indicating uneven recovery progress. The one-fifth is only for repair/rebuilding permits for the main residential structure on the parcel, not more general permits covering things like pools.
• Housing sales and rental impacts varied by geography, with ZIP codes closest to the Palisades fire perimeter experiencing sustained rent increases, while Eaton-adjacent areas showed shorter-lived effects.

Tourism and Visitor Activity:

• Tourism-related activity remained weakest in primary fire areas, particularly in Palisades, while secondary areas showed clearer signs of normalization by late 2025.

Opening remarks during the webinar were delivered by Los Angeles County Supervisors Lindsey P. Horvath and Kathryn Barger, followed by a presentation of findings from LAEDC’s Institute for Applied Economics and discussion with DEO leadership.

“The economic impacts of the 2025 wildfires extend far beyond the burn areas, affecting workers, businesses, and housing markets across Los Angeles County,” said Los Angeles County Board Third District Supervisor Lindsey P. Horvath. “This report reflects both the challenges ahead and the determination I see every day in Palisades, Malibu, Sunset Mesa, and Topanga Canyon. With clear data and sustained collaboration, we can support a recovery that restores opportunity, stability, and hope for the communities still rebuilding.”

“As we continue the work of rebuilding after the January wildfires, this economic analysis underscores the profound impact on our communities—from lost homes and businesses to displaced jobs. I remain committed to streamlining processes and advocating for policies that protect our residents and ease their path towards rebuilding their homes and lives. This research will help to further inform the needs of our workforce and guide the path forward,” said Los Angeles County Board Fifth District Supervisor Kathryn Barger.

“The data makes clear what so many already know firsthand: the economic fallout from the January wildfires has been deep and widespread,” said Kelly LoBianco, Director of the LA County Department of Economic Opportunity. “But this analysis is more than a report—it’s a tool to guide targeted recovery. By understanding where losses are greatest, we can ensure resources reach the workers, businesses, and communities that need them most. DEO remains focused on an inclusive, equitable recovery, one that not only rebuilds but reimagines a more resilient economic future for LA County.”

“This second quarterly update shows that while the most severe economic impacts of the wildfires remain concentrated in the primary burn areas, recovery is unfolding unevenly across Los Angeles County. The data make clear that rebuilding, workforce demand, housing dynamics, and tourism recovery are deeply interconnected, and that the scale of economic activity required to support recovery will extend over multiple years,” said Stephen Cheung, President and CEO of the LA County Economic Development Corporation (LAEDC).

The year-long study and quarterly webinar series will continue through mid-2026, tracking recovery indicators including workforce demand, rebuilding progress, housing stability, tourism activity, and broader economic conditions. Future updates will focus on workforce needs in recovery-related industries, housing and infrastructure restoration, and the long-term economic foundations required for resilience.