West Coast wild­fires add to the woes of a re­gional econ­omy al­ready slammed by pan­demic

New York Daily News - - NEWS -

The fires con­sum­ing the forests of Cal­i­for­nia and Ore­gon and dark­en­ing the skies over San Fran­cisco and Port­land are also dam­ag­ing a re­gional econ­omy al­ready singed by the coron­avirus out­break.

Wild­fires are de­stroy­ing prop­erty, run­ning up huge losses for prop­erty in­sur­ers and putting a strain on eco­nomic ac­tiv­ity along the West Coast that could linger for a year or more.

The credit rat­ing agency A.M. Best es­ti­mates that in­sured losses from the blazes in Cal­i­for­nia could top the un­prece­dented $13 bil­lion recorded in 2017 when the state was hit by three of the five costli­est fires in U.S. his­tory.

“We know that the dam­age is wide­spread, but we don’t re­ally know how many homes, how many struc­tures have been de­stroyed,” said Adam Kamins, an econ­o­mist who tracks nat­u­ral dis­as­ters for Moody’s An­a­lyt­ics. “I imag­ine the num­ber is go­ing to be an un­bear­ably high one.”

The fires are un­likely to make much of a dent in the over­all $20 tril­lion U.S. econ­omy. The fi­nan­cial fall­out will be mea­sured in the low bil­lions of dol­lars, not in hun­dreds of bil­lions or tril­lions. To make a na­tion­wide im­pact, Kamins said, it would take some­thing like Hur­ri­cane Ka­t­rina in 2005, which dis­rupted oil sup­plies.

But the eco­nomic pain will be in­tense in ar­eas dec­i­mated by fire, es­pe­cially poor towns in ru­ral Ore­gon and Cal­i­for­nia, pil­ing on at a time when many busi­nesses have al­ready suc­cumbed to the pan­demic-in­duced re­ces­sion. U.S. eco­nomic ac­tiv­ity col­lapsed at a record 31.7% an­nual pace from April through June. The virus and the steps meant to con­tain it have thrown mil­lions of Amer­i­cans out of work.

Fire wiped out much of the small com­mu­nity of Phoenix, in south­ern Ore­gon, in­clud­ing down­town busi­nesses like La Ta­p­a­tia, a Mex­i­can restau­rant opened in 1992.

“Good places like our own La Ta­p­a­tia, but so many other fam­ily run busi­nesses, [were] de­stroyed by the mas­sive fire,” its own­ers in­formed pa­trons in a Face­book post, ad­ding there was “lots to do,” but they hoped to some­day re­open.

Five hours away in coastal Lin­coln City, Ore., the Autobahn 101 sur­vived, but the cou­ple who own the Ger­manstyle pub lost their home, their chick­ens and nearly all of their per­sonal be­long­ings to fire. They sleep in a back room of the road­side busi­ness.

The pub had al­ready scaled back hours be­cause of the pan­demic, but co-owner Roy Baker was op­ti­mistic about its fu­ture and still has dreams of open­ing a small brew­ery in­side a ship­ping con­tainer out back.

“We’re get­ting back on our feet,” said Baker, who tem­po­rar­ily re­opened Sun­day af­ter rewiring the pub’s elec­tric­ity and dis­card­ing food that spoiled af­ter days with­out power. “Ev­ery­body’s com­ing to­gether and help­ing each other.”

The Bak­ers were among thou­sands of Ore­go­ni­ans who evac­u­ated; dozens are miss­ing and feared dead.

In Cal­i­for­nia, nearly 17,000 fire­fight­ers are bat­tling 29 ma­jor wild­fires. Since mid-Au­gust the blazes have de­stroyed 4,100 build­ings and killed 24 peo­ple in the state. Fires have en­gulfed 3.3 mil­lion acres of land in Cal­i­for­nia this year -des­o­la­tion greater in size than Con­necti­cut.

“This is like liv­ing through an apoc­a­lypse,” said Sarah Trub­nick from San Fran­cisco, where smoke from the fires has blot­ted out the sun.

Trub­nick had to tem­po­rar­ily close her restau­rant and wine bar, the Bar­rel Room, in the city’s fi­nan­cial district two weeks ago be­cause of the pan­demic. Even her restau­ra­teur friends who man­aged to stay open are now strug­gling with smoke that makes out­door seat­ing im­pos­si­ble. “It’s like ev­ery day is some­thing new,” she said.

Wild­fires once did lit­tle eco­nomic dam­age be­cause they oc­curred in re­mote forests. But Amer­i­cans in­creas­ingly have moved into what was once wilder­ness, leav­ing them­selves, and their homes and busi­nesses more


In 2014, Max Nielsen-Pin­cus, chair­man of the en­vi­ron­men­tal science and man­age­ment depart­ment at Port­land State Univer­sity, and re­searchers from the Univer­sity of Ore­gon and the U.S. For­est Ser­vice stud­ied the eco­nomic im­pact of wild­fires. They found the fires ac­tu­ally gen­er­ated short-term eco­nomic gains in small com­mu­ni­ties as fire­fight­ers checked into lo­cal ho­tels and ate at lo­cal restau­rants. Lo­cal la­bor­ers cleared roads and helped re­build.

But such eco­nomic bumps are usu­ally short-lived. By spring, af­fected economies typ­i­cally lost mo­men­tum and fell into a pe­riod of slower growth that could last up to 18 months. Tourism could suf­fer be­cause “vis­i­tors may not want to re­turn fear­ing a black­ened land­scape,” ac­cord­ing to the pa­per pub­lished in the jour­nal For­est Pol­icy and Eco­nom­ics. And eco­nomic ac­tiv­ity such as log­ging can be wiped out.

Re­build­ing can kick-start a lo­cal econ­omy, but a lack of re­sources to see those plans through can lead to “a pe­riod of limbo.”

“Ur­ban ar­eas like the sub­urbs of Port­land -- they’ll prob­a­bly re­cover pretty quickly,” Nielsen-Pin­cus said in an in­ter­view. “But these ru­ral com­mu­ni­ties that are im­pacted by nearby fires — this could be a drag on their econ­omy that lasts months or years.”

He said poor ru­ral com­mu­ni­ties, like those in Ore­gon’s hard-hit San­tiam Canyon east of Salem, will need fed­eral and state aid.

The num­ber of wild­fires de­clared dis­as­ters by the Fed­eral Emer­gency Man­age­ment Agency has grown in re­cent years. FEMA, for in­stance, de­clared 43 Cal­i­for­nia wild­fires dis­as­ters from 1980 to 1999 — but 300 from 2000 to 2019. Ore­gon had no such wild­fires from 1980 to 1999 but 63 over the past 20 years, ac­cord­ing to FEMA data an­a­lyzed by the in­sur­ance web­site QuoteWizar­d. Only a frac­tion of wild­fires are des­ig­nated dis­as­ters by FEMA.

All five of the costli­est fires in U.S. his­tory, mea­sured by in­sured losses, have oc­curred in the last three years, all in Cal­i­for­nia, ac­cord­ing to the In­sur­ance In­for­ma­tion Institute. That in­cludes the Novem­ber 2018 Camp Fire that de­stroyed Par­adise, Calif., and left more than 80 peo­ple dead and up to $10.7 bil­lion in in­sured losses.

Scenes of dev­as­ta­tion on the West Coast play out in San Fran­cisco (be­low), Sandy, Ore. (near right above), and in Butte County, Calif. (both pho­tos op­po­site page).

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