As we move toward the end of the 2013 wildfire season, a new insurance industry analysis has found that well over a million households are now at high risk of burning in the American West, with potential losses approaching $200 billion. Or it might be 3 million, depending on how you count.
This is another facet of the “new normal” in western wildfire, in which fires burn bigger and hotter than historical patterns, and take out an ever-increasing number of homes, even when the number of fires actually declines.
At the same time, firefighting costs and property loses continue to climb over a season that has grown longer by a month on each end, now starting in May and running through October.
While the property losses may be confined to unfortunate homeowners (and others in their hazard insurance pool), the firefighting costs incurred by the U.S. Forest Service are borne by the Minnesota taxpayer on an equal footing with Coloradans and Californians, and driven up by continuing new construction in the fire zone.
The 2013 season may actually turn out to be milder than some recent years — though still more destructive than long-term averages —despite huge fires in Colorado, California and Arizona, including the Yarnell Peak fire that killed 19 elite firefighters in June.
Nevertheless, according to the Washington Post, the federal funds budgeted for firefighting had all been spent by the middle of August, leaving the U.S. Forest Service to raid various other accounts — including some for fire prevention and homeowner education programs.
The new risk assessment is the work of CoreLogic, which markets data and analytical products to insurance and real estate companies. It focuses on the 13 Western states that contain nearly 90 percent of the acreage lost to wildfire last year: Arizona, California, Colorado, Idaho, Montana, Nevada, New Mexico, Oklahoma, Oregon, Texas, Utah, Washington and Wyoming.
Building in the fire zone
CoreLogic attributes the rising level of risk to changing wildfire patterns, driven in part by climate shifts toward warmer and drier regimes, and partly to the unchanging pattern of building homes at the forest’s edge — the so-called wildland/urban interface.
Wildfires most often originate in wildland areas, and therefore the only way to understand the risk to residential dwellings is to define where the wildland area comes into contact with a developed area. The interface provides a means of locating the intersection of potentially high-risk fire areas and large numbers of homes.
Approximately 40 percent of the 115 million single-family homes in the U.S. (as of 2008) are located within this area. Between the years of 1990 to 2008, there were close to 17 million new homes built in the U.S., of which 10 million were constructed in the Wildland-Urban Interface. While most of these homes would be classified as Urban due to their location within an urban setting, there is a strong likelihood that many homes in the interface may have a higher wildfire risk due to their proximity to high-wildfire-risk zones beyond the urban boundary.
To illustrate this point, consider that 97 percent of all wildfires are extinguished before they are 10 acres in size. It would seem that this ability to extinguish most small fires would effectively reduce property loss, but a review of the number of structures lost to wildfire each year suggests otherwise. In fact, the number of homes that have been destroyed in recent years has increased dramatically.
This is the second edition of CoreLogic’s annual Wildfire Hazard Risk Report, and the trade publication Insurance Journal, which takes CoreLogic’s work seriously, notes that its tally of high-risk homes (1,262,022) is 62 percent higher than last year’s figure.
However, a CoreLogic representative told me than the reports aren’t designed for precise year-over-year comparisons because tallies can be raised somewhat by new data, as well as by construction of new homes built in harm’s way.
Conservative counting
It should also be noted that the CoreLogic figures mentioned thus far can be considered conservative, for a few reasons:
- The 1.2 million figure for high-risk homes describes those whose property boundaries include terrain considered to be at high risk of wildfire, according to CoreLogic’s proprietary modeling.
- A separate calculation including homes that are merely near a zone of high fire risk — for example, a home in a town at the edge of a fire-prone forest, in places like Yarnell, Ariz., or the Black Forest area outside Colorado Springs — raises the figure above 3 million.
- The dollar amounts of losses include only “current structure value … and do not consider underlying land value, replacement costs, contents, auto, life or business interruption.”
And plenty of new homes are being built in the path of fire, especially as economic recovery continues:
In fact, economic recovery over the past year could be another potential factor contributing to increased wildfire risk in 2013, particularly in California. As home prices have begun to rebound, buyers are left with fewer affordable options and, as a result, seem to be turning to new home construction. As of May 2013, new home construction in California was up 40 percent year over year, and up 13.5 percent month over month from April to May of 2013.
As is often the case in California, residential property is expanding outward, into less densely populated outskirts of metro areas and closer to the Wildland-Urban Interface, where wildfire risk is significantly higher.
As for weather and climate trends:
Though this year’s fires haven’t been quite as frequent or widely destructive as the 2012 record-setting season, drought conditions that reached unprecedented levels last year are still plaguing many of the western and plains states and are forecasted to persist into late fall. Last year, only five states in the western U.S. recorded precipitation at or above their normal levels, and the high temperatures and dry conditions converted existing fuel into tinder, adding even more volume to the fuel load from dead and dying vegetation.
Meanwhile, record-high 2012 temperatures exacerbated extended drought conditions in many areas. Every state, in fact, recorded above-average annual temperatures, with new record highs set in 19 different states. . . .
[C]ooler temperatures and higher levels of rainfall might result in lower levels of wildfire activity for a particular region over the course of a year or two, but at the same time allow for increased vegetation growth and accumulation of fuel that could drive higher wildfire activity in future seasons. This is one hypothesis for why California had relatively less wildfire activity recorded in 2010 and 2011, and then experienced a significant jump in acres burned in 2012.
California’s recent Rim Fire supports this hypothesis as yet another fire fueled by drought and historic fire suppression that is contributing to an active wildfire season in 2013. According to U.S. National Park Service Director Jonathan Jarvis, these large fires are likely to continue in the western U.S. into the foreseeable future.
* * *
The full CoreLogic reports, which are readable and attractive as well as data-rich, are available online in PDF format with free registration.
