The California city of Chico escaped the wrath of last month’s Camp Fire that destroyed communities 15 miles to the east. But now, it is facing the blaze’s economic fallout.
A major part of Chico’s workforce, including contractors, hospital staff and employees of the city’s California State University branch, lived in or near the town of Paradise, which was completely destroyed. About 20,000 have moved into Chico, according to local officials, worsening what was already a growing housing crisis. Others have had to move away, putting pressure on a tight labor market.
It’s the latest example of how extreme wildfires across California in recent years are squeezing local economies from the north to the south.
“Not only did we lose 17% of the county’s housing units, but 10% of our workforce lost their homes,” said Kate Leyden, executive director of the Chico Builders Association, which is setting up an RV park to shelter some 1,400 contractors, roofers and painters who previously lived in Paradise.
Chico, population 93,000, had a rental vacancy rate of just 1% before the fires. There were zero apartment vacancies in the city as of late November, while the number of single-family homes for sale had plunged to 50 from 250 before the fire, said David Bronson, president of Sierra North Valley Realtors.
“The fear is that people are going to leave,” said Chico Mayor Sean Morgan, making it harder on businesses in the city, where the unemployment rate was 4.2% in October. Major employers, from the Sierra Nevada Brewing Co. to the local hospital, are scrambling to arrange temporary shelter for their staff, the mayor said.
Construction workers are a particular concern, because they are in such high demand across the West Coast, Mr. Morgan added. In pricey Northern California, Paradise was a more affordable place for them to live than bigger towns nearby, including Chico.
“This has been a huge disruption to our industry, and there was already a massive shortage of labor before,” said Rick Carpenter, a 67-year-old roofing company owner in Paradise. He said he is down to two workers, compared with eight before the fires. Four left the region, and two are still sorting out where to live, he said.
Mitch Byers, 25, a foreman at a fencing company in Paradise, lost his home in the Camp Fire and moved his family to Arizona less than two weeks later.
“We didn’t really want to leave California,” said his wife, Roxanne Doty, 36, “but I did look up and down the state for places we could possibly afford.” She said she found that many were either in high-crime areas or high fire-danger zones.
Mr. Byers said the decision to live with his wife’s grandmother in Clarkdale, Ariz., while they started anew was tough: “I had a really good job.”
John Ross, owner of Northern California Fence, said Mr. Byers was one of three employees, out of a total of eight, who left his company because they couldn’t find anywhere to live after the fire.
Mr. Ross lost his home and business, including tools and trucks, and is now regrouping out of an RV trailer where he is living with his family about an hour north of town.
In Sonoma County, where a wildfire last year destroyed 5,300 homes, winery-related tourism has rebounded and officials are focused on helping residents rebuild. Yet only 98 homes have been completed a year on because of insurance delays and worker shortages.
Sonoma’s bigger employers have grappled with how to keep or hire people into the housing-starved region. Medtronic, a medical-device maker, has subsidized a commuter van to attract employees from farther cities and made working from home an option, the company said.
The overall economic damage from wildfires is tough to measure. Goldman Sachs estimates the Camp Fire and Southern California’s Woolsey Fire will shave about 0.1 percentage point off annualized U.S. gross domestic product in the fourth quarter.
California has spent $2.22 billion fighting fires in the fiscal year that began in July, according to state estimates — a number that’s expected to rise. Firefighting costs for the entire prior fiscal year were $2.33 billion, the highest since 2000.
In the short run, spending on firefighting and rebuilding creates jobs and adds to GDP, said William Shobe, an economist at the University of Virginia.
That doesn’t account for the wealth lost from property damage, however. Moody’s Analytics Inc. estimates the economic cost of the Camp and Woolsey fires at between $6 billion and $8 billion, partly because of the latter area’s pricey property valuations.
The 2017 and 2018 wildfire seasons in California — the state’s worst in terms of lives lost, acres burned and damages sustained — wiped out at least 24,000 homes, with nearly 14,000 of those destroyed in November’s Camp Fire, the deadliest and most destructive in state history.
Other long-term costs, like reduced tax revenue or chronic illness from smoke exposure, may not become apparent for years.
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