Wildfires are a frequent and costly hazard in California. Climate change has increased the likelihood and intensity of extreme fire weather while increased development in fire-prone wildlands has placed more people and assets at risk. Together, these factors magnify the potential risk associated with wildfire events resulting in the escalation of home losses in California. In early 2025, 32 million acres of land were categorized as Fire Hazard Severity Zones, containing about 620,000 to 770,000 single-family homes at risk of wildfires. But, California is not helpless: investing in a home hardening sector—a crucial wildfire preparedness measure—will increase wildfire resilience and bring economic benefits.
Wildfire home hardening is the process of retrofitting the exterior of homes and altering their immediate surroundings to increase resilience to embers, flames, and radiant heat. Retrofitting homes with hardened materials is a crucial, proven step in reducing losses associated with wildfires by increasing community resilience and mitigating post-disaster expenses. However, little information is available on how these home hardening investments will support local and state economic development.
In 2025, Earth Economics built on costs from Headwater Economics’ report, Retrofitting a Home for Wildfire Resistance Costs and Considerations, Barret, K., Quarles, S. (2024), to develop a high-level analysis that quantifies how investments in a range of home hardening approaches for existing homes can support jobs, economic activity, and tax revenues.
The report finds that each dollar invested in retrofitting homes ripples throughout the economy and returns about $1.70 in total economic activity. Hardening a single-family home in California can cost between $2,000 and $87,000, depending on the level of hardening. The low estimate represents low-investment high-return strategies while the high estimate includes all major renovations such as full roof, siding, and deck replacements.
Depending on the level of hardening pursued by homeowners, direct expenditures to harden these homes can range from $1.2 billion to $67 billion. Such an investment would bring great benefits for home loss mitigation and the economy: For comparison, the losses associated with the 2025 Palisades and Eaton fires are estimated to be upwards of $76 billion to $131 billion.
If these homes were moderately hardened, it could cost upwards of $16 billion to $20 billion. These direct expenditures would support between 74,000 to 92,500 jobs, bolster economic growth by $10.3 billion to $13 billion, add $21 billion to $26.5 billion in economic activity, and increase current tax bases upwards of $593 million to $742 million in local and state taxes and $1.4 billion to $1.7 billion in federal taxes.
Understanding the potential magnitude of investment required for home hardening and its economic benefits will support decision-makers in their resilience spending priorities.
Better understanding the magnitude of these economic benefits will support decision-makers as they prioritize investments in wildfire resilience.
“The benefits to lives and livelihoods that home hardening brings for communities living in fire-adapted landscapes have been known for some time. Now, with Earth Economics’ report, we can see the real economic benefits to the California economy a mature home-hardening sector could bring. Yet only 4 percent of California’s budget goes towards community hardening. Supporting the new home hardening sector is a major opportunity for California—both for saving lives and boosting the economy as a whole.”
