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Homeowners in the U.S. are increasingly moving into lands on the edge of society, trying to find a suitable blend of modernity and nature. This has given rise to areas known as the (WUI), typically found in western states – and that scenery comes with a potentially flammable catch.

The WUI is notorious for wildfires, yet it is the fastest-growing land-use type in the country with about 35% of the nation’s residential housing located there. A new 51�Թ������ܿƴ� study published in the Journal of Regional Science attempts to understand the link between wildfire risk and how it impacts residential development in these fire-prone areas.

“Many people like to live in places that happen to be susceptible to wildfires,” said study co-author Nicholas Irwin, an assistant professor in the 51�Թ������ܿƴ� department of economics. “It’s very attractive where the forest is, with beautiful trees in your backyard and unspoiled wilderness. People want to live there because of all of the natural amenities.”

The popularity of the WUI speaks for itself: about 30.8 million housing units in the U.S. existed there in 1990. That’s grown to 44 million units just 20 years later – and it’s continuing to rise.

Study co-authors Irwin and Shawn McCoy, director of the Lied Center for Real Estate in 51�Թ������ܿƴ�’s Lee Business School, evaluated the rates of new single-family home construction in Colorado over 16 years and across regions hit by large wildfires that were FEMA-declared disasters.

“We found that while fires tend to reduce development, fires don’t stop development,” said McCoy. “If a fire hits an area, consciousness of the risks increases and development sees a lull for about five years. But afterward, the reduction seen during those five years is offset in less than one month of the standard building rates we’re seeing.”

The study finds that cumulatively, wildfires in Colorado lead to a total reduction of 134 homes being built in risky areas of WUI during that five-year period. Afterward, an average of 2,000 homes are developed in these same areas per year.

In the absence of ‘big-shock’ events such as wildfires, subjective risk perceptions may understate risk actualities and the memory of their dire aftermath fades quickly – both for developers and homeowners.

“When you drive past an accident on the highway, it might cause you to change your driving behaviors, at least for a moment,” Irwin said. “It’s the same idea for wildfires. It’s this shock that brings the risk to the forefront of your mind.”

The research says that as more people move into WUI areas (which include states such as California, Colorado, Wyoming, Idaho, Montana, Arizona, and Nevada), the societal costs associated with wildfires increase. The 2012 Waldo Canyon fire in Colorado ranks as one of the ten costliest fires in U.S. history with a loss of $477 million. From 2000 through 2015, 92 FEMA-declared wildfires happened in Colorado.

“I would never encourage people to stop doing anything, but our current development is putting more people and houses at risk,” said Irwin. “We need to rethink our patterns.”

PUBLICATION DETAILS

was published online March 30, 2023, in the Journal of Regional Science.

An additional researcher in the study is Katie Jo Black, Department of Economics, Kenyon College, Gambier, OH.