Placing high-density housing in the Wildland-Urban Interface does not make sense economically or socially. Rapidly escalating wildfire insurance rates will reduce affordability in WUI areas. Encouraging essential workers to reside in high-risk areas is socially unacceptable. Public subsidies may be best used to support affordable housing in urban infill locations. Durango should update its planning tools for land use.
The insurance industry uses statistics to properly price risk. The increasing incidence of wildfires is forcing the insurance industry to dramatically raise wildfire insurance rates. Carole Walker, director of the Rocky Mountain Insurance Information Association, said: “With the escalating fires, it will become an issue of insurance availability and affordability. Insurance is going to require you to make your home safer. You will likely pay a higher rate if your risk is higher.”
Higher insurance rates are highly likely to be passed on to renters of high-density housing.
If insurance companies cannot raise rates, they will withdraw from high-risk geographies (e.g., State Farm and Allstate are withdrawing from the California home insurance market). According to Wildfire Risk to Communities, a website created by the U.S. Department of Agriculture and the U.S. Forest Service, “Durango has a high risk of wildfire – higher than 84% of communities in the U.S.” And that risk may double by 2050, if the weather gets hotter and drier.
Fire-risk ratings are becoming widely available and this will affect real estate prices. For example, First Street Foundation hopes to make its “Fire Factor” risk score available to residential real estate listing sites and commercial property services. The combination of fire risks depressing real estate values and forcing insurance rates higher could become a headache for property owners and renters.
Even medium-density housing may be risky in fire-prone areas. According to insurance industry research, spacing structures closer than 12 feet favors fire. Gaps of 50 feet or more between homes are advisable. Roy Wright, chief executive of the Insurance Institute, said, “Conflagration happens when you get that proximity.” The December 2021 Marshall firestorm on the Front Range destroyed 1,084 structures, damaged at least 149 more and generated $2 billion in property losses.
Building high-density housing in the WUI also may exacerbate social inequalities. Wildfires disproportionately affect low-income populations because of a diminished ability to evacuate or relocate. Consciously encouraging essential workers (police, fire, municipal, service, etc.) to reside in high-risk areas is bad public policy.
Subsidizing affordable housing in wildfire prone areas is unlikely to solve the affordability issue and raises safety concerns. A better use of public funds would be to subsidize affordable housing in urban in-fill locations, where services are more available and wildfire risks are less.
I have not seen a wildfire mitigation plan for Three Springs, which leaves 44% of the area as open space. The Three Springs plan is a very quality development concept and potentially could be altered in the future because of the development of Durango Mesa Park, but no mention of that yet.
The other local development plan is La Posta Road, for which no wildfire mitigation study has been done, but clearly is a high-risk area.
Given the far-reaching effects increasing wildfire incidence, Durango should consider more forward-looking land use planning tools. The city of Durango adopted Wildfire Hazard Mitigation guidelines in 2014, but these may be insufficient for changing environmental conditions.
Tom DeHudy has four decades of institutional investment experience and a master’s degree in public policy.
