Microbusinesses in the path of January’s Eaton and Palisades fires bore the brunt of the impact to the local business community in both areas, and those that were not destroyed remain vulnerable, a UCLA research series found.
Silvia González, director of research at the UCLA Latino Policy Institute, said the research series was done through a collaboration with UCLA’s Center for Neighborhood Knowledge, which provided the expertise in tracking neighborhood level changes.
Microbusinesses, described as those with one to nine employees, accounted for one-third to one-half of the businesses destroyed in both fire areas. González described microbusinesses as the backbones of both local economies, particularly in Altadena.
“The vulnerability was not just for those businesses that are in a commercial lot, a commercial building, a commercial parcel but also those home-based businesses that lost both their homes and their livelihood with the loss of their businesses,” González said.
The study was split up into three sections: establishing a baseline of the business landscape before the fire, quantifying the structural damage and examining the short-term outcomes such as business closures and parcel sales.
Out of the thousands of businesses in both fire areas, the vast majority, according to researchers, are microbusinesses that historically face the greatest barriers to accessing aid while providing essential services to their communities.
The majority of private businesses in both Altadena and Pacific Palisades were situated inside the fire perimeters. In the Palisades, it was every nine out of 10 businesses, while in Altadena it was seven out of 10.
In Altadena, few businesses were tied to parcels that have been sold with many located on residential properties. By contrast, in the Pacific Palisades, a greater number of businesses were impacted linked to commercial parcels.
In both communities microbusinesses made up the majority of delisting of businesses. The research acknowledged that some businesses that remain listed have not yet reopened.
González said it is still early in the research process post-wildfires, and that there is a data lag that requires monitoring going forward. The next phase of the research, González said, will be done by convening small business owners in both fire areas to talk about their current needs and what policy recommendations they’d like legislators consider.
“Recovery is taking a lot of time,” González said. “Now there’s not a lot of the same resources that were available at the beginning yet at the beginning these small business owners really did not have the capacity and the space in their minds, in their daily life to be able to take advantage of those resources and now those resources are starting to disappear when they’ve actually settled in and are starting to think about a future of their businesses.”
Meredith Miller, co-owner of Webster’s Pharmacy in Altadena said that overnight, her business lost at least 50% of its customer base and income because of those who lost their homes or were displaced.
“Our business has steadily increased from the first couple of months post-fire,” Miller said in an email. “We’re close to our pre-fire prescription numbers and the closure of the Rite Aid chain has certainly been a boost for us.”
She said the biggest concern for business owners like herself is the time it will take to rebuild Altadena’s residential community.
“We recognize that it will take several years to populate Altadena as before and we are all worried about how to sustain and more importantly grow in this challenging situation,” Miller said. “Unfortunately, overhead costs are not going down, commercial rents are tied to long-term leases with annual increases, insurance, taxes, payroll expenses all continue to go up.”
In addition, many businesses are faced with the tariff impacts that have forced businesses like Webster’s to increase prices.
Miller said Webster’s fundraised to help produce a commercial for digital and cable platforms encouraging people to shop and dine in Altadena during the holidays.
The key moving forward, González said, is to be more proactive in coming up with policy recommendations at the state level instead reactive for the next disaster.
“I would think about the ripple effects of these types of disasters in our communities when we know that dollars invested in small businesses tend to stay in the community,” González said. “They provide local jobs, they provide neighborhood stability, they provide revenue for the local tax base so that means revenue for schools, for public services, infrastructure. So there is definitely a huge consequence and ripple effect in the local community and beyond if these businesses are not supported through the recovery process.”