Nearly 70,000 Denver-Area Buildings At Risk Of Wildfire Damage Or Loss

There are nearly 70,000 residential buildings in the Denver area that are at risk of being lost to wildfire, according to a recent report by real estate data firm CoreLogic, and that total is expected to climb as the environmental impacts of climate change worsen. 

The tally includes not just single-family homes but also apartment complexes and condos. The buildings most at risk in the Denver metro are along U.S. 6 and Interstate 70 on the west side of Denver, CoreLogic Senior Product Manager Jamie Knippen told Bisnow in an interview. 

One reason is their proximity to fuel like grasses, shrubs and dried trees, all of which contributed to the spread of the Marshall Fire in Boulder on New Year’s Eve 2021, which destroyed more than 1,000 homes and other structures. Knippen added that the number of acres burned in Colorado over the last decade has increased significantly, which makes it more imperative for owners to fortify their properties before it becomes too expensive for insurers to underwrite them.  

“The threat of wildfire is real,” Knippen said. “And because of that, it’s really important for property owners to mitigate that danger at the property level as well as opening conversations with insurance carriers to decrease potential losses as well.”

The Marshall Fire was the most destructive in the state's history, causing $2B worth of property damage and burning closer to communities than ever before seen in the Denver metro. Among the structures damaged was a Target in Superior, Colorado, along with several other stores in the same shopping center. 

Although an investigation would later show the fire was sparked in part by a power line rather than a natural cause, the Marshall Fire brought with it fresh realizations about the risks of structures farther into developed areas.

And as the metro grows, new apartment developers are increasingly building farther from city centers and into areas at greater risk of fire.

To protect properties from wildfires, Knippen suggested commercial property owners take preventive measures such as clearing trees and shrubs directly surrounding their property. Property owners could also replace their regular windows with double-paned ones, Knippen said. There are also community-level and regulatory avenues that local governments can take, such as requiring more wildfire mitigation materials in their building codes or creating a community wildfire protection plan.  

The increasing risk of wildfires has also made several insurance companies rethink whether they will issue policies in states like Colorado and California, which could make homeowners insurance more expensive going forward. Colorado Public Radio reported in April that the average cost to insure a home in Colorado has increased by 50% over the last three years because of wildfire risk. 

A spokesperson for the Colorado Division of Insurance told Bisnow in an email that the affordability of insurance is a top priority for the agency. However, addressing the issue has proved challenging. 

“Wildfire risk is certainly part of [the increasing cost of insurance], but so are other weather-related risks like hail and high winds,” said Vincent Plymell, assistant commissioner for communications at Colorado’s Department of Regulatory Agencies, which oversees the insurance division.

Across Colorado, CoreLogic found there are more than 330,000 residential properties that are at risk of being lost to a wildfire. In all, the 330,000 buildings could cost more than $140B to rebuild. The total number of properties at risk in Colorado is second only to California, which has more than 1.2 million properties in harm’s way that have a reconstruction value of about $760.8B, according to CoreLogic. 

The threat of wildfire in Colorado is nothing new given the state’s arid climate. But that threat has increased in recent years as drought conditions persist and climate change continues to make the summers warmer in the Centennial State. 

According to the U.S. Drought Monitor, southwest Colorado counties stretching from Huerfano to Mesa are experiencing moderate drought conditions, which is a dramatic improvement from last year, when several parts of the state were experiencing severe drought. One reason why Colorado’s drought conditions have improved in 2023 is that the state saw an increase in rainfall and snowpack last year. 

However, that improvement may be short-lived, as changing global weather patterns “could potentially lead to more severe wildfires in upcoming seasons,” according to CoreLogic.