This study carries out the first evaluation of the impacts of ravines and gullies in urban areas in Brazil considering environmental damage, such as costs related to land restoration and erosion control, infrastructure destruction, economic losses and income losses related to property and urban land taxes. In this study, the city of Bauru, Brazil, has been selected as study site, where three areas were chosen due to the large impact that ravines and gullies have caused over the past two decades. Our analysis indicates that the total damage exceeds US$ 173 million and is mainly related to land degradation. The cost of replacing the eroded soil in these three areas is estimated at approximately US$ 13.3 million. Furthermore, according to our analysis, urban areas affected by ravines and gullies represent problems similar to brownfields. The assessment of the impacts and challenges associated with urban ravines and gullies can help promote accountability by those responsible for their initiation and may contribute to decreasing the development of new eroded areas.