Urban gullies (UGs) are a rapidly expanding but under-recognized human-induced hazard in cities across the Global South, causing widespread damage to housing and infrastructure. Despite their growing importance, their economic impacts remain largely unquantified. Here, we assess the costs associated with UG expansion in Kinshasa (D.R. Congo), the world’s most affected city and a critical case to evaluate the potential magnitude of this hazard. Using an integrated approach combining field surveys and semi-structured interviews with 802 households, real estate data, and spatial analysis, we quantify direct damages, household-level costs, and system-wide economic impacts. Households experiencing damage (n=666) reported average material losses of 4,320 USD, while most respondents (n=606) contributed to bottom-up stabilization efforts, investing on average 335 USD. These costs are clearly substantial given that most households report monthly incomes below 500 USD. In addition, UGs significantly reduce property values, with total losses in Kinshasa estimated at 979 million USD. These findings reveal the massive and multi-dimensional economic burden of UGs and suggest that their impacts are likely severely underestimated in rapidly urbanizing regions. Urban gullies should therefore be recognized as a major and growing component of urban risk, requiring urgent integration into disaster risk reduction and urban planning strategies.