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Banner Image above: San Diego’s Avocado crops were ruined in the fires
Photo by Justin Sullivan/Getty Images
The Long Term Effect
There’s that dreaded half-second of silence at the top of a roller coaster. The big drop’s due — it’s just a matter of time. Remember holding your breath? Gritting your teeth? Grabbing your knees...
Teetering on the brink of recession has a similar feel. When San Diego was hit with a second bout of wildfires in just four years, it seemed it might be the little push to send us plummeting over the edge. How many people woke up to beef jerky-scented air, yelling: "Hey, let me off this thing"?
The good news is that we can stop white-knuckling the safety bar — at least for now. While there are thousands of stories of personal loss, the region at large is probably going to ride it out.
"Ironically, it could spur economic activity," says Alan Gin, an economist at the University of San Diego. "You saw employment in construction surge around March or April of 2004 after the Cedar Fire, and you also saw a big surge in retail sales."
With approximately 1,400 homes to be rebuilt, it would be hard for the construction industry to not see an opportunity in the ashes. Hit with slumping sales statewide, they’re down 5,000 jobs this year, according to Gin. "This will put a lot of those people back to work," he says, "Not everybody, but I think a lot."
A surplus of skilled workers is good news for the families affected by the fires. Recall the frustration of finding labor in the booming 2003 market after almost 3,000 structures were lost. "It was difficult to hire people to rebuild your home," Gin says, "but now we’ve got a bunch of people unemployed...it will be easier to find people to do the work."
While this may put a damper on sales activity until rebuilding is finished, Gin says to consider the success story of Scripps Ranch, post Cedar Fire. "Those homes are worth more than they were before. The people who rebuilt, rebuilt bigger and better."
For the broader real estate market, however, expect very little change, says analyst Gary London, president of London Realty Group Advisors in San Diego. "The impact on the region economically will probably be relatively small...we’re not talking about 10,000 homes being built, we’re talking about just a few."
Ok, call it cold comfort, but the housing market has dipped so low — home sales down 24 percent in the past year — that even a wildfire is lost in the noise.
"This won’t make a dent," says London, "We’ve got 20,000 homes on the market that aren’t selling right now — and this is 1,500 — how much of an impact could it have?"
Though the real estate market escaped mostly unscathed, agriculture got a big black eye when an estimated 20,000 acres of avocados — almost half of San Diego’s crops — were lost in less than a week. That’s a loss of about $24 million according to the county’s agricultural department. California has something close to a monopoly on the $276 billion industry, so expect shortages of green-gold nationwide. Farmers affected by the fire can take advantage of the $7 million in loans guaranteed by the state, but it will be years before a new crop can be brought to harvest. As if $5 a gallon gasoline wasn’t bad enough, Gin predicts, "The price of guacamole’s going to go up." Super Bowl is cancelled.
With a future of drought on the horizon, wildfires may become a seasonal event in San Diego, as predictable as June Gloom. For innovative entrepreneurs, the impact could be positive.
Early into the week of the October fires, Assure You — a home inventory service, was already getting hammered with calls. The business, barely a year old, provides detailed written and photo documentation of everything in their client’s home.
"It gives you peace of mind," says co-owner, Marcia Jacobs. "In the case of a fire, no one is going to remember what their losses were. Your mind is just gone."
Similar startups range from specialized post-fire home cleaning crews to private fire-security teams. "People are really starting to think about it now," says Jacob. "Every time that there’s a tragedy, we just become more and more aware of what we should do the next time."
The relatively low losses from the October fires, compared to 2003, seem to bolster her claim. Yeah, we got stomped, but it could have been worse.
Blame our success on the smart use of Reverse 911, or the wide safety-margin of early evacuations. Or, perhaps look at the latest proactive building strategies, like those implemented at The Bridges — left untouched by a fire set on burning straight through. The take away message, if there is one, might be "Job well done."
Sure, we’re still teetering on the brink of recession, but at least we’ve got our safety-belts buckled. "The more we do this, the smarter we get, and the less it impacts our economy," says London. "We’ve become a community that’s prepared." — Paul Stuart
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