Steve Garmhausen
California's wildfires have destroyed 2,600 homes, a number that is sure to rise. And the toll promises to aggravate the state's housing problems, an expert says.
"These events exacerbate an already existing housing shortage, and will cause further tightness in rental and owner markets," predicts Stuart Gabriel, director of the Lusk Center for Real Estate, at the University of Southern Californiacolor>, in Los Angeles.
Emergency state and federal rebuilding funds are expected. But the building industry in California is stretched thin. Because of the refinancing boom, homeowners are spending their savings on renovations and alterations, and that has created a backlog of work for builders, says Gabriel.
California's dearth of housing has already caused a severe run-up in prices in recent years. It's difficult to build along the Pacific coast because there is little developable land left. And many municipalities actively restrain growth.
So developers have created communities inland, some of them in the paths of the multiple fires that have been whipped along by high winds. Gabriel expects that the residential areas hit by the fire will rebound in time.
"In a few (hard-hit) communities, it's going to be highly problematic in terms of an economic multiplier effect for the viability of those communities in the short run," he says. But residents are so attached to the natural beauty of places like rural San Diego and Ventura counties-some of the towns are resorts-that they will just stay put and deal with fires, earthquakes or whatever comes along. "These are just risks that people take," says Gabriel.
Megan Conely, a spokeswoman for Corky McMillin Cos., a big real estate company based in National City, south of San Diego, said that the company is assessing the damage the fire has inflicted on its homes. Many of those homes are owned by employees of the company.
"There have been a few (employees) who have lost their homes, and we've got some with significant damage to their property," she said. Some residents from the Scripps Ranch area whose homes were destroyed have been calling the company looking for floor plans in order to rebuild, Conely said.
Fire damaged the site of a planned new 800-home neighborhood in Scripps Ranch where McMillin and a partner firm had planned to start opening models in January, and had done clearing and grading. Now the timetable is up in the air. "This is by far the most devastating fire the county has ever seen," Conely said.
Scripps Ranch, one of the most desirable communities in San Diego County, has been hit hard by fire. About 343 homes, many of them in the seven-figure range, were leveled in the 30,000-person community.
In less than a week, California's wildfires have laid waste more than 600,000 acres-nearly the size of Rhode Island-and claimed nearly 3,000 buildings in all.