Wildfire’s phoenix: Jobs, construction
TEXT OF STORY
KAI RYSSDAL: Today, for the first time, we saw a goverment official put a pricetag on the wildfires here in Southern California: A billion dollars — and that’s just in property damage. It doesn’t account for the businesses that have been forced to shut down for jobs lost.
Still, as Marketplace’s Bob Moon reports, the odd result in the long run may be an economic shot-in-the-arm.
Bob Moon: It seems the insurance industry’s early estimate of $500 million in property damage throughout Southern California wasn’t even close. San Diego County’s emergency services director Ron Lane told reporters that doesn’t begin to approach the losses in his area alone:
Ron Lane: Based on initial estimates, just the homes damaged will be over a billion dollars.
It’s disastrous news. But out of the fire comes the phoenix:
ALAN GIN: It’s tragic for people who have lost their homes. But in the long run, it’ll probably be a net positive.
University of San Diego economist Alan Gin… He says it’s true business disruptions are costing tens of millions in lost revenue every day. But he says insurance money and other disaster aid should more than make up for the financial losses being suffered now:
Gin: Construction employment had dropped considerably in San Diego County — we were down 5,000 construction jobs compared to the same period in 2006. So not all those people will be brought back to work. But as the rebuilding occurs, a lot of people in construction will go back to work.
Real-estate executives are also hopeful that rebuilding activity will benefit the slumping housing market. L.A.-area economist Jack Kyser says it might even bring a spike in rental rates, or at least fill some homes that have gone vacant recently:
Jack Kyser: Where you had a lot of speculators that bought condos in the high-rises in and around downtown San Diego, they’ll probably be happy just to have some revenue coming in.
It could take years for other parts of the local economies to recover, though. The 20,000 avocado trees that burned in the San Diego area, for example, will take some time to replace.
In Los Angeles, I’m Bob Moon for Marketplace.
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