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Fire Losses Top $2 Billion

Damage could top $2 billion in San Diego County as a result of the wildfires that ravaged the county late last month.

More than half the losses involve homes and other structures.

Meanwhile, officials said they are concerned about dishonest individuals and businesses attempting to take advantage of fire victims during rebuilding.

The San Diego city attorney’s office said it has been investigating reports of illegal increases in rents in the aftermath of the recent fires.

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“Complaints of rent gouging are especially troubling as those who lost their homes have to scramble to put roofs over their head,” said City Attorney Michael Aguirre. “Re-victimizing fire victims is an especially contemptible crime and we will use the resources of the city attorney’s office to protect San Diegans.”

Under state law, landlords can only increase rents 10 percent or less above rents charged before the emergency, according to the San Diego County Apartment Association.

Rent manipulation during an emergency is a misdemeanor and could bring a jail term of one year and/or a $10,000 fine, said Aguirre.

He is urging residents who encounter attempted rent gouging to contact his office.

In addition, under state law, contractors hired to provide emergency cleanup, repair or reconstruction services cannot charge more than 10 percent of what they would have charged 180 days before the emergency declaration.

Martin Investigative Services of Newport Beach is offering free background checks on building contractors. The inspections usually cost $100 to $300.

“We are doing this to save people a lot of time and money,” said Thomas Martin, president of Martin Investigative Services, last week. “If we can spare one person additional grief from an unscrupulous contractor, it will be worth all the money and time to assist our California neighbors.”

San Diego District Attorney Bonnie Dumanis and San Diego Sheriff Bill Kolender teamed with state Insurance Commissioner Steve Poizner to create a special task force to fight fraud.

“In the wake of this horrible disaster, protecting homeowners is of utmost importance,” said Poizner. “It is despicable that some people use tragedy for personal gain.”

The task force includes representatives from various state and federal agencies plus the district attorney’s office, Sheriff’s Department and San Diego Police Department.

There is no doubt that money will be made during the rebuild. The 2003 Cedar Fire reportedly cost $1.5 billion, according to the San Diego Institute for Policy Research, a private, nonprofit research agency.

The institute issued a breakdown of the $2 billion figure on Oct. 30 based on damage caused between Oct. 21 and 29 and using figures from the 2003 fires.

The total cost for the nine-day battle reached an astounding $2.1 billion, said the institute.

Housing accounted for some of the largest losses. With the number of homes reported destroyed so far, the projected costs to rebuild or repair homes would exceed $500 million, said Kelly Cunningham, economist and senior fellow at the institute. His estimate is based on 1,382 homes destroyed multiplied by an average home size of 2,500 square feet times the cost of construction at $138 per square foot. Other estimates have 1,682 homes destroyed.

Cunningham estimated a 9 percent to 10 percent increase in material costs since the fires in 2003. He also said the construction industry benefited from a 2 percent to 5 percent increase in employment after the Cedar Fire.

“This comes at a good time,” he said. “Rebuilding will create needed jobs in the construction industry,” he said.

The cost of other structural damage, including commercial buildings, community infrastructure and agriculture loss, is estimated to be at least double the cost of the Cedar Fire due to inflation and the much larger geographic area affected by the wildfires.

The cost of lost furnishings and household goods is estimated on the above trend spending reported for San Diego taxable retail sales in the first and second quarters of 2004 following the Cedar Fire. The cost of lost furnishings and durable household goods was then adjusted for the number of lost homes and inflation.

Estimates on overtime pay for police and fire personnel were also based on 2003 fire estimates. Key sources included the state Department of Finance’s report on costs to governments of the 2003 fires, according to the institute.

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