OUT OF THE ASHES CONSTRUCTION SECTOR LIKELY TO GET BOOST DURING THE REBUILDING FROM REGION'S DEVASTATING WILDFIRES.

Byline: Barbara Correa Staff Writer

Economists aren't ready to call it a silver lining. But there is something positive emerging from the Southern California firestorms of 2003: The rebuilding effort will give a bump to the region's already strong construction sector.

On the downside, it could also mean more expensive replacement costs as clusters of residents strain the industry in the rush to get their homes rebuilt.

With hundreds of homes burned to the ground in San Bernardino County, and many more suffering smoke damage, contractors will have their work cut out for them. And then some.

``The only problem we may run into in the construction industry is it's wound up so tight right now, the trouble will be finding enough workers to do it,'' said John Husing, an Inland Empire economist based in Redlands. ``You're going to have an enormous amount of federally funded infrastructure plus new homes paid for with federal loans and insurance money.''

He said the natural analogy is to the Northridge Earthquake, the 6.7-magnitude quake that rocked the region and damaged 65,000 houses, apartments and condominiums in January 1994. While the scale of the structural damage from the quake was much greater, the construction boom that followed it is a good predictor for what might happen in San Bernardino County and, to a far lesser extent, Simi Valley, Moorpark and the affected Ventura County communities.

``The restoration leads to a surge in economic activity,'' Husing said. In the Inland Empire, construction was one of the few sectors that remained extremely resilient through the recession. ``The industry never slowed down, so you'll see shortages of labor and materials.''

New housing construction in California for the year ended in July exceeded 192,000 units, the strongest rate since 1990, according to the most recent Anderson Forecast released by the University of California, Los Angeles. San Bernardino and Riverside counties lead that new construction, while downtown Los Angeles and Long Beach are also hotbeds of residential construction, said Jack Kyser, chief economist at the Los Angeles Economic Development Corp.

Adding to the already high demand for home construction, demand from homeowners who lost their property in the fires will mean even longer waiting lists for Inland Empire contractors already swamped with residential construction work.

``Instead of three to four weeks it may be six to 10 weeks,'' said Tod Merriman, president of Merriman's Inc., a general contractor in Calimesa. He said calls from fire victims started pouring in Oct. 27, and he expects his workload to double over the next several months. The company handles everything from simple smoke-cleaning jobs, which start at $3,000, to debris removal and full bottom-up home construction.

He said he plans to hire people for cleaning crews and other lower- skilled jobs. But he'd rather extend his backlog than hire a bunch of new workers for the more skilled positions who don't have a solid track record. ``We've been here too long to damage our reputation,'' he said.

Tony Forcier, owner of ABF Construction in Highland, said he's been getting lots of calls since the fires started from construction workers looking for jobs.

``We're accepting applications, but we're weeding them out. When you have a situation like this, everyone is coming out of the woodwork.''

Even more than reliable workers, he said, he's trying to line up reliable subcontractors that can take on work ABF doesn't do itself, such as plumbing and wood framing.

As for a spike in the cost of building materials, Tod Merriman said he expects prices to rise five to 10 percent, but said any price gouging won't be tolerated by the industry. In a high-profile disaster like the fires, suppliers won't risk being seen as trying to cash in on homeowners' misfortune.

Still, insurers said price spikes have occurred during other construction boomlets.

``In the East Bay (Alameda County) fire you had 3,000 homeowners vying for the same raw materials and architects and the prices on replacement were higher,'' said John Kozero, a spokesman for Fireman's Fund, a property and casualty company that insures about 3 percent of California's homeowners.

Most of the homes burned in the Oakland Hills Fire, however, were upscale and exclusive, whereas the homes destroyed in Southern California are a mix, said Pete Moraga, a spokesman for the Insurance Information Network, an insurance industry trade group.

As vast as the fire disaster has been, its impact on the economies of the communities it burned through could turn out to be negligible.

``Adding 400 to 500 homes to a region that does 35,000 (new homes this year) won't be that impactful,'' said Jay Moss, greater Los Angeles regional manager for KB Homes.

Take steps to keep from getting taken

Every disaster produces its share of double victims: people who end up getting burned twice because of shoddy construction work by a disreputable contractor.

``There are scam artists everywhere,'' said Pete Moraga, a spokesman for the Insurance Information Network. ``Every disaster you see these people coming out of the woodwork.''

He said the best way for homeowners to avoid getting stuck with a bad contractor is to use vendors approved by their insurance company; if dealing with an independent adjuster, do your homework on the construction company that is recommended.

``Everybody from the insurance company to the homeowners should make sure everyone they're working with is bonded and licensed,'' said John Hakel, executive director of the Monterey Park chapter of the Associated General Contractors of America.

``Make sure they're bondable, because say the homeowner gets an unscrupulous worker who falls off a ladder and sues the homeowner for damages?''

Consumers can check a contractor's license at the Contractors State License Board at www.cslb.ca.gov/consumers/default. Contractors have to be bonded to get licensed, said Hakel.

The site also has a primer called What You Should Know Before You Hire a Contractor, at www.cslb.ca.gov/consumers/beforehiring.asp.

- Barbara Correa

CAPTION(S):

photo, box, 2 charts

Photo:

(color) Linnea Crawford, left, and Suzanne Bishop help sift through the debris of a family member's San Bernardino County home, which was destroyed in the Old Fire.

Brett K. Snow/Staff Photographer

Box:

Take steps to keep from getting taken (see text)

Chart:

(1 -- 2) BUILDING BOOM

SOURCE: Los Angeles Economic Development Corp.

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