While North Bay fires continue to burn, business leaders, bankers and economy watchers have started thinking about recovery and what form it may take in coming weeks and months.
Gary Hartwick, CEO of Exchange Bank, said the greatest need both before and after the disaster is for housing, and now with some 2,854 homes destroyed to date within the city limits of Santa Rosa alone, the need is even greater.
“Where are people going to live, especially our local workforce. Those of us in the banking industry along with insurance carriers and FEMA officials are still waiting for federal disaster relief guidance concerning regulatory assistance. Right now we all have to work through the cleanup process before construction can begin.”
Hartwick said Exchange Bank has a history of helping to rebuild the community dating back to the 1906 earthquake and is ready to do so again.
He said the bank has already put in place a series of steps to help its customers, including low, fixed interest loan rates, forbearance on outstanding credit, payment deferrals, and interest only draw down emergency loans up to $5,000.
“We are also assisting those without IDs, credit cards and checkbooks lost or destroyed gain access to their funds and have been cashing checks for other institutions during this crisis.
“What we need now is for the city and county to streamline and put in place an expedited permitting system to handle the flood of new construction and rebuilding applications that will soon arrive.”
Bank of America Merrill Lynch North Bay Market Senior Vice President Massey Bambara said, “We are glad that mobile banking and other applications are making it easier for customers to have a link to their accounts and make payments. We also understand that installments may be missed. We are aware of what can happen when assets are lost and personal funds are tight. We’re all in this together and have to help each other get through it.”
Economist Robert Eyler, Ph.D., president of Forensic Analytics and dean of the Sonoma State University School of Education and International Studies, sees the future as involving three major issues: reconstruction, where and what groups of people will rebuild, and the timeline for accomplishing this enormous undertaking.
“Many who have lived in the area for a number of years may profit from rising equity and valuation of their homes and will benefit from insurance payouts. However, some may decide to leave the region to start over. The magnitude of this go, or don’t leave the area, approach will be strongly felt here locally.”
He said another aspect is how many workers will be impacted by this disaster, and for how long. Where is the lodging for displaced workers or will demand be so great labor will have to be imported from other areas, along with additional construction firms to help cope with this widespread crisis. Even with the high cost of workers compensation, he does not see this as a deal breaker for builders and developers. But high demand and lower supply may put upward pressure on housing costs during the recovery.
“Those who previously shopped at K-Mart will probably not go to retail outlets in other counties but rather stay local. But there could be a negative impact this year on holiday spending.
Cost of fire damage
Unincorporated Sonoma County: 3,819 parcels with assumed 100 percent structure loss, $2.02 billion in estimated losses
Santa Rosa: 3,470 structures, including 2,907 homes and 86 commercial units, $1.18 billion in estimated damage
Source: Santa Rosa Press Democrat. Note: Preliminary estimates as of Oct. 15.