Fire chief: Bad economy brings more fires

SCHENECTADY — When the stock market takes a nose dive, most people worry about their retirement savings. Fire Chief Robert Farstad thinks about dead firefighters.

When the economy heads downhill, he said, some homeowners deliberately torch their houses for the insurance payout. The last time that happened in Schenectady, in 1996, a firefighter died. And now that foreclosure-related fires are occurring on the West Coast, he’s preparing for a lot more arsons here.

“It historically happens when you go through these times. It’s already happening in other communities and I expect to see it here,” Farstad said. “Obviously, people get behind in their mortgages. They’re going to try to make money on fraud — their insurance policy. We’re going to see that.”

Insurance brokers aren’t as certain. Judi DeMarco, manager of Capitol Homes in Schenectady, said locals aren’t going to take such desperate steps no matter how much they need money.

“Even though things are tight, my customers would have to get all their personal things like photos out. People don’t want to lose that,” she said.

But in other parts of the country, some have been willing to give up everything they owned in order to avoid foreclosure, eviction and staggering debt. California has seen an increase in foreclosure-related house fires. Although national insurers said they have not seen that trend spread throughout the country, they said they have seen a disturbing increase in owners burning their cars to avoid repossession this year.

In Schenectady, Farstad does not believe any of the recent fires — which have included at least two arsons — are deliberate attempts to collect insurance payouts.

“Not yet,” he said grimly.

But his arson investigators are already aware of the possibility. Farstad warned that they will be looking more closely for fraud.

“Any fires we get we’re going to look at,” he said. “Getting into hard times, what do people do? Do you let the house foreclose or collect on the insurance?”

Locally, foreclosure activity more than tripled this summer while bankruptcy filings jumped 25 percent.

In the five counties around Albany, one out of every 356 households is now in foreclosure. Just six months ago, that ratio was one out of every 622 households.

The national foreclosure rate is much higher — one out of every 194 homes — according to RealtyTrac.com. Local officials believe the worst is yet to come.

And it will likely hit Schenectady hard. The Capital Region’s highest number of subprime mortgages is in the 12303 ZIP code, which includes the struggling Mont Pleasant neighborhood in Schenectady as well as parts of Rotterdam, Guilderland and Colonie. In that area, there are 310 owner-occupied homes with subprime mortgages, according to the Federal Reserve Bank of New York in Buffalo. Many of the owners are already in default or months behind in their payments.

Farstad is certain some of them will try to burn their way out of their mortgage.

“I don’t think ‘might,’ I think we will see this,” he said.

At the same time, he expects more fires caused by risky heating choices because residents won’t have the money to pay for heat.

“I know how much I’m paying for electricity and heat. Thank God I’ve got the job I do. Other people aren’t so lucky. They’re going to struggle,” Farstad said.

The cost of residential heating oil is projected to increase by 25 percent between October and March, and natural gas is expected to jump 17 percent, according to the U.S. Energy Information Administration.

That means residents who heat with oil will have to spend an average of $585 more than they did last winter while those using natural gas will pay $162 more.

Owners and renters can apply for help through the Home Energy Assistance Program (HEAP), but the program typically pays for just a fraction of the winter’s bills.

And some are too proud to ask for help — or apply too late in the season, when the state runs out of money for the program. That may happen earlier this year because the federal government cut the state’s HEAP money by 28 percent.

The cut, combined with record job losses in the Capital Region and the overall economic downturn, are a recipe for fire, Farstad said.

“If they can’t fill their oil tank, what do they do? Do they use their stove? Very dangerous,” he said.

The department regularly handles winter fires caused by heating — space heaters that overload the circuits or set fire to items nearby; ovens left open to radiate heat onto the flammable walls nearby; and even a few fires set by residents trying to use a wood stove.

“We’ve really got to get the message out,” Farstad said. “In poor economic times, this happens. Could this be a time when this increases? I think it would be.”