Economic Aftermath of Oakland Fire : Disaster: Strengths in the East Bay’s economy are expected to soften the financial impact of the weekend blaze.

The deadly fire that swept through the hills of Oakland and Berkeley on Sunday left a vast area looking as if it had been stopped dead in its tracks.

But as stunned survivors move to put their lives back together, economists say that the fire’s negative financial effects will be mitigated by some strengths in the East Bay economy.

The economy could emerge relatively unscathed, economists said Tuesday, because of the recent strong growth in communities east of Oakland and because the damage was confined to residential areas.

Although many expect a temporary decline in property values in affected areas, most residents have insurance and financial resources to carry them through, economists added.

Moreover, there might be a boost in certain business sectors, including retail and construction, as victims begin to replenish clothes, furniture and automobiles.

Since narrowly escaping in his tennis clothes from a red-hot blaze that consumed his townhouse in Hiller Highlands, a fancy development north of the Caldecott Tunnel in the now charred hills, Mel Wax, the Port of Oakland’s public affairs director, has been looking for a new home. He is busy buying new shirts and ties and replacing furniture.

“If I am typical,” Wax said Tuesday, “I would think that at least in the short run there will be a surge in retail in the East Bay.”

Near the devastated neighborhoods, “a restaurant or a boutique here and there” could be doomed by an immediate decline in business, said Robert K. Arnold, senior economist with the Center for Continuing Study of the California Economy, a Palo Alto research group. “But there will be very little direct impact on business activity.”

That is particularly true in the steadily growing communities east of Oakland that have helped power the Bay Area’s economy in the last decade, area economists say.

Faced with stiff taxes and high costs in San Francisco, companies have moved thousands of employees to more affordable locales along the Interstate 680 corridor between Concord and Dublin. In the 1980s, those areas accounted for 39% of all new job growth in the Bay Area, and the East Bay service sector has continued to expand at a 3.2% clip despite the recession, according to a recent Bank of America study.

“To the extent that there has been dynamic growth, it has been in east and south Alameda County instead of Oakland,” said Michael S. McGill, executive director of the Bay Area Economic Forum in San Francisco.

To be sure, the fire deals another severe blow to Oakland, which is still reeling from the 1989 Loma Prieta earthquake and the retailing recession. The hefty costs of responding to the emergency will be exacerbated by a drop in the tax base as displaced homeowners have properties reassessed.

Although some state and federal assistance will undoubtedly be forthcoming, Oaklanders well know that such funding can be problematic. Its coffers nearly empty, the Federal Emergency Management Agency is still struggling to cover damages from the earthquake.

Assembly Speaker Willie Brown said Tuesday that the State Legislature will caucus today to discuss ways to assist victims of the fire. Although he made no specific proposals, he said he wants the Legislature to “protect” affected areas that could lose revenues.

As state and local officials tour the ruins, however, they are plagued by many more unanswered questions:

* Who among the cash-strapped entities will pay the massive firefighting and cleanup costs?

* How will the ruined infrastructure be replaced?

* How soon will homeowners have the needed funds and permits to rebuild?

* Where will 2,000 displaced residents find housing?

Yet many local observers say the fire’s effects will not linger long.

“The costs to the people involved are very severe, but they have reasonable levels of income” and most have insurance, economist Arnold said. “These people won’t be destitute.”

But property values could take some time to regain buoyancy, one real estate expert cautioned. Although these hillsides are considered prime properties, many homeowners could balk at rebuilding on their charred sites.

“The ambience won’t be what it was for many years,” said Glenn Crellin, vice president for economics and research at the National Assn. of Realtors in Washington. “It’s not the same area that it was a week ago.”

Protecting Your Home From Brush Fires in High Hazard Areas Clear all hazadous, flammable vegetation for a distance of 30 feet from any structure, cut flammable vegetation to a height of 18 inches for another 70 feet. Remove limbs within 10 feet of the chimney. Cut away dead branches and limbs that overhang the roof. Screen the chimney outlet with a one-half inch wire mesh to arrest sparks. Clean leaves, needles and twigs from roof gutters and eaves. Keep roof clear of all debris. Post house numbers clearly so they may be seen from the street. If you store wood, store it away from the house. Clear flammable vegetation within 10 feet of liquified petroleum gas storage tanks. Plant a green belt of fire-resistive vegetation, such as ice plants, at 30 to 100 feet from the house. Make roads and driveways accessible to fire equipment. Have a garden hose long enough to reach completely around house and keep a shovel handy. If you have a pool, consider getting a gas-powered pump and a fire hose to use pool water in fire-fighting. Consider installing a roof sprinkler system. Remember: composition or tile roofs are best; wooden shingle roofs burn fast. Source: Los Angeles County Fire Dept. RELATED STORIES: A1