Arson is nothing new in Detroit. It's a time-honored weapon of the angry, vengeful, distressed and dispossessed in a city that gets hurt harder and sooner than others, making it a perfect place to spot early evidence of stress from the real-estate meltdown.
In Detroit, once the real estate bubble burst:
- House prices dropped: The region's median house price dropped 17.3% in the past four years, to $145,173. (See home prices by city.)
- Foreclosures increased: RealtyTrac reports a 65% growth in foreclosures in 2007, falling back from that 34% this year.
- Arsons increased: Detroit saw 151 arson arrest warrants in 2007 and 152 so far this year, according to city statistics.
The Detroit Fire Department can't draw a definitive link among the three but Capt. Steve Varnas of the department's arson section sees a connection: In 2005, before the housing market crashed, the city issued just 80 arrest warrants for arson -- about half the current number. Back then, he says, "things were going great," Varnas says. "There were fewer desperate people in 2004 and 2005."
Today, a year after the increase in fires began, Detroit investigators can't keep up with the arsons. There'd be even more arrests if only the arson squad had the staff, Varnas says.
Across the U.S., homeowners are searching for ways to escape from mortgages they can't pay -- or don't want to. A few are turning to arson, but it's tough to turn anecdotes into meaningful statistics. No one counts how many homeowners have torched their own homes to escape debt and evaporating home equity. Experts disagree whether such cases are rising. Consumer pressure and state laws require speedy settlements, which means insurance companies are quick to pay up and slower to complete complex arson investigations.
But signs of trouble are there if you're looking for them:
- In California, a state hit particularly hard by foreclosures, insurance companies must tell the state within 60 days if they suspect a fire is "questionable." Last year, more than 120 reports were filed, and in 14 foreclosure was named a possible factor. The previous year, just 70 reports were filed, with seven citing foreclosure, says the state insurance commissioner's office. (Not all reports become arson cases.)
- Arrest warrants for arson in Detroit rose 89% between 2005 and 2007. "We are up to our eyeballs in arsons," says Varnas, of the Detroit Fire Department. "We're not only dealing with hardened criminals. We're dealing with desperate people."
A trend -- or arson as usual?In Stockton, Calif., where foreclosures are rampant, Deputy District Attorney J.C. Weydert is wondered whether he was looking at an arson trend or just a coincidence.
Weydert, a prosecutor with San Joaquin County's Economic Crimes/Insurance Fraud Unit, usually handles a residential arson case every two or three years. "Now I've got two in the pipeline," he said earlier this year.
Industry analysts are divided.
"When the economics are dismal, people are doing things that perhaps they thought they would never do," says Joe Toscano, a Connecticut arson expert who, with 11 other investigators, spoke about the issue from a meeting of the International Association of Arson Investigators.
The association's members, from seven cities around the country, say arson fraud will rise; they've seen it happen before. Arson always grows when the economy plunges, says Toscano, who has 35 years' experience.
But John Hall, in charge of fire analysis and research at the 112-year-old independent National Fire Protection Association, sees no link between economic stress and arson.
"We have been collecting statistics for over 25 years, and there has never been a development in the economy that has shown a clear impact on arson," Hall says.
Tales from the trenchesSome recent cases:
- In Woodland Park, Colo., a homeowner was accused of burning his home just before he was evicted in a foreclosure action.
- In Houston, a man was charged with faking a racial hate crime to cover arson at his home.
- In Russellville, Ind., a woman was accused of trying to cash in on an insurance policy by offering her neighbor $5,000 to help torch her home and cover up the crime.
Those working in the field hear their own stories. "I have heard of builders torching incomplete homes that can't be sold," says Vince Brannigan, who teaches in the University of Maryland's department of fire-protection engineering.
Lawyer David Brisco of Cozen O'Connor investigates arson claims for insurance company clients in California, New Mexico, Arizona, Utah and Nevada. He says he's working on more arsons that are motivated by financial stress. "These are not necessarily lower-middle-class people. This is all over the place. . . . We're talking some extremely wealthy individuals, based on the size of the home and the contents of the home, people who were living some lavish lifestyles who no longer can afford that."