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The fire was reported at about 2:40 a.m. at a building in the Scotchollow Apartments complex at 113 Laurie Meadows Drive, a San Mateo County fire dispatcher said.
Crews contained the fire almost immediately, and it was controlled about 30 minutes later, San Mateo Fire Battalion Chief Mike Borean said.
The fire started in the downstairs balcony of a six-unit building and caught the balcony above it on fire, according to Borean.
He said the fire then spread inside the two units, causing an estimated $200,000 worth of damage. The units will need extensive rehabilitation.
Two adults and two children in the lower unit have been displaced, and two men living in the upper unit have arranged alternative housing, Borean said.
Six engines and 28 firefighters from San Mateo, San Carlos, Foster City and Redwood City responded, he said.
No injuries were reported, and the cause was not immediately known.
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