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Demographic information vital for business recovery

Trying to get a clear picture on the post-Katrina population on the Mississippi Gulf Coast is a difficult proposition.

After the storm, there were only about 2,000 residents left in Waveland, which was home to 7,100 people before the storm. But the City of Gautier, which was much less impacted by the storm, has held its own. Gautier lost some people after the storm, but now has gained enough new residents that city manager Christy Wheeler projects that the population today is the same as it was before the storm, 20,000.

Ocean Springs Mayor Connie Moran said after the storm there was an approximate net loss of 13% of their students within the Ocean Springs School District, which includes areas outside the city limits such as Gulf Park Estates. “This is a good approximation of how our population has been affected,” Moran said. “School officials expect we will be back to our original number of students within two years.

“Our downtown, however, is booming. People from all over the Coast are flocking to Ocean Springs to enjoy our restaurants and shopping, since we were fortunate enough not to have sustained a storm surge there. We also are seeing additional business from contractors as well as volunteers who are here to help our residents recover.”

Before the storm, Gulfport had approximately 73,000 residents. How many are left is hard to say.

“We do not have an accurate grasp on what the post-storm population is due the influx of construction workers and volunteers,” said Kelly Jakubik, spokeswoman for the City of Gulfport.

Pearl River County towns of Picayune and Poplarville had large surges of population after the storm. Other areas just north of the worst devastation like Stone and George counties are also seeing major population growth.

Figures from the Mississippi Emergency Management Agency (MEMA) suggest that more and more people are returning to make repairs on their homes and find available rental property.

“With over 38,000 travel trailers and mobile homes in our state, over 80% are on someone’s personal property,” said Ashley M. Roth, public information coordinator for MEMA. “That means people are eager to be close to where their houses used to be.”

Daily changes

Getting a handle on current demographics on the Coast is challenging because the numbers change every day. But this is the kind of basic information that is critical to attract all types of new development — and decisions to re-open businesses closed by Katrina.

“Most of the prospects that are calling local economic developers are asking things as simple as what the population is right now, and it is a difficult question,” said Brian Richard, director of research, Economic Development Resource Center, University of Southern Mississippi. “This is important because of the businesses that need to know these things. Some areas of the recovery process are now being hampered by a lack of reliable data. Businesses that served coastal areas are reluctant to return because they are unsure of the local market for their goods or services. Businesses won’t come back if they are not certain what the market will be for the product. The other side of it is they need to know that employees, as well as customers, will be available.”

Richard did a study of the demographics of the Coast before the damage from Katrina, and is now working with FEMA and other sources on estimating the current population. That is a moving target. “It is something we are going to have to keep track of on a monthly basis,” Richard said. “We will start tracking things like building permits and retail sales at a city level. It is going to be a very dynamic environment over the next two to four years.”

Uncertainties about the population can have a big impact. For example, the beachfront Wal-Mart Supercenter in Long Beach was completely gutted by the storm surge. The big retailer hasn’t announced yet if it will build back at that location.

“Big retailers are not sure whether they should come back or not,” Richard said. “Again, that has to do with the availability of customers and employees. Retailers are taking a wait-and-see approach at the moment.”

What to expect

Richard said analyses of previous storms may provide indications of what to expect in Mississippi in the wake of Hurricane Katrina. “Hurricanes Hugo (South Carolina), Andrew (South Florida) and Frederic (Alabama) provide useful examples of patterns of economic activity after destructive storms,” Richard said. Important points to note from the studies of these disasters:

• Income and employment in certain sectors were increased for a period of two to four years following each storm, most notably in construction, repair services and wholesale and retail trade.

• Insurance reimbursements and government aid were far less than the overall losses experienced. For example, damages resulting from Hurricane Andrew totaled more than $22.6 billion, $15.4 billion of which was covered by insurance, leaving $7.2 billion in uninsured losses.

• An extensive survey was conducted in the wake of Hurricane Andrew to determine the extent of housing damage, along with information about demographic changes in the area.

Over half (52%) of South Dade county residents were forced to move out of their homes as a result of Andrew. Two years later, only about 62% of those displaced households had returned to their pre-hurricane residence.

Gauging the damage

On the Gulf Coast, the railroad tracks served as a barrier to the storm surge and thus, a dividing line between devastation and less severe damage. The total area of all five FEMA damage areas is about 140 square miles. The area of the two most extensive damage areas totals about 28 square miles.

A recent HUD report shows that about 37% of all occupied housing units — a total of 52,500, in the three coastal counties sustained more than $5,200 in damage. There were more than 21,000 homes in the most serious damage zones.

“Based on a house-by-house survey conducted under FEMA’s supervision, we now know that over 90% of the homes in the three serious damage zones, or approximately 18,900 homes, sustained substantial damage,” Richard said. “Structures are defined by FEMA as substantially damaged when the cost of restoring the building would equal or exceed 50% of its pre-damage market value.”

Research has also shown that Hurricane Katrina impacted a higher proportion of older residents than the population as a whole. Almost one-quarter of those over 85 lived in the most affected areas. This compares with one person out of 10 in the overall population in that was over 85. “Looking at the race statistics, the Asian population was hit proportionally harder than the population as a whole,” Richard said. “Almost one-quarter of all Asian people on the Coast lived in the damage zones. Black persons were less likely to be in the most heavily damaged areas.

“The housing data reveals that persons either on the low end or the upper end of the income spectrum were more likely to have been severely impacted by the storm. More rental housing, as opposed to owner occupied housing, was wiped out by the storm. One in five renter-occupied housing units was in the most significantly damaged areas, compared to about 13% of owner occupied units.”

Richard said lower income households were more likely to be in the seriously damaged areas. Both elderly persons and renters tend to have lower annual incomes than the overall population.

“Not surprisingly, because of the damage along the beachfront, expensive homes were hammered by the storm,” Richard said. “Over one quarter of all owner occupied homes valued over $500,000 in the three-county area were in the catastrophic damage zone. This is also reflected in the income data which shows that households with annual incomes over $150,000 were more likely to be in the catastrophic zone.”

In the zone

Richard’s report shows that two out of every five businesses on the Gulf Coast were located in one of the FEMA damage zones. Almost one-half of all jobs in the retail, financial and service industries were in the FEMA damage areas. More than 80% of the jobs in the damage zones were in those three sectors. Manufacturing was largely spared the destruction. Only about 10% of total manufacturing employment in the three Coast counties was in any of the FEMA damage zones.

“It is important to note that some homes and businesses outside the FEMA damage zones sustained major damage,” Richard said. “For example, FEMA’s damage maps didn’t quite cover the Northrop Grumman Shipyards in Pascagoula. News reports indicate that the company’s facilities may have sustained up to $500 million in uninsured damages. Ship and boat building employment fell by over 20% from August to September 2005, but has now almost recovered to pre-Katrina levels.”

Even businesses that sustained no physical damage were impacted by disruptions caused by displacement of employees who lost their homes or by suppliers or customers that were damaged.

While state figures show there has been some improvement in unemployment rates in the months since the storm, there are still significantly fewer jobs on the Coast. Unemployment rates in Hancock, Harrison and Jackson counties were all around 22% in the month after the storm. As of February 2006, those rates had lowered to about 15% with the three coastal counties having approximately 25,700 fewer employed persons.

The most damaged cities — Waveland, Pass Christian, Bay St. Louis, Biloxi and Long Beach — had lower retail sales in the fourth quarter of 2005 relative to 2004. Cities with more protected retail sectors, notably Gulfport, D’Iberville and Pascagoula, saw very large increases in retail sales.

“Also, cities in the counties directly north of the coastal counties saw large increases in retail sales,” Richard said. “Wiggins, 30 miles north of Gulfport on Highway 49, saw almost a 70% increase in retail sales over the previous year.

“These large increases north of the coastal counties reflect both commuters and displaced households. Commuters still live on the Coast, but must drive to other cities due to the destruction of the retail stores in their area. Displaced households have lost their homes on the Coast and have relocated, either permanently or temporarily, to locations farther north. Another factor is a general increase in retail sales due to people buying home repair goods and household goods lost in the storm.”

Data from the first quarter of 2006 shows that retail conditions are improving in most of the coastal cities. The notable exception to this is Pass Christian, which continues to have retail sales over 70% below last year. As the coastal cities’ retail sectors improve, the growth in Wiggins retail sales has subsided somewhat. “Interestingly, Picayune continues to see extremely high growth,” Richard said. “This is possibly due to higher levels of displaced households in Picayune relative to Wiggins.”

Contact MBJ contributing writer Becky Gillette at bgillette@bellsouth.net.

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