The numbers are sobering. The Mississippi Gulf Coast lost an estimated 70,000 housing units in Katrina, and another 65,000 were damaged. At the one-year anniversary of Katrina, there had been building permits issued for only 1,463 new single-family homes and 28 new multi-family structures since November 2005.
According to the Mississippi Recovery Fact Sheet issued by the governor’s office (see www.governorbarbour.com/recovery), the average permit value of the new homes was $143,415. There were also 1,194 permits issued for single-family repair, with an average permit value of $98,000. There were 28 permits for new multi-family units with an average value of $304,286 and 27 multi-family repair permits with an average value of $788,448.
Those figures underscore what many in the construction industry have been saying, that rebuilding has yet to really take off on the Gulf Coast.
“Housing is still obviously the most critical need,” said Ron Peresich, chair of the legislative and government affairs committee for the Gulf Coast Business Council and a partner at the law firm Page, Mannino, Peresich and McDermott, Biloxi and Jackson. “There are an estimated 5,000 to 10,000 people still living in tents and another 30,000 to 40,000 in trailers. A total of 100,000 people are still displaced in one way or another. Those are broad numbers.”
According to FEMA, 7,500 FEMA trailers have been deactivated because homeowners have completed repairs and moved back into their homes.
Infrastructure repairs are proceeding that will pave the way for new construction. It is estimated that 97.3% of the debris removal in the three coastal counties has been completed. About $692 million has been spent on debris removal, and to repair roads and bridges, public utilities and public buildings.
The National Flood Insurance Program (NFIP) has paid an estimated $2.4 billion to policyholders in the state, and FEMA has provided $1.2 billion in individual assistance.
SBA housing assistance totals $1.8 billion. And funds are expected to start flowing soon from the $3 billion in Community Development Block Grants to homeowners.
Peresich is concerned people aren’t going to be able to rebuild if they can’t get affordable insurance coverage. The same thing is true for businesses.
“If you have a homeowner who also owns a business, he gets whacked twice by these increased rates,” Peresich said. “The goal is to try to find an infusion of capital into the Wind Pool. In the Mississippi House, Rep. Diane Peranich is working on a bill to take some of the growth in casino revenues and some of the growth in sales taxes on the Coast and divert that into the Wind Pool so it can buy more reinsurance. That, we believe, will have the impact of lowering the rates. The Mississippi Senate is looking at the same thing.”
Peresich said a lot of private carriers aren’t writing wind coverage at all, so the Wind Pool is the only option for thousands of people. The Wind Pool rate increase approved by George Dale is 90% on homes and 268% on businesses.
“Those are just too high,” Peresich said. “It is absolutely the major issue right now. You must have loans to rebuild, and banks require coverage. If rates are so high you can’t afford coverage, the recovery effort will be stifled. That is why it is so important that we get these rates down.”
He adds that everyone rebuilding also is facing increased construction costs, and a lot of local governments are looking at tax increases next year.
“So it is really piling up on people,” Peresich said.
Gavin Smith, director, Governor’s Office of Recovery and Renewal, said there are literally billions of dollars available now for rebuilding including the payments from the NFIP, FEMA and the SBA.
“The big challenge is to get CDBG (Community Development Block Grant) grants out and that should be happening soon in large numbers,” Smith said. “The other thing that is exciting is we are just about done with cleanup of debris.
Once cleanup is done and cash flows into the hands of disaster victims, we believe there will be an increase in development.”
Recently about 15,000 people attended a three-day governor’s expo at the Coast Coliseum that included booth displays inside the coliseum and 25 model homes set up in the parking lot in an area that was dubbed “Recoveryville.” Types of model homes included RVs, modular homes, stick-built homes and panelized homes.
“People were excited to look at several different types, models, and price points,” Smith said. “The news we got back from the public was very positive. Part of the purpose of the expo was to give people hope, and give them a series of options they might want to choose from. There was a lot of good information on tools, products and services for recovery.”
Smith said one of the things they were most impressed with is that home builders have met the challenge of providing improved durability for hurricanes and designs that reflect the architectural history of the Coast.
Progress has also been made in designs for elevated houses that are more attractive than the traditional beach homes on pilings. FEMA is putting out a new publication named “#550” that blends architectural and engineering recommendations for elevating buildings in ways that are compatible with the housing designs common on the Coast before Katrina.
Smith said another big challenge being faced is the shortage of skilled workers on the Coast — and places for them to live. Besides insurance, worker availability and housing to accommodate workers continue to be a major rebuilding concern.
While there has been good progress is repairing existing homes in Biloxi, there are many barriers to rebuilding the city’s housing stock.
“We’ve issued more than 13,000 storm-repair permits since September 1, but only about 150 permits for total rebuilds of homes,” said Biloxi Mayor A.J. Holloway. “Considering that Katrina claimed 6,000 homes and businesses in Biloxi, that illustrates how far we have to go on replacing the housing stock. Typically, the city issues about 3,500 permits a year, and has averaged about 145 permits for new homes each year.”
Holloway said replacing the homes lost to Katrina would take years judging from the past, but the storm presents a host of other issues, particularly in hard hit areas such as Eagle Point in north Biloxi and especially on Point Cadet in East Biloxi, where blocks and blocks of generations-old homes were reduced to debris fields.
“Many of the homes were built before regulations existed to guide construction in flood zones,” Holloway said. “In fact, many may have not been able to meet the city’s existing regulations, much less any post-Katrina regulations. Additionally, the small lot sizes in East Biloxi may not be large enough for homes to meet front or side setback requirements. And there’s the issue of money. Homeowners who might have sold their land for $15 or so a square foot before the storm are looking for as much as $100 to $125 a square foot today.”
Many of the property owners in East Biloxi are dealing with a number of issues before they can begin rebuilding — if they decide to rebuild. Holloway suspects many have yet to settle with their insurance companies, or are waiting on either a grant through the state’s Homeowners Grant Program, or they’re worried about the flood elevations. They also might be considering offers to sell and build elsewhere in the city.
“A developer seeking to build affordable housing in East Biloxi faces a difficult task,” Holloway said. “Buying land to build homes would be expensive, he’d face higher construction costs in this post-storm environment, and then he’d look to sell homes in an area where about 45% of the homeowners had an annual household income of $24,000 or less before the storm. These factors all make it hard for the numbers to work.
“The best thing that we can do for our residents is to make them aware of their options. We need to make sure they are aware of the elevations to rebuild to, and what financing options and pool of volunteer labor is available. People will be able to make sound decisions if we make sure to give them a clear picture of their options. By doing that — and by building on the things that gave us the great quality of life and opportunity we had in the past — we’ll build back better and in a responsible manner.”
In Gulfport approximately 3,500 homes were completely destroyed while another 5,000 were severely damaged.
“As more and more people settle with insurance companies and begin receiving their housing grants, we are seeing the demand for permits increase as people begin to repair and rebuild,” said Kelly L. Jakubik, spokeswoman for the City of Gulfport. “Gulfport has issued approximately 27,000 permits since the storm. While it will likely take years to completely rebuild the housing stock in Gulfport, we are pleased to see that most of the houses that needed repair have been repaired, and we are also encouraged by the number of new subdivisions and housing developments in the works.”
Contact MBJ contributing writer Becky Gillette at firstname.lastname@example.org.