January 25, 2008
http://www.gulfcoastnews.com/Katrina/GCN_Local_News_Update.htm
I have reproduced key sections of the report below. Ken and I were discussing today why persons are still in the FEMA trailers and Ken’s thoughts that most of them were low income. I believe we finally have a ‘partial’ answer. From the Report:
‘There are currently around 16,000 families still housed in temporary trailers with only around 1,460 living in the trailer parks. The majority of trailers are located on private property in front of slabs that were once the owner’s homes.’ We don’t know what the income level of those home owners that are living in the FEMA trailers on their own lots. However, they were home owners and probably will have some assistance to rebuild or relocate. Not in the article, but in Mike and Bob’s discussions with Casinos, the Casinos said that they have over 1,000 employees still in FEMA trailers.
HUD is taking over the housing situation from FEMA on Nov. 1 (probably a good move).
Last paragraph in the article should give you some concern as to the ‘depth’ of the Biloxi/Gulfport market. Pargraph follows:
‘Coast area realtors are saying that housing sales and rebuilding on the Coast are sharply down. The main reason is the high cost of getting insurance. The insurance issue is so devastating that homes with contracts are often withdrawn after the potential new homeowner finds out what their insurance costs will be. This is also affecting housing costs as prices that were higher in the months after the hurricane are now falling. Even then, the insurance cost issue is keeping sales slow. This high cost of insurance is also why so few affordable homes have been built. The cost of insurance is out of proportion to any such home and makes ownership nearly impossible for moderate income workers. Low income families have virtually no option. One realtor said recently, ‘The insurance problem is killing us.’‘
In discussions with Rick Thomas, a ReMax realtor today, he said insurance on a $150,000 home can run from $3k to $4k. Insurance of a home directly on the Coast can run $20,000. The $3k-$4k quote is probably along I-10 and not right on the beach area, along Hwy 90. While the State has set up a ‘insurance pool’, it is more expensive than private rates. Rick Thomas said that Wells Fargo is providing mortgage loans combined with insurance at a cost that is 1/2 of market. Reduction in insurance rates will be resolved through the private market, not government pools. The cost of this insurance is possibly 3X that of a normal market. The higher cost of insurance, possibly $150-$200 a month, is pricing a lot of families out of the market. However, I don’t totally understand the comment in the previous paragraph that the cost of insurance is ‘out of proportion’
Also quoting the article, ‘A review by Gulf Coast News of a recent Gulf Coast apartment guide found that most apartments on the Coast are now renting for between $800 and $1,200 a month, which is too expensive for many people, including workers in the service-industry who earn just over minimum wage. The housing problem is most acute for residents in Hancock County.
The implication of all of this is we probably have a fairly narrow pricing window to reach a lot of the market. For every $10,000 increase in the price of a home, we may lose 7-8% of the market with the market concentrated in the sub $150,000 range. Someone is going to have to figure out how to deliver lower priced lots (sub $35,000) as well as very affordable home costs. Just reducing the size of the home is not all of the solution. It may be that this market needs a lot of homes in the sub $120,000 range or a significant increase in multi-family housing.
Rod
Excerpts from the Report Follows (I have bolded key sections also):
A study by the RAND Gulf States Policy Institute added figures to the obvious regarding the slow progress in restoring housing on the Coast. The study found that about 60 percent of the region’s housing, including 5,700 rental units, was damaged by the storm, the report said. Also, 60 percent of the region’s rental stock was located in the hard-hit coastal areas of Pascagoula, Gulfport and Biloxi, re-searchers concluded. Ninety-five percent of the region’s multi-family properties were located either on the Coast or adjacent to the region. Researchers said that the Aug. 29, 2005, storm compounded the pre-Katrina shortage of affordable housing and the lack of affordable multifamily housing is stalling the recovery. A big concern is the lack of housing for workers helping to rebuild the area, and for Coast residents who need affordable rental homes and apartments, which have yet to be built. The Rand study noted that it may be four to five years before such homes and apartments can be constructed.
FEMA officials report they want to close as many emergency trailer parks as possible by the end of the year, and place the families into the new rental assistance program, which will be administered by the Department of Housing and Urban Development (HUD) beginning Nov.1. Currently, there are about 16,000 families still in the FEMA temporary housing program, with about 1,460 of those families living in ‘emergency group sites’ or trailer parks. On Nov. 1, HUD will be taking over the pilot program to provide long-term housing rental assistance and case management for Hurricane Katrina households. The program will run through March 2009.
FEMA is hoping to close most Katrina housing trailer parks on the Coast by December 31, it is also turning the housing program the agency has coordinated since the hurricane over to the Department of Housing and Urban Development (HUD). There are currently around 16,000 families still housed in temporary trailers with only around 1,460 living in the trailer parks. The majority of trailers are located on private property in front of slabs that were once the owner’s homes. HUD is to take over the housing situation from FEMA on November 1. FEMA officials say they do not expect any difficulty with the responsibility transfer, which may be optimistic considering the two agency’s operational history. Moving people from the trailers is acknowledged to be difficult as more substantial rental housing is in short supply even with federal assistance money to pay for higher average rental costs. Some families will likely have to relocate away from the Coast.
A new program to spur development of workforce rental housing along the Mississippi Coast has been approved by the U.S. Department of Housing and Urban Development. Details of the $260 million Small Rental Assistance Program are posted online on the Mississippi Development Authority’s web site – www.mississippi.org/smallrental/ – along with a guidebook and application form. The program, part of Mississippi’s comprehensive hurricane Katrina recovery plan, provides forgivable loans to owners of small rental properties to create more affordable rental housing for lower income families. (More Here)
Biloxi official says days of ground elevation cottage-style homes in Katrina-destroyed east Biloxi ‘are over.’ Community Development Director Jerry Creel, appearing on WLOX TV, August 19, said that post-Katrina building regulations make such homes impossible to rebuild. Small, wood-frame homes were part of the east Biloxi landscape for decades, many which had seen flooding in past hurricanes. But now, the new build-height regulations, velocity zones and other regulations will primarily force commercial development in the area. Much of east Biloxi, also called Point Cadet, remains mostly empty. The area was densely filled with the small homes, many that had been in families for generations prior to Katrina. Only a few remain nearly two years after Katrina. The area’s closest to the shoreline are being acquired for casino lands, but the interior property has little hope of casinos. (More Here) Photo above right: Destroyed Point Cadet neighborhood-Sept. 2005. Katrina’s winds stripped the trees of leaves
In Waveland, homeowners that once lived in mobile homes prior to the hurricane are not being allowed to replace them, even if the homes elevated. Many of the mobile homes were located in an area annexed by the city just prior to the storm and were grandfathered-in. After the homes were destroyed, the ordinance prohibiting the mobile homes applied. The problem is that many of the residents in that area cannot afford a new stick-built home. One of the major issues since Katrina has been the realization of the high numbers of poor, and fixed-income elderly residents on the Coast who lived in mobile homes or small family homes that had long been paid for but no longer exist. These people are having a hard time recovering from the hurricane. Hardly any program so far outlined has addressed the problem. Many volunteers have noted this problem as well and are alarmed that programs to help the poor, lower middle class, and elderly, have failed to materialize.
There are new homes going up in many of the most damaged areas as people are getting insurance and grant money from the state, but this is not to say neighborhoods are being rebuilt. Most of the new homes are going up high on stilts to meet new elevation requirement. Beachfront homes are returning slowly, and while this is good news, the number here are also low. For every new home, there are many more lots that remain empty. The devastated areas remain with some recovery a block to two blocks in seeing the most rebuilding.
Coast area realtors are saying that housing sales and rebuilding on the Coast are sharply down. The main reason is the high cost of getting insurance. The insurance issue is so devastating that homes with contracts are often withdrawn after the potential new homeowner finds out what their insurance costs will be. This is also affecting housing costs as prices that were higher in the months after the hurricane are now falling. Even then, the insurance cost issue is keeping sales slow. This high cost of insurance is also why so few affordable homes have been built. The cost of insurance is out of proportion to any such home and makes ownership nearly impossible for moderate income workers. Low income families have virtually no option. One realtor said recently, ‘The insurance problem is killing us.’
convert this post to rtf.