Since Harvey made landfall last August, our mission has been to ensure our neighbors have what they need. In the days following the flood, we gathered supplies and gave them to people in need. In the weeks following, we kept readers informed about what caused the flooding and who was responsible.
Most importantly, from then til now, we have been working to ensure families and businesses have everything they need to rebuild their homes, offices, and lives.
Today's blog is about the aftermath of Hurricane Harvey and what regular families are up against in the rebuilding process.
Mother Nature Strikes Hard at Housing Supply
From July to October of last year, more than 10,000 homes were destroyed by floods, winds, and fires. Harvey destroyed more homes than the number of building permits estimated for Houston for all of 2017—the city's housing market was operating at a deficit for the first time in years.
According to the National Association of Realtors, the inventory of available homes was down 6.5 percent in August 2017, before Hurricane Harvey and the Napa fires destroyed thousands of homes and disrupted thousands of home sales.
Experts say the housing market is so tightly wound that any natural disaster will have repercussions across the board for housing. That means more expensive rebuilding efforts, more expensive rent, more expensive homes in general. The sudden destruction of homes in Napa, CA will be felt here in South Texas—thousands of homes will need to be completely rebuilt, adding to the demand on a thinning labor force.
The Construction Labor Shortage
"All the resources are being drained to the rebuilding effort," said Nela Richardson, chief economist at real estate company Redfin. "That is going to increase the cost of housing and renovation across the nation."
Prior to the natural disasters that rocked 2017, housing construction was already in a labor shortage. Thousands of homes being wiped from the national inventory has increased the price of labor—good for anyone in construction, but bad for anyone looking to rebuild their home post-Harvey.
"A successful guest worker program will help alleviate the current labor shortage in the residential construction sector, quicken the rebuilding efforts in Texas and support the overall economic growth of this nation," wrote National Associaton of Homebuilders Chairman Granger MacDonald in a statement last September.
The mayor of Houston recently spoke publicly about encouraging developers to rebuild in Houston. Unfortunately, nothing has been said about facilitating a guest worker program to make new housing more affordable for existing residents.
How Low Supply Is Affecting Regular Families
While the housing shortage affects everyone, it won't be felt the same by everyone. Nancy Almodovar, CEO of Nan & Co. Properties in Houston, says, "We are very busy with in the $750,000 and up market.”
While the housing supply is down nationwide (and even in Houston, one of the only markets where housing inventory had been climbing for 32 months), supply is lowest where people need it the most: at the low end of the market.
Affordable single-family homes were already endangered; with Harvey, Irma, and California wildfires destroying thousands of homes, it's unlikely that affordably-priced homes will be the first to be rebuilt. With rising renovation and construction costs, investors will be focused on building homes that fetch a higher price.
Without support, even previously well-off families will have a hard time re-entering the housing market.
All of this is why Arnold & Itkin is fighting hard against insurance companies for the sake of families throughout South Texas. New Orleans' rebuilding process was lopsided in the years following Katrina—the only way to prevent that from happening here is by ensuring families get every penny of relief they need.
If you need help filing your claim or fighting the denial of your claim, call (888) 400-2101 to speak with us as soon as you can. If you have questions, we're happy to answer them in a free consultation.