Tuesday, October 11, 2005

Pensacola 'Perversity'

"Hurricanes, it turns out, can act as a perverse force for redevelopment along the nation's barrier islands and coasts. "
In 1995, a few weeks after Hurricane Opal devastated Pensacola Beach, a widely known beach restaurateur of that time was quoted in the local newspaper as saying the storm was 'good' for the beach because it cleared out a lot of shabby buildings. His intended point was that newer and better buildings would take their place and the beach soon would prosper as never before.

Many beach residents reviled him for being insensitive to the loss of others. Some were so angry they had T-shirts printed up protesting the remark and urging a boycott of the restaurant. (The shirts sold quite briskly, among others to throngs of newcomers who wanted in on the beach boom.)

Today, the man who once owned Chan's Gulfside should be hailed as a prophet. In Tuesday's Washington Post, staffer Gilbert M. Gaul describes the cycle of cash that is flowing across Pensacola Beach in the wake of Hurricane Ivan, just as it did after Opal.
"I couldn't believe it," recalled [SRIA general manager Buck] Lee... who helps to run the island government. "People from all over America were driving around here with their windows down and their checkbooks out offering to buy houses on the spot."

In a season of monster hurricanes that have wreaked so much death and destruction, Pensacola Beach offers a lesson in why coastal resorts often come out of a storm more prosperous than ever -- helped along by federal subsidies and tax breaks that are available no matter how many times the same area gets hit.

* * *
Property values, though, continue to defy expectations. Lots that sold for $1 million before Ivan now garner $2 million. "You would think after seeing all of the damage, who would want to live here?" said Lee, steering his yellow Hummer past a handmade sign advertising a lot for $1.8 million.
Reporter Gaul estimates that 450 Pensacola Beach homes were destroyed by storms over the past year. "Tangles of iron and concrete are all that remain of some hotels." Nevertheless, property values are soaring. He explains:
Hurricanes, it turns out, can act as a perverse force for redevelopment along the nation's barrier islands and coasts. In a beach town, they often weed out older, less valuable properties, encouraging investors to build bigger and more expensive homes and hotels. That pushes up property values overall.

"There are very large incentives to develop in hazardous areas," said Raymond J. Burby, a University of North Carolina professor of land use and environmental planning. "We have federally subsidized flood control and hurricane protection works. We subsidize flood insurance. We have tax write-offs for disaster losses. All of this massive federal relief makes people whole. The federal message is 'Go ahead and develop these areas.'"
Among the "billions" of dollars encouraging development of hazardous coastal zones in Florida, Gaul cites the recent $10.9 million FEMA sand renourishment grant for Pensacola Beach -- which, as he may not know, is the third multi-million dollar federally subsidized beach renourishment project on our beach in the past five years. "By contrast," he says, "only a fraction has gone to encourage vulnerable coastal communities to get out of harm's way."

According to Gaul, "an analysis of disaster payments shows that FEMA spends about $10 subsidizing rebuilding for every $1 it spends on steps to reduce future storm damage." That probably is wildly optimistic. A large portion of FEMA's disaster mitigation funds typically sifts down to state agencies for re-award to local governments. And around here, at least, local governments know how to play the grant game.

Tourist promotion, run-of-the-mine infrastucture projects, and abnormal private business subsidies -- almost anything can be gussied up as 'disaster mitigation' to attract federal funding. If not from FEMA, then from the Corps of Engineers or half a dozen other federal funding sources. Sand renourishment, berm-rebuilding, and road widening projects are only the most visible magnets for new development. There also are federally subsidized flood insuance, tax incentives, corporation-friendly liability laws, favorable land lease terms, and almost countless other things that encourage beach development even after a devastating storm.

Fred Simmons, a well-known beach businessman with interests that range from real estate rentals to night clubs and liquor stores, knows this well. As he told reporter Gaul, "After every hurricane there has been a brief lull and then it comes back with a roar."

This time, however, it's no use expecting us to print up T-shirts protesting his remarks. Just like Buck Lee, we're all too busy driving our federally-subsisized gas-guzzling Hummers.


Anonymous said...

last time I checked the national flood insurance program was not subsidized by the gov't. Premiums exceeded payouts. The gov't will loan money to the program but the program must pay it back.

Michael O'Donovan said...

Really enjoyed your comments and expert reporting skills- your "right on the money" with beach prices and FEMA; but as we all know what goes up must come down...maybe when all the speculators leave the beach can return to just being The Beach.

surfacetoair said...

And it is a crying shame that the average American pays for the reconstruction, again and again and again and again. I can think of far better ways of wasting the tax payer's money than rebuilding the homes of the idle rich who choose to live on sand bars.