It has been 60 days since Hurricane Ian hit Southwest Florida and left its path of destruction across the state. Ongoing surveys estimate that 20,000 homes in Lee County (Fort Myers) have been destroyed with another 2,500 in Collier County (Naples). The City of Fort Myers alone estimates their storm damage to be $600M! Lee County has reported they have reached the milestone of 1 million cubic yards of debris removed and estimates another 3 million cubic yards of debris remains. The magnitude of these numbers is staggering and doesn’t include any after-effects from elsewhere in the state.
The observed short-term impacts on the Florida construction market have ranged from labor and materials becoming more readily available as those resources have been diverted from stalled or destroyed construction projects to the exact opposite, a disruption in labor and materials originating from Southwest Florida.
The question most directed to us is what will be the hurricane’s longer-term effects on the Florida construction marketplace. This is a tougher question to answer as there are a lot of moving parts. Many homeowners and small businesses did not have flood insurance policies in place (a pricey premium or secondary policy paid on top of typical homeowner’s insurance) and they will simply not be able to afford the cost to rebuild. The loss of revenue alone will put many small businesses out of business. There are interest-free emergency bridge loans as well as economic and physical disaster low-interest loans that may help homeowners and small businesses but it will likely not be enough. This could leave an economic void for Southwest Florida over the next 1-3 years.
Another long-term impact on Florida’s construction market currently being discussed is a change in building codes. After Hurricane Andrew in 1992, Florida building codes were changed to make buildings withstand higher wind speeds. What Hurricane Ian is showing Florida lawmakers is that codes addressing storm surge need to be mandated, at least for coastal areas. Additionally, property insurance rates are anticipated to increase putting additional strain on construction project proformas. Lastly, there has been an influx of migratory construction workers who, for a lack of a better term, are storm chasers. Governor Ron DeSantis has historically not welcomed migratory workers, but it may serve him well to turn a blind eye to aid in rebuilding. Then again, it is an election year so anything can happen.
One guarantee will be that once the rebuilding of Southwest Florida is in full swing, there will be a gravitational force pulling construction materials and labor to that region. Some construction industry experts think the marketplace will stabilize in a year, while others say more or less.
Vice President, Southeast Region
The Douglas Company
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