By Andrew Hunt
Rebuilding the estimated 220,000 homes destroyed during the 2005 hurricane season will be a daunting task for residents of the Gulf Coast region. As work gets underway, builders, tradesmen and product distributors are finding that the challenges are not just in rebuilding homes but also rebuilding the construction industry itself. According to builders and suppliers who attended the Pro Dealer Conference in Farmington, Pa., this fall, issues slowing down the rebuild range from insurance settlements to federal assistance.
Lifelong Louisiana resident Vic Planetta Sr. not only saw damage to his home during Hurricane Katrina, he also saw his homebuilding business take a hit. Planetta Custom Homes had previously closed about 100 projects a year in the New Orleans area.
"Our business suffered $7.5 million in losses, just in damage from Katrina," said Planetta. "We had to retool our company in order to do anything. When we came back to the region after the storm, we put ads out in local papers to hire people to clean up our offices and employee homes."
Ready to work but no place to live
"The labor force is something we are tussling with," Planetta said. "Some of our craftsmen in the field weren't able to come back because they didn't have any homes. We have a lot of workers who came here to help with the rebuild but have no place to stay, so sometimes they have to sleep in the home that they are working on."
Planetta also recognizes the challenges homeowners face when dealing with insurance companies. Besides simply waiting for settlement checks, some insurance companies are contesting how the damage to the home was done. According to Planetta, some areas hit hardest by the storm surge weren't areas where homeowners were required to carry flood insurance. Much of the damage to the homes was initially done by the gale force winds, but insurance companies are blaming the flooding, which was a result of the hurricane — not part of it.
"Updrafts and 'push' weakened homes, and then the flood came in and took the homes out. Insurance companies could dispute damage done by wind. Some companies refuse to pay anything, blaming it only on the water, and not the wind," said Planetta. Because of this and a desire to reclaim their lives, many homeowners are settling for much less money than they expected, leaving them with too little to rebuild or repair their homes.
Clean-up hindered by insurers
Another complication with insurance companies is that often any debris on the home site must be left until the claim is settled. This compounds the clean-up problem and delays rebuilding efforts because the debris must be removed before any work can be done.
"The amount of debris is absolutely incredible," Planetta said. "One [suggested] solution was to dig big, giant pits, then burn the debris. The problem with this is all the soil contaminants and pollutants going into the air. The Army Corp of Engineers is doing a bulk of the debris removal — but if we don't get it cleaned up, people won't come back."
As Gulf Coast regional vice president for 84 Lumber, a major building products distributor, Mike Lyons encountered similar challenges. "We left for the storm but were back within three days. We did not have power, so we hooked up a generator and had 21 employees staying with us," said Lyons.
84 Lumber's New Orleans location operated without a front wall for three weeks. "Getting supplies for the region wasn't the problem; getting the transportation to get in, find fuel, and be able to leave was. All in all though, we were back up and running pretty quick."
Lyons realizes that the rebuilding effort is occurring in stages but is mostly dependent upon money flowing to the homeowners.
Waiting for FEMA
"The reality of the rebuild in the Gulf Coast is that it is coming in waves, then hits a plateau and holds for a while. Homeowners with enough money were able to rebuild or renovate right away. The next wave came when insurance companies started to settle, and the next wave will be when the government starts to distribute the rebuilding grants."
The grants are part of a $16.7 billion fund established through the U.S. Department of Housing and Urban Development's (HUD) Community Development Block Grants (CDBG) program to help rebuild damaged housing and other infrastructure. Eligible homeowners whose primary residences were located outside pre-Katrina designated flood zones and were destroyed or severely damaged following Hurricanes Katrina and Rita can receive up to $150,000, depending upon the initial value of the home and other assistance they may have received from insurance settlements or FEMA.
By August 9, more than 100,000 residents had registered for the program, though according to Lyons, only 51 residents had received the grant money as of the beginning of October.
"Business started with clean-up, repair and remodeling, drywall, roofs. There is still a whole lot of repair and remodel work to be done, probably for another one to two years. After that new construction should pick up. As remodeling drops off and checks come in, new starts should really accelerate," said Lyons.
Andrew Hunt is a Pittsburgh-based freelance writer who specializes in residential construction.
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