This question actually has many layers, because the answer is different when you ask, “How do hurricanes effect the economy in the short-term,” “the long-term.” Or, “How do hurricanes effect the national economy,” or “how do they effect the area that was impacted?”
In the months following a storm, the local economy will initially see huge losses of wealth. But following that, thriving areas will actually see a bump when insurance checks are cut, and rebuilding takes place. Spending also gets shifted around regionally. People evacuate and spend money elsewhere. Hardware store, gas stations, grocery stores and hotels see increased business while local business are shuttered. The national economy sees a small dip in GDP.
LONG-TERM – NATIONAL ECONOMY
According to an article in Florida Realtor “On net, storms tend to subtract from gross domestic product in the early months and add to it in later months – leaving the economy, on balance, with few overall effects after a year.”
LONG-TERM – LOCAL/REGIONAL ECONOMY
“Hurricanes impose huge losses of wealth and initially slow regional economies, but over time they can be a tonic that creates more prosperous communities,” According to Florida Realtor.
What the data shows here is that thriving communities rebuild, and often in a way that enhances the area and results in a better community. New buildings improve the area and are often built to better withstand acts of nature. “Some areas see a bump in growth from the rebuilding,” according to an article in the New York Times.
However, in poorer areas, most damage falls on the uninsured and rebuilding doesn’t take place. These areas may never fully recover.
Each storm and area has its’ own nuances. Was the damage mainly for flooding or wind? What percentage of the effected had insurance? How much damage occurred to the local industry, such as were oil refineries impacted? My short answer to a complex question is that in most cases, areas hit by hurricanes come out stronger in the long-run and so does our national economy.
For more information on this topic, read my Blog Post, “The Florida Keys 1 Year After Hurricane Irma.”
“Hurricanes make us poorer but don’t slow the economy” Florida Realtor, 9/26/18.
“Hurricane to Cost Tens of Billions, but a Quick Recovery Is Expected,” New York Times, 8/28/17.
The Florida Keys were my home for 10 years. Specifically, I lived on Cudjoe Key at mile marker 23 which means it is right above Key West with the southernmost point being mile marker zero. Although I had been in St. Pete for several years when hurricane Irma hit in 2017, I watched the news as the damage unfolded with a sick feeling in my stomach. Despite that I had sold my former home there and closed my business, it all still felt like it was hitting home.
Key West was left virtually physically unaffected. Irma’s eye hit right over my old house in Cudjoe Key and spared the area to the west. The Lower Keys and Marathon were the most severely impacted, but damage was done all the way up to Key Largo.
“Almost 5,000 properties were damaged or heavily destroyed by Hurricane Irma when it made landfall at Cudjoe Key on Sept. 10, 2017. Rebuilding those lost homes has been extremely slow. According to county data, only 228 permits for demolition of properties destroyed or badly damaged have been submitted since the storm. Only 27 permits have been filed to rebuild single family homes and just three have been submitted for new mobile homes.”*
Immediately after hurricane Irma, the landscape of the Keys was drastically diminished with many downed trees and trees and shrubs stripped of leaves. I spoke to my good friend Loren Rea who lives in Sugarloaf Key (MM 16) and asked for her perspective on life in the Keys post-Irma. “It is amazing to see how much things have grown back,” said Rea. The tropical climate of the Keys has allowed for fast regrowth. This includes the mangroves which were affected but are also growing back.
In the Lower Keys and Key West, things look pretty normal. But in Big Pine Key, clean-up work is still in progress. Now a year later, groups still go out on organized weekend cleanups to remove debris from canals and mangroves. Keys residents have self-coordinated to do some of the clean-up themselves.
Some of the islands were shifted by Irma. Picnic Island, a long-time popular hangout spot for boaters, is now 3 separate islands according to Rea. Local fishing guides are out putting anglers on fish just as they were before Irma.
The chart below of closed sales by month shows that most months after hurricane Irma have had a significantly lower number of closed sales than the preceding year. Prices, however, have continued to rise with the median price up 4.3%. The supply of inventory in the Keys is much higher than the rest of the country with 9.2 months compared to the average of 2.9 in most of Tampa Bay. Median time to sale in the Keys is 141 days compared to 65 in Pinellas County.
The labor force is now 11% smaller than it was before Irma. * Rea said that the effects of a decreased population and workforce are felt in daily life. Lack of staff in doctors’ offices, stores and restaurants is affecting service. The Keys population swells in winter-months with snowbirds and vacationers. But the year-round residents are those working in the restaurants, hotels and other tourist attractions. Post-Irma the Keys had a housing shortage. Many displaced due to damaged properties found temporary harbor in hotels but were pushed out once tourist season rolled around. Some residents just couldn’t withstand the loss of income felt around the hurricane. And some landlords capitalized on the housing shortage, and raised rents adding to the financial blow. The suicide rate in the Keys doubled post-Irma,** and every resident seems to have known a handful of people lost to it.
Every hurricane is unique just as the Keys are a unique place.
*Hudson, Tom: Health News Florida, “Rebuilding The Florida Keys One Year After Irma,” 9/7/18
**Florida Keys Cope With Suicide Spike After Hurricane Irma, http://health.wusf.usf.edu/post/florida-keys-cope-suicide-spike-after-hurricane-Irma
Central Oak Park has an exciting new neighbor in one of its architectural treasures. I went to visit the new location of Squaremouth at 4355 Central Avenue recently to find out exactly what’s going on.
Squaremouth is an insurance technology company. They recently relocated from downtown St Pete to their new location that was formerly the Redeemer Engelical Lutheran Church. This development is favorable for Central Oak Park for several reasons. The existence of a progressive tech company bodes well to the future development of our Central Avenue corridor. Squaremouth is also doing some much-needed renovations to the property while still maintaining the existing structure and its Spanish character.
Rumor has it that there were several other bidders for this property that posed a likelihood of demolishing the current structure and building a new modern structure. I for one am glad that Squaremouth was the winning bidder given their plans for renovation and restoration of this beautiful 23,000 SF building built in 1950.
I spoke to Meghan Moncrief, Marketing & Sales Director, about their plans for the location which include a new roof (all 23,000 SF!$!) and restoring the open courtyard area and balconies (as shown in the below photo). The pews are being donated to a church in Haiti. The existing beautiful stained-glass windows are being donated to a church in Cambodia and replaced with windows that allow more light. They also have plans to make a community area and coffee shop that will be open to the public. That means that Central Oak Park residents will have a coffee shop that we can walk to!
Squaremouth is the largest travel insurance shopping engine that allows consumers to compare travel insurance policies from every major provider in the United States. Using their online comparison engine and over 60,000 customer reviews, travelers can search, compare, and purchase travel insurance. Travel insurance policies can cover trip cancellations or medical coverage while traveling. The Squaremouth workspace is characterized as an open workspace with comfortable chairs where employees move around in the workspace. Their culture is described as Google-like, with beer taps and games. Work schedules for their 35 employees are very flexible and vacation is encouraged.
Meghan said that after the renovations are done, Squaremouth wants to become more involved in the community. I told her about the Central Oak Park porch parties and hinted that Squaremouth would be a good location for one!
Currently, Squaremouth’s largest community initiative is their Thank You Campaign. Squaremouth employees search for 20 outstanding customer service providers in St. Pete and surprise each with $1,000 in cash, and an additional $10,000 to the overall winner. The winner this year was Melissa Wolf from 3 Daughters Brewing. Read more on this campaign here.
As a neighborhood, let’s welcome them and embrace what the future holds for this property, Squaremouth’s prosperity and our progressing community.