While it will be some time before we have a definitive figure there is no doubt that the Houston real estate market has been decimated by Hurricane Harvey. A recent report suggested that the media has underplayed the problem of real estate devastation across Houston. As a consequence, property worth some $55 billion may have been directly impacted by the floodwaters. Houston is the six largest US metro with an estimated 1,600,000,000 ft.² of leasing space which excludes single family homes.
How wide is the devastation?
CoStar has issued a report suggesting that 4,000,000 ft.² of commercial space across 12,000 different buildings has already been impacted by the floodwaters. The estimated $16 billion worth of the properties include apartments with many people looking towards temporary accommodation in the short to medium term.
There are effectively two different flood areas in Houston, the 100 year flood zone and the 500 year floodplain. An estimated 20,000,000 ft.² of office space and 72,000 apartments have been impacted within the 100 year flood zone. An additional 225,000,000 ft.² have been impacted within the 500 year floodplain which has seen a mind-boggling 20 million gallons of flood water!
Hurricanes are no respecter of wealth
Recent reports suggest that low to moderate income households have been hit hardest especially those situated in the south-west of Houston. Here it is believed that around 30% of the 66,000 apartment units in the south-west of Houston have been impacted. The rising waters of also hit Houston’s River Oaks which is one of the more wealthy areas of the region with luxury mansions ruined and a growing repair bill.
There are major challenges for the local authorities with retail and hotel properties also impacted by the floods. So, we now have pressure on supplies and pressure on accommodation space even in the corporate sector. While Donald Trump has requested a multibillion-dollar bailout fund from Congress many are again concerned about political infighting and potential delays. The people of Houston, and other areas of the US hit by Hurricane Harvey, need help now!
Repairing the damage
Once the floodwaters recede the authorities will be able to assess in more detail exactly what has happened and what is required to repair the damage. Aside from the obvious structural issues as result of Hurricane Harvey, mold will mean that the interiors of many homes and businesses will need to be ripped out and rebuilt. Even if politicians are able to come together with a quick and generous bailout package there are even more challenges ahead!
Finding a company to repair damaged homes will not be cheap due to the expected excessive demands from residents and business owners right across Houston. The other issue is, as many contractors will be coming from out-of-state where will they stay?
The aftermath
At a time when millions of people in the US are struggling to put a roof over their heads it is disgraceful that politicians continue to points score from each other. What Donald Trump did or did not do during his visit to Houston is by the by, he was there and he has seen the aftermath of Hurricane Harvey. Congress needs to come together to agree a package immediately and not only find short term accommodation for those left homeless but also assist with the massive repair job to hand.