New Growth on West Coast of Florida Puts Millions at High Risk when Hurricanes Strike

By October 16, 2017Construction
New Growth on West Coast of Florida Puts Millions at High Risk when Hurricanes Strike

The building boom on the west coast of Florida, especially in the Tampa area, put many more people in potential danger once Hurricane Irma shifted to these areas, reports the Wall Street Journal.  Major development has occurred up the west coast during the last few decades in affluent areas in Naples and new subdivisions of middle class homes in Tampa Bay.  Many of these communities are built on filled-in marshland close to sea level and are vulnerable to storm surge during a hurricane.

A 2015 study of the Tampa Bay area by Karen Clark & Co., a firm specializing in catastrophe-modeling, found that Tampa is the most vulnerable city in the United States for storm surge and flooding during a catastrophic hurricane. The study estimated that losses to residential, commercial and industrial property would cause at least $175 billion in damages to Tampa.

During the last five years developers in Florida have ramped up construction as the housing market rebounded and the aging population migrated south to warmer climates.  Tampa issued 25 percent more building permits during this time for single-family homes, and represented one of the largest building booms in the country.

Fifty percent of residents live in areas that are less than 10 feet above sea level. The replacement cost of property (not market value) in Tampa is estimated to be about $1 trillion according to catastrophe modeling firm AIR Worldwide. On the eastern side of the state in the counties of Palm Beach, Broward, and Miami-Dade, the replacement value of property is estimated to be about $1.5 trillion according to AIR Worldwide.

If a catastrophic hurricane occurs in Tampa, most of the damage could come from storm surge rather than high winds, which are often not part of a homeowner’s standard insurance policy.  A declining number of homeowners in Tampa have flood insurance coverage according to research done at the Metropolitan Center at Florida International University.  Many people have become complacent since there has not been a major hurricane in the Tampa area in most people’s lifetimes. Unless a home is located in a flood zone, flood insurance is not required.  Most flood insurance policies are provided by the federal government’s National Flood Insurance Program.  As of June 30, there were 1.7 million policies in force, or about 19 percent of houses in Florida.  Building codes have been strengthened in the state since Hurricane Andrew, but developers are pushing back on building structures that can withstand a Category 4 or 5 hurricane, according to the Wall Street Journal report.

Source: Wall Street Journal, “Building Boom Puts Millions in Path,” by Laura Kusisto and Nicole Freidman, September 11, 2017

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