BOOK REVIEW: BREAKING OUT THE MOLLY HATCHET
As another Hurricane (Helene) bears down on the Gulf Coast …
The Great Displacement, as defined by the author: “When climate change makes it too risky or expensive for people to stay somewhere.”
Which logically leads one to the next question: Well, then they gotta go somewhere else. So who funds the bailout/gets left holding the bag? The homeowner? The insurance company? The American taxpayer?
Bittle examines Displacement with firsthand accounts from regions affected by drought (Arizona), fire (Santa Rosa, Calif.), flood (Houston, Tex., Norfolk, Va., the Florida Keys) to paint the picture of what’s already occurred and what may lie ahead.
And contemplates whether the retreat will be coordinated or just a mad scramble to higher ground.
The bookends of Bittle’s tale are the Florida Keys and coastal Virginia.
While both areas are deemed lost causes in the long run, the issue in the Keys is more immediate.
The estimate is $1.8 billion … just to protect the roads through the year 2045.
“A truism in the field of climate adaptation is that you can save money later if you spend money now.”
Everywhere except the Keys.
$1 spent in Miami is estimated to be worth $6 later. In the Keys, it’s estimated worth is $0.41.
As for Norfolk, the chapter begins with a tale of a young couple who buy a duplex near the water for about $200,000. And within four years, their flood insurance premium increases to $13,000/year.
As one realtor observes with gallows humor, “If a street name ends in ‘Crescent’, I would run away. Either run away or get a kayak.”
So the reality is, this poor young couple got caught in an expensive game of musical chairs where the music finally stopped.
Which will ultimately hold true, to some extent, for the 30% of the U.S. population which lives in coastal real estate markets.
The destabilization of such markets, if synchronous, could have cataclysmic financial impact.
In Norfolk, the key stats are as follows.
It’s a city that’s 5’ above sea level.
The standard loan is 30 years
The median length of home ownership is 13 years
And climate scientists believe it’ll take 70-100 years for the sea level to rise 5’.
So move that ass cheek closer to the chair, because as anyone who’s been victim of a disaster can attest, the music can stop without much warning. And as much as we all may bitch about insurance, consider this observation in the aftermath of the Tubbs fire in Santa Rosa:
“The Mattsons thought their new annual premium was outrageous, but the insurer was saying it was outrageous for them to live where they did.”
The Tubbs Fire of 2017 had precedent (much like the Round Fire of 2015 which burned Swall Meadows).
The Hanly Fire of 1964 essentially traced the same path as the Tubbs Fire of 2017. But Hanly destroyed just 100 homes because the area had still largely been undeveloped at that time.
In the aftermath of Hanly, city leaders didn’t support construction of whole new subdivisions and neighborhoods in the largely rural fire zone. But as memories of fire faded, the city ultimately reversed its policy.
The Tubbs Fire a half-century later took 5,000 homes.
So here’s what happens in events like Tubbs – unsurprisingly the wealthy fare better than the not-so-wealthy.
A few factors.
Fire = reduced housing stock = price surge for the homes that remain.
Adding fuel to the fire so to speak, homeowners typically have policies which provide for “rental cost equivalent.” Translation: Insurers pay for up to two years of displacement – at the equivalent value to what it would have cost to rent one’s home. So it created bidding wars fueled by the insurance payouts.
“As the bidding war continued, some landlords in Sonoma County began hiking their prices to absurd heights, setting rent at $8,000/month because they knew the victims out there had insurance policies that would allow them to pay that much or even more.”
Result: In a place where the overall housing vacancy rate had been 3%, “the already frenzied bidding war collapsed into a state of outright turmoil. Prices jumped 10, 20, 30 percent overnight. Then buyers outbid each other buy hundreds of thousands of dollars, families drove two hours to view apartments that wouldn’t even fit them, displaced homeowners emptied their savings to place deposits on condos they hadn’t even seen.” In short, if a thousand fire victims are scrambling for 200 vacant apartments, the richest 200 renters win.
I compare this scenario (which I would perceive as common) to the local Round Fire which burned 25 homes in 2015.
Back then, the local real estate market was not as tight as it is now. And we were lucky that in a small community like this, people offered homes and places to stay within hours.
I personally recall learning my home had burned while I was grabbing a bite to eat with my family at Great Basin Bakery. Maybe that was 10 a.m. By that evening, Steve Searles had rented me a house he owned in Chipmunk Canyon – and we were moved in.
The Houston chapter was illuminating because in good old Texas, there really are no rules. Each acre developers plowed under to create the latest cookie-cutter subdivision further and further out from the city’s core became one more acre of asphalt and one less acre to absorb water and runoff.
“There were no zoning laws in Houston, nor were there any real restrictions on permitting. The county government had never conducted flood studies of the bayous and officials had no interest in limiting development in those areas, not with the city going through such boom times.”
And get this. “Under state law the seller of a home had no obligation to disclose flood history or flood risk to prospective buyers. The seller had to disclose if there was lead paint, asbestos, or a fire history, but they could omit flooding.”
God Bless Texas.
As is typical with books like these, the anecdotal stuff is great. But the conclusions are always sort of tacked on and weak because frankly, no one knows how the hell to really fix it.
Author Bittle gives two examples of displaced folks who leave for higher ground, so to speak.
But hilariously, one moves from New Orleans to Tucson. This is considered an improvement, even though Tucson is plagues with (lack of) water issues.
A second person moves from an exurban place in California which has burned to … an exurban “much cheaper” home outside Boise, Idaho, “surrounded by lakes and streams that have never been touched by fire.”
Not yet, anyway.
As Bittle writes, “Does the government owe its citizens the freedom to live wherever they want, no matter the risk, or does it have a responsibility to move them out of the most vulnerable places?”
… While we all look on in fascination and horror as Helene promises the usual, gory storm footage and teary aftermath.
