Patrick Flanary: No one knows when the next major hurricane could hit the Cape, Coast, and Islands. But if and when the big one comes, it will bring days of wind, waves, and worries. And then the skies will clear. The economic impacts, on the other hand, could last for years. CAI’s Eve Zuckoff has details on how that could play out long term, and joins us now for the third installment of our series on hurricane preparedness. Hi Eve.
Eve Zuckoff: Hi Patrick.
Patrick Flanary: The Cape’s housing market is so much more dominated by vacation rentals and second homes than other parts of the state. How might a major storm impact our unique real estate market?
Eve Zuckoff: Well, to answer that we can look at places like the Jersey Shore, which has a really similar real estate market to the Cape and Islands. So I talked with Rutgers professor Clinton Andrews, who’s studied how that state’s coastal real estate market was affected by Hurricane Sandy in 2012. Here’s what he said:
"The houses that were affected by Sandy that suffered damage, for three years they were worth less than neighboring houses, but by year four the market had forgotten. And they were worth just as much as neighboring houses," he said.
In some markets, it takes even less time to see this collective forgetting to set in. And locally, this is good news for some homeowners who want to know their investment is safe, but it’s really concerning for people who are already struggling to buy. And it makes conditions even harder for year round renters.
"Recovering from economic dislocation, isn't my main concern because we will recover," said Paul Niedzwiecki, CEO of the Cape Cod Chamber of Commerce. "It's a question of … what are we going to look like as a community on the other side?"
Patrick Flanary: But who is actually doing the buying after a major storm reshapes a coastal area? Locals? Out-of-towners? Investment firms?
Eve Zuckoff: Right, the question underneath that one is: how does the makeup of a coastal community change after a major storm? So here’s what we know: after Hurricane Sandy, flood insurance premiums rose substantially in New Jersey and New York. That’s pretty common after a major storm. And that became a decisive factor for many middle and lower income people about whether they could afford to continue to live in their homes. It’s also just as difficult for new, middle income home buyers to afford those higher premiums. So a coastal area will fill up with people who can afford to not have flood insurance; that’s people who buy homes in cash, who are often the wealthiest among us.
This phenomenon — seeing natural disasters lead to uneven and lasting demographic changes — is really worrisome to people like Paul Niedzwiecki, who heads up the Cape Cod Chamber of Commerce.
"The Cape may look similar, 20-25 years from now, but the people that really made the Cape what it is might not be here anymore," Niedzwiecki said. "I mean, there's a risk that we might not have a viable middle class, and that results in a real risk to a local workforce and labor supply, which is only going to increase cost."
Patrick Flanary: How about the wider picture? How do you begin to measure the economic risk of the “worst case scenario” hurricane to the region?
Eve Zuckoff: Well, it’s hard to know until the big one hits us, but a report released by the Cape Cod Commission found that over the next 75 years, private, commercial, and public buildings will incur up to $18 billion in damages as a result of sea level rise and storm surge combined. Of course, that number doesn’t address what’s often more important to us, which is: how much will a major storm cost me, my family? And it kind of depends on what you do. If you’re in one of the 12,000 jobs that relies on tourism on Cape Cod, that’s a hard hit.
The good news is that most property and flood insurance covers what happens to your home, but people can really struggle if they’re stuck paying for temporary housing, and addressing medical issues, while at the same time trying to stay on top of mortgage payments and other bills when their life is interrupted.
Patrick Flanary: If the Cape suffered a major hurricane, or a cluster of them as we saw in the 1930s through the ‘60s, is there a tipping point where we could see our region become less desirable overall?
Eve Zuckoff: Well, this question here really taps into this buzzy phrase called “climate migration." Academics have been trying to estimate the potential scale of this phenomenon for decades with mixed results. Because you can take the example of Miami, Florida on the one hand: it’s among the most vulnerable cities worldwide to the impacts of climate change — scientists and city officials agree on that. And that's expected to force people to move. Yet it’s undergoing a massive population and development boom, because it’s a hub of art, culture, business.
So then people like Paul Niedzwiecki think, yeah, it’s possible we could need some kind of marketing campaign, after a major storm or series of them, that promotes our resilience. But, he says, it probably wouldn’t take a lot — because the Cape and Islands aren’t just a place that people visit. We live in a place people really care about.
"And I think that is part of what's always made us the resilient community that we are," Niedzwiecki said. " So, even with a massive storm and massive destruction, we will rebound. I have no question about that. To not rebound would fly in the face of centuries of experience here. It's just a question of what we're going to look like on the other side."
That question holds a lot. It’s: 'What do we rebuild, and how?' But also: 'Who will be able to make it through the major transition that will come eventually?' And when you try to factor in climate change, which could bring unprecedented damage to our region — there’s a lot that’s unknown here.
Patrick Flanary: That’s CAI’s climate and environmental reporter Eve Zuckoff. Eve, thank you.
Eve Zuckoff: Thank you!
Patrick Flanary: And this is the final installment of our three-part series on preparing for hurricanes. You can find all three pieces on our website under, “The Big One.”
This conversation has been lightly edited for clarity.
