Savings

Hurricane Ian destroyed pensioners’ savings

Hurricane Ian may have destroyed the financial security of thousands of Florida retirees whose savings were invested in homes and apartments destroyed by storm winds and flooding.

Post-storm modeling from analytics firm CoreLogic Inc. found nearly 800,000 homes in Florida experienced hurricane-force winds during the storm, with about 600,000 experiencing winds strong enough to flatten a home.

The storm also disproportionately impacted older residents in some of the hardest-hit areas of the state, such as Lee and Collier counties, where nearly one in three residents are over 65.

According to US Census data, 29% of the population of Lee County, where Ian made landfall, is of retirement age. In Collier County, immediately to the south, that figure is 33%.

Experts say the area’s senior boom, which began after World War II and has accelerated in recent decades, reflects Florida’s enduring appeal to retirees and snowbirds fleeing the cold states of Winter. Florida also has no income tax and has lower square foot housing prices than many other coastal states.

Southwest Florida has seen one of the fastest and most concentrated growths among seniors, many of whom bought homes in the hope that Florida real estate values ​​would hold steady or rise. Now that many of their homes are gone, the prospect of renting, building or buying new homes comes as the state faces soaring building material prices, labor shortages work and what is expected to be a severe housing shortage.

“So while we’re still counting the aftermath…it looks like Hurricane Ian has displaced thousands of Floridians whose homes are now uninhabitable, taking away not only their shelter but also their financial safety nets,” said Pete Carroll of CoreLogic in a webinar on Thursday.

CoreLogic’s initial modeling showed that Ian’s total property losses from wind and flooding were between $40 billion and $70 billion.

Flood losses from insured residential and commercial properties were estimated at $8 billion to $18 billion, while uninsured property losses were between $10 billion and $17 billion, according to the analysis. Wind losses, mostly concentrated in coastal communities, have been estimated at $23 billion to $35 billion.

For homeowners with federal flood insurance policies — which are required in areas most at risk of flooding based on FEMA flood maps — payments for residential buildings are capped at 250,000 $,” Carroll said. Still, mortgage homeowners in the hardest-hit areas of Lee and Collier counties have an average of $316,500 in home equity.

Selma Hepp, acting head of CoreLogic’s office of chief economist, said in a blog post last week that the disruptions in Florida housing markets after the storm will be significant and could last for months or even years. .

“Early on, we’ll probably see an increase in mortgage defaults, as is usually the case after disasters,” Hepp said. “In addition, rents are likely to jump as households that have lost their homes seek immediate shelter.”

“Longer-term house price growth in hard-hit areas is likely to be lower than the rest of the state and nation, as people may choose to move to areas less prone to natural disasters. “, she added.

Gladys Cook, director of resilience and disaster recovery for the Florida Housing Coalition, said seniors make up a substantial portion of low- and middle-income residents who depend on affordable housing. Many of those residents are “just going home to family or they could leave Florida,” she said in a phone interview.

Cook, who has lived in Lee County for 30 years, said she thinks the number of seniors affected by the hurricane could be much higher than early estimates indicate.

“This loss is extraordinary,” she said. “It’s just going to take years to catch up on housing for all these people.”

Reprinted from E&E news courtesy of POLITICO, LLC. Copyright 2022. E&E News provides essential information for energy and environmental professionals.