No matter where you live in the country, the devastation wrought by Hurricane Ian, which made landfall over Southwest Florida on Sept. 28, will impact your remodeling, restoration or home improvement business next year. Early estimates of losses were upwards of $70 billion, much of which will cover the cost of repairs to homes across the Sunshine State on up into the Carolinas.
To put the size of the loss in context, in a typical year, insurance losses paid to homeowners amount to $20 billion nationwide. This is more than three times that amount for just a few states. Setting aside the massive human and economic toll, repairs of this magnitude will likely take years to complete.
The negative impacts are clear. Demand for building materials is expected to soar. There will be a drain of labor to affected areas. Prices for both will certainly have to rise in response. Also, the struggle to obtain materials and finishes in a timely fashion will not abate anytime soon.
The sheer volume of needed repairs means the supply chain imbalances that have plagued the industry since the summer of 2020 and were showing improvement will reverse course. And it is happening at a time of record-high inflation.
Over the longer term, of course, a storm this devastating will surely spur conversations that lead to changes in city planning, building codes, and the willingness of large insurers to continue to cover losses in coastal areas to the extent they do today.
Local officials in Florida assessing the damage to their communities spoke of moving forward with expensive, decades-long plans to increase the resiliency of their communities. Resiliency may be a term you’ve heard but have not quite fully understood in recent years.
As forecasts for sea levels rise globally, resiliency is a term that will increasingly be used to describe a shift in changes to the built environment. Resilient homes and communities will enable inhabitants of coastal areas to quickly rebuild and get back to their lives. Those plans may also include the relegation of some barrier islands and low-lying areas to the sea.
Fewer people will build or remodel in such places. Resiliency does not just apply to coastal areas. In other regions, resilience applies to various tactics and strategies for addressing a diverse array of extreme conditions, including wildfires and drought.
Ian’s devastation will result in long-term changes to codes and how we manage the built environment going forward. The role for residential construction pros is enormous. The next generation of leaders in this industry will need to be the ones who carry the flag of quality construction forward and responsibly assimilate the coming changes.
In the shorter term, there will be no significant slackening of demand for remodeling, restoration or home improvement in 2023, no matter how high interest rates go. At the same time, it won’t be easy money. With shortages and rising costs, business complexities will persist. QR