\n<\/p>\n
After Hurricane Ian<\/strong>, Florida real estate<\/strong><\/a> took a huge hit<\/strong>. With multiple communities literally underwater and the entirety of Southwest Florida<\/strong> facing pricey home repairs, Florida went from being the Sunshine State to the \u201cdo we have enough insurance?\u201d state overnight. And with more and more <\/strong>natural disasters<\/strong><\/a> taking shape across the US, how can homeowners, landlords, and renters prepare for what mother nature is throwing at us<\/strong>?<\/p>\n Thanks to both heavy state and federal funding, Florida is well on its way to a successful recovery<\/strong>, but how did this happen? To learn more about the ins and outs of disaster recovery<\/strong>, we brought on Jeremy Edwards<\/strong>, Press Secretary at FEMA <\/strong>(Federal Emergency Management Agency), to share what the federal government is doing to aid in building back communities<\/strong>. Jeremy touches on storm tracking, pre-disaster preparedness, flood insurance <\/strong>coverage, and temporary housing programs<\/strong> landlords can use to help affected areas.<\/p>\n We also take a detour to talk about the rising insurance costs<\/strong> in disaster-prone areas like the Gulf Coast and the flood mitigation assistance grants<\/strong> that FEMA has set up for local governments to lower their chances of a devastating event. Jeremy also talks about what private homeowners can do if they don\u2019t have enough insurance coverage<\/strong>, and how they can build back better so their own homes are protected when disaster strikes.<\/p>\n Dave: Jeremy: Dave: Jeremy: Dave: Jeremy: Dave: Jeremy: Dave: Jeremy: Dave: Jeremy: Dave: Jeremy: Dave: Jeremy: Dave: Jeremy: Dave: Jeremy: Dave: Jeremy: Dave: Jeremy: Dave: Jeremy: Dave: Jeremy: Dave: Jeremy: Dave: Jeremy: Dave: Jeremy: Dave: Jeremy: Dave: Jeremy: Dave: \u00a0<\/p>\n \u00a0<\/p>\n<\/div>\n Note By BiggerPockets:<\/b> These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.<\/p>\n
This is On the Market, a BiggerPockets podcast, presented by Fundrise.
Hey, what\u2019s going on everyone? Welcome to On the Market. I\u2019m your host, Dave Meyer. Today we\u2019re going to be talking about the impact of natural disasters on local economies and the housing market because of what happened recently in Florida with Hurricane Ian. Most of us here at BiggerPockets were actually at the BiggerPockets conference during Hurricane Ian or right after Hurricane Ian. And one of the most common questions that I got then, and following that is, how does this impact people, either renters or homeowners, landlords in the area? How do governments, how do investors respond to these types of situations? So since then we have been gathering some information. We\u2019ve done a bunch of research on how these types of events impact the housing market, and we have the press secretary from FEMA, the Federal Emergency Management Association, who\u2019s joining us today to talk about how the federal government basically assists state and local governments in their recovery efforts.
So not only if you were impacted, hopefully not either directly or indirectly by Hurricane Ian, there will be some really good information for you about how to access some of those funds. But also just as investors, home buyers, people in general interested in the economy, there is some really good information about how to prepare yourself, how this all works. And so I think we have a really interesting show for you. So make sure to stick around for this one.
Okay, so if you\u2019re not familiar with Hurricane In, it was a huge disaster. Unfortunately, 146 people in Florida died from the event as it hit mostly Fort Myers and Naples, Florida. As we learned from our interview with Jeremy in a few minutes, there\u2019s actually 26 counties in Florida that were directly impacted. And this has just been a terrible situation across the board. Obviously, personally, people have lost their homes, they\u2019ve lost their possessions, many people are displaced. I read a sort of heartbreaking article earlier about elderly retirees who are struggling to rebuild.
And so this has been a really big issue. And of course, we don\u2019t want to make light of the humanitarian and social issues that came out of this. We deeply feel for the people have been impacted. But as this show talks about investing home ownership, we want to talk about what happens in these situations to our businesses, our investments, the things that the people on the show might be wondering about. So we did some research and what we\u2019ve seen is that since the events in Hurricane Ian, the housing market in this area has really taken a very significant hit. And a lot of this area of Florida, which is Western Florida, was already starting to see a decline. You probably know this, but it was one of the hottest markets in the entire country during the pandemic, and it was starting to come down.
But since then, in the weeks ending October 16th, so just a couple weeks ago, we saw that the pending home sales down nearly 60%, 60%, year over year in Cape Coral, Florida, which is really significant. We\u2019re also seeing similar numbers in Naples, 52%, and North Port, 51%. Meanwhile, elsewhere in Florida, the housing market is cooling but not as much. Like in Miami for example, it\u2019s 47%. In Jacksonville, it\u2019s 46%, Palm Beach, it\u2019s 43%. So you\u2019re seeing that this area of the country is seeing a more significant slowdown in the housing market than the rest of this. Nationwide, I should mention, that home sales are down 32%. So when you look at areas like Cape Coral, it\u2019s nearly double what\u2019s going on in the US as a whole. And that obviously makes sense because there\u2019s just less inventory on the market, a lot of homes need to be repaired.
But obviously, this means that we\u2019re going to see some decreased activity in the housing market. For example, in Cape Coral, we\u2019ve seen that new listing sank 59% on a yearly basis, and this is just going to further exacerbate this problem. We\u2019re not going to see a lot of home buying activity in this area until there\u2019s more homes that have been fixed and can enter the market. Now, this does have longstanding implications, not just for this area, but also due to just some of the things that we see happen after a hurricane. So thanks to Pooja Jindal, who\u2019s our researcher, did some research into this and we found that after hurricanes, financial hardship causes a large spike in home mortgage delinquencies.
For example, after Hurricane Ida, which was in 2021, but we wanted to compare what\u2019s happening now to something previously. We saw that in Houma metro area, which is in Louisiana, the delinquency rate for mortgages went up from 1% per month to 7%. So it\u2019s 7x\u2019d because of these hurricane. And now we\u2019ve seen that the percentage of home buyers in Houma who are at least three months behind on payments jumped by 50%. So this sort of makes sense logically that all of these areas are going to be negatively impacted economically. And we don\u2019t know exactly what will happen with Hurricane Ian specifically. But if this pattern continues, this could be a drag on that area\u2019s economy for the foreseeable future.
The second thing that I think is really interesting and potentially has long standing implications, not just for this part of Western Florida, but also for Florida and really the whole country, is what happens with insurance here. Because this event, Hurricane Ian, private insurance losses are expected to reach $67 billion. This is one of the largest natural disasters in the United States history. And that doesn\u2019t even include funds. We\u2019re seeing these huge numbers come out.
CoreLogic, one of the greatest, biggest real estate analytics firms came out and said that they think that the damage that was caused could be between 28 and $47 billion just for home sales. That first issue included businesses and other stuff. But just for that, it could be one of these deadliest costliest storms in the history of Florida. And this comes at an interesting time for Florida because Florida has already seen a lot of insurance companies start to leave, and premiums in Florida have gone up very, very significantly. Florida insurers, people who still operate, insurers who still operate, depend heavily on what is called reinsures. This is basically insurance companies for insurance companies. So like insurance companies, they analyze risk and they estimate how much to charge in premiums to ensure that they can pay for everything in case there\u2019s an event like this. But sometimes they\u2019re wrong.
And so they actually take out insurance to make sure that if they\u2019re wrong, someone else comes in with even more money to refill their coffers basically. So they\u2019re really dependent on these reinsurance programs. And actually Florida has actually, the state government has had to come in and create its own reinsurance programs because there\u2019s just not enough insurance dollars coming into Florida. Just as an example of what is going on with Florida\u2019s insurance program back in May, Governor Ron DeSantis called a special legislative session to try and shore up the insurance program and lawmakers took steps to including providing $2 billion in reinsurance to carriers. But obviously, that\u2019s not enough, right? $2 billion, that\u2019s great. But I just said that some of the estimates here are that insurance are going to be between 28 and $47 billion. Now, we haven\u2019t really heard from any insurers that this is going to be a catastrophic event for them and they can\u2019t pay for it.
But we\u2019ve already start to see insurance premiums go up in states like Florida or in places where I invest in Colorado where there\u2019s more wildfires. So that is just an open question about what goes on with insurance. I don\u2019t know exactly what\u2019s going to happen, but there have been a lot of questions. I\u2019ve been reading Florida newspapers all day preparing for this about what\u2019s going to happen with the insurance market in Florida. So although it looks like, according to Redfin, housing market activity is really declining, it looks like investors are actually not really that deterred right now. There was a recent Wall Street Journal article that says that investors are basically swooping in. And I was very excited to see that the person they quoted was Ken Johnson, who we had on this podcast back in, I think it was like May or June, to talk about his rent versus buy model that he created. Just as a reminder, it\u2019s a great episode if you want to go check that out.
But according to Ken Johnson, what he thinks is going to happen is, quote, \u201cWe\u2019ll most likely see an increase in prices almost immediately driven mostly by continued strong demand and stormed induced inventory shortages.\u201d He goes on to say, \u201cWhile pricing might be erratic for the first few months, the demand for living along a coastline with warm weather and a business friendly economy seems to have led to quick economic recoveries after recent past hurricane strikes.\u201d So this is just something to note that although it does look dire right now, and that is sort of going nationwide where we\u2019re seeing a decline in housing market activity, Ken Johnson, who again was on the show, thinks that this is going to be probably pretty short lived. And according to his research economic activity, home buying activity has picked up relatively quickly in Florida after similar events in the past.
So we invited on Jeremy Edwards from FEMA to talk about how the federal government is helping state and local governments shore up the insurance system, provide disaster relief for the people who need it. And so we\u2019re going to take a quick break, but after that, we\u2019ll welcome on Jeremy Edwards from FEMA.
Jeremy Edwards, the press secretary for FEMA. Welcome to On the Market.<\/p>\n
Thank you Dave. Great to be here. Thanks for having me.<\/p>\n
Absolutely. Thank you for being here. Before we get into some of the more recent events, can you help our audience understand what exactly FEMA is and what its mandate is?<\/p>\n
Sure. So FEMA is an emergency management agency. It\u2019s a federal emergency management agency. We kind of operate as a big coordinator of federal resources when there\u2019s a disaster. So most typically, folks\u2019 interactions with FEMA is like something terrible or tragic has happened, whether it\u2019s like a hurricane, a wildfire, flooding event, tornado. And basically what happens is the state or a territory will have a specific amount of resources to respond to that disaster. And usually, if they\u2019re going to tap out of those resources or they don\u2019t have enough money to respond to something significant, then they\u2019ll call on the federal government for what\u2019s called a major disaster declaration or an emergency declaration. And then that\u2019s kind of when FEMA steps in.
And again, our big kind of tools to address those is either direct funding through individual assistance or public assistance. And then the other hat that we put on is a coordinating officer. So we\u2019re basically at HQ pulling, together the various disparate parts of the federal government, whether it\u2019s like the US Army Corps of Engineers, HHS, those types of agencies. Coast Guard, sorry, I was blanking for a second, the US Coast Guard. Bring them all together and then kind of mission assigning them like what they\u2019re going to do.
So we\u2019ll say, \u201cOkay, US Army Corps Engineer, you\u2019re going to go help get the power back on. HHS, you\u2019re going to help set up some temporary health facilities to address those needs. US Coast Guard, you\u2019re going to help us with search and rescue.\u201d So that\u2019s kind of our main role. The other hat we kind of wear that\u2019s been more important with climate change, increased extreme weather is resilience. So we provide a lot of funding through our resilience office, resilience grants. We have flood mitigation assistance and hazard mitigation grant funding, which basically gives communities funding to strengthen them to better stand up, build back better. So that way when disaster is going to come, they\u2019re able to withstand it.<\/p>\n
Got it. All right. Thank you. So it sounds like you\u2019re funded by the federal government and respond and help preempt. Is it only natural disasters or is there other types of assistance that FEMA provides?<\/p>\n
No, actually, so it\u2019s hazards. So our authority comes from the what\u2019s called the Stafford Act primarily. And basically, natural disasters are usually what people think of, but it\u2019s really any hazard. It could be something that\u2019s related to nuclear, it can be a manmade disaster. We also have a role with continuity. There\u2019s like an issue with there\u2019s some sort of terrible thing that might happen in Washington, DC for example, where we have kind of a continuity role there too. So folks usually think of us when it\u2019s hurricane season because those are kind of the biggest types of disasters that will hit the nation, but it\u2019s really any hazard.<\/p>\n
Got it. Okay. Thank you for explaining that. Well, we are definitely guilty of thinking of you when it comes to hurricanes because the impetus for this show, our show focuses on people in the real estate industry and home buyers who want to take a data driven approach to their home purchase. And obviously, with Hurricane Ian recently, there was a massive loss of property, obviously, tragic loss of life as well. Can you tell us a little bit about how FEMA was or still is involved in the recovery from Hurricane Ian?<\/p>\n
Sure. So I don\u2019t want to say a good thing about hurricanes, but one benefit in terms of disaster preparedness is you can kind of see it coming a few days out. So we\u2019re tracking the storm early on. Before the storm made landfall, President Biden approved an emergency declaration for Florida, so that way they could kind of preposition materials. That emergency function really helps with the life saving and life sustaining efforts. So making sure that we can move personnel swiftly to an area, making sure they have commodities on hand, helping them with first response, search and rescue operations, things like that. So that was on the front end. We basically put a bunch of people and a bunch of resources in areas that were close enough to where once the storm passed we could basically flood the zone and get in there but far enough away where they\u2019d still be safe.
And then that\u2019s kind of like that immediately response action. So like I said, that\u2019s a lot of search and rescue efforts, making sure we\u2019re saving lives, et cetera. Then, basically right after that happens, you\u2019re switching into recovery mode and that\u2019s kind of where we are now. And that\u2019s something that\u2019s going to continue on likely with a storm like this for years, given the amount of devastation. So right now our primary role is supporting the state in things like debris removal, but then also providing both public assistance and individual assistance. The public assistance is what\u2019s going to the state for things like infrastructure projects. So there\u2019s a lot of bridges that might have collapsed, roads that need to be repaired, and that\u2019s when our public assistance comes in. And then the individual assistance is kind of the money we provide directly to survivors to help them make their homes habitable again, maybe give them some temporary housing assistance as well. So that\u2019s kind of the mode we\u2019re in and that unfortunately, with something like this, is going to be a few years.
Yeah. You just see the pictures, it looks horrible what happened down there and I\u2019m glad to hear that there\u2019s concerted effort by the federal and state governments to help everyone affected by that. What do you typically see? You said years. In this type of situation, I don\u2019t know if FEMA has any estimates, how long does it normally take for communities, we hear specifically about Naples and Cape Coral, some of the worst affected areas, how long does it take for them to recover?
For a disaster like this, we\u2019ve been told it\u2019s probably going to take somewhere in the ballpark of about seven years in this recovery. If you look at old disasters or disasters that we\u2019re still recovering from, like we\u2019re still recovering from Storm Sandy up in New York and New Jersey. There\u2019s still recovery efforts underway for Hurricane Maria, which that community five years later is in the middle of recovery and then they get hit by another hurricane. So these are long efforts.
Part of that is because when you have severely damaged infrastructure, it\u2019s just going to take time to rebuild those things. When you have areas where communities example in Fort Myers Beach have been completely almost washed away in some areas, that\u2019s going to involve folks not only trying to rebuild their lives, but in some instances, they might have to think about making tough decisions, can we even move back here? Can we rebuild here? So these recovery efforts take a long time, but FEMA has the funding and the resources and the personnel. We\u2019re basically there until the recovery\u2019s over. So we still have folks down in Puerto Rico who were originally recovering from Maria, they were there five years later. We have folks all over the country that are still helping folks recover.<\/p>\n
Got it. Okay. And so for specifically, let\u2019s just look at Hurricane Ian, the recent example, does FEMA help reconstruct homes, for example? You mentioned bridges and stuff, but what about local economic conditions or is it homes, businesses? What is the scale of what you\u2019re assisting with?<\/p>\n
Yeah, so there\u2019s a few different things. The first thing is FEMA is not necessarily the builder or the contractor. What we\u2019re really doing is providing the funds so the state can lead that effort. And a phrase that we use around here is state and local led, federally supported. So the state, because they\u2019re close to the issue, they\u2019re closer their constituents, they\u2019re closer to the residents, they know what they\u2019re going to need and they\u2019re going to have to make sometimes those tougher decisions of maybe we can\u2019t necessarily rebuild a community right here. We might have to start elevating homes. We might have to say this is actually now in a flood plain, we would not advise people building houses here. So we\u2019re basically going to be giving those folks money.
So right now, the federal effort, all told, that\u2019s FEMA assistance and small business administration as well, is about $2.6 billion has gone to the State of Florida. And then beyond just helping folks either rebuild their homes, a couple other tools that they can use are, there\u2019s SBA low interest disaster loans that are available for both homeowners, businesses and in some cases renters that basically in addition to any sort of FEMA assistance, they can get that type of assistance. And FEMA also offers flood insurance. We have a National Flood Insurance Program that insures properties up to $250,000 worth of damage. So there\u2019s a few things, few resources that folks can take care of, but primarily it\u2019s a state that\u2019s going to kind of be leading on those rebuilding efforts and then FEMA\u2019s kind of funding a lot of that stuff.<\/p>\n
Got it. Okay. You mentioned insurance, which is something I want to talk about, I\u2019m sure something you talk about all the time. But the idea of home insurance is that you are covered in these types of situations. So how does FEMA work with or augment personal home insurance?<\/p>\n
Yeah, so just to start off, generally, insurance is a confusing concept for a lot of people. It\u2019s very technical. But most homeowners\u2019 insurance actually doesn\u2019t cover things like flooding, unfortunately. So that\u2019s why separate from homeowner\u2019s insurance, if you live in a community that is participating in our NFIP program, the National Flood Insurance Program, FEMA is basically the insurer. They\u2019re underwriting those policies so you can get flood insurance through us and then we will insure your home or property. And then the individual assistance basically is to fill gaps or for folks who might be uninsured.
Now, what I will kind of say to your listeners is that FEMA\u2019s job is really to jumpstart your recovery. We\u2019re not necessarily there to make everyone entirely whole, that\u2019s kind of the state\u2019s primary job. We\u2019re there to basically say, okay, here\u2019s a disaster, here\u2019s injecting money into the problem, either directly to people or to the public through public assistance to the states to basically start that process going. But flood insurance, to your question, is really the best way to protect yourself, which is why we encourage everyone, even if you\u2019re not living on the beach or next to a river bank, to consider getting flood insurance because wherever it can rain, it can flood. And we\u2019ve seen disasters where Hurricane Ida, for example, comes up as a hurricane, turns into basically a storm system and then all of a sudden we see massive flooding in places like New York City that wasn\u2019t even in the path of the storm, so to speak. So that\u2019s definitely going to be the best way to protect yourself from these types of damages.<\/p>\n
Okay. So it\u2019s not like FEMA\u2019s coming in and people who don\u2019t have insurance are essentially getting recovery funds to completely replace the role of private insurance.<\/p>\n
Exactly. So it\u2019s like you have these pools of money. So you got the flood insurance money that we would encourage everyone to get. If you don\u2019t have flood insurance, we have individual assistance to help those types of folks. But again, reminding everyone that it\u2019s really there to just jumpstart your recovery. And then some other things we have while you\u2019re kind of trying to figure out what to do next, we have transitional sheltering assistance, which basically pays for you to stay in a hotel or a motel. And then we also have our housing mission, which is actually just being stood up now for a few counties where we will basically provide either a trailer or some type of other structure where you can live in while you\u2019re in the process of rebuilding your home or making those necessary repairs. Because the last thing we want is for people to have to stay in a home that is clearly uninhabitable.<\/p>\n
I\u2019d love to get back to that housing mission in just a minute. I think that\u2019ll be of particular interest to our listeners. But wanted to ask one more thing about insurance, because this seems to be a big issue, particularly in Florida. I was reading that in Florida a lot of insurance companies are leaving the state because it\u2019s becoming so expensive to insure there and that the state has actually stepped up and provided some reinsurance to some of the main providers. And I was just curious how FEMA reacts to that. Is that going to mean that FEMA\u2019s going to have to inject more money into states like Florida in the future because private insurance might be doing less?<\/p>\n
I think what that really means is that, to your point, climate change, rising sea levels, warmer oceans are going to be leading to more of these types of events. That is just the reality of the situation. And what that is going to end up doing is likely going to be higher premiums for some folks who are living in riskier areas. We\u2019ve implemented here at FEMA a new methodology for how we determine folks\u2019 premiums, called Risk Rating 2.0, which basically identifies the true risk of a property. So folks can start making those decisions because that\u2019s what it\u2019s going to come down to, just saying, is it worth the risk to live in an area like this? And that\u2019s what those types of tools will tell you. There\u2019s also other tools like the National Risk Index, which is a great tool that I would encourage anyone who\u2019s moving to a new area considering developing some new property, buying or renting a home, to check that out.
We also just recently announced a new tool with Argonne and AT&T called ClimRR, C-L-I-M-R-R, which is a cool tool that basically shows your future climate risk, mid to late century. So you can look not only what\u2019s your risk today, but you can look like, okay, what\u2019s this area going to look like in 20 years, 15 years? And those I think are important tools because especially when it comes to someone who\u2019s looking to build property or build a new home, you\u2019re not going to want to move to a place that could very well be underwater in 20 years. So these are some tools. As far as FEMA\u2019s concerned, we are going to continue to provide flood insurance to communities that are participating in the National Flood Insurance Program, whether or not there might be private insurers there.<\/p>\n
Got it. All right, that makes sense. Thank you. Thank you for explaining that. And then one last question about the insurance thing. I guess maybe it\u2019s not insurance. I read something about the 50% rule and that FEMA basically will only provide funds to help rebuild if the repair cost is less than 50% of the appraised value. Is that correct?<\/p>\n
Not exactly. Basically has to do with what local and state ordinances are saying. So basically a state and local government, you can\u2019t basically rebuild if your home is seen to be substantially damaged. So if the home is substantially damaged, they\u2019re not going to let you rebuild there unless you take certain actions to alleviate the risk in the future. So whether that means elevating a home, moving it out of a flood plane for example, but that is more of a state thing. And I\u2019d actually love to get you some more information on that because we have some more detailed information that I could share as well.<\/p>\n
Great. Yeah, that would be awesome. I obviously don\u2019t know that much about it when I was reading about it, when I was researching the show. And so if you do have any additional information about that, we can make sure to put it in the show notes for anyone listening, they can go and download that resource there.
So I\u2019d love to get back to something you mentioned, which is the housing mission, which is something I think our listeners will be particularly interested in. You mentioned it provides temporary housing for people affected by these hazards and natural disasters. Can you tell us a little bit more about how that works?<\/p>\n
Yeah. So there\u2019s two things that are going on. On the one hand, we\u2019ll offer things like rental assistance to people if they need help with that. We also have the Transitional Sheltering Assistance and that\u2019s like our hotel and motel program. And then we have our Direct Housing Mission. So we have that currently authorized for four counties in Florida. And basically, what that is, we determine that rental assistance is going to be insufficient to meet the needs of folks living in those counties. So there\u2019s a few things that we might provide. One is multi-family lease and repair where FEMA will enter into a lease agreement with the owner of a multi-family property and make repairs to provide housing for those applicants.
There\u2019s also basically they FEMA trailers. The technical name is a transportable temporary housing unit. That\u2019s where we\u2019ll basically bring an actual trailer to the property or adjacent property that\u2019s in a safer area and folks will basically live in there while they\u2019re either rebuilding or doing repairs for their homes. And that mission usually lasts about 18 months. And the only thing I would emphasize there is that these are temporary options. There\u2019s not meant to be long term solutions. There\u2019s other folks who are working in the space, like our friends over at Housing and Urban Development, who kind of have longer term housing solutions should you need housing beyond those 18 months. But that\u2019s, that short term to medium term solution while folks are trying to get their lives back together basically.<\/p>\n
Got it. Okay. So it sounds like your first priority is to provide rental assistance rather than housing. So what does that mean? They could get vouchers to lease an apartment while their home\u2019s being repaired?<\/p>\n
Yeah, basically. We\u2019ll basically provide them with some sort of funding to basically, let\u2019s say they can\u2019t save at their house, they need to go do some short term lease somewhere else, we\u2019ll provide rental assistance to them that way. The other way is the transitional sheltering assistance that I mentioned, which is they just go to a hotel that\u2019s participating. I believe we have them in Florida, Alabama, and Georgia, where they can go to basically stay in a hotel and we\u2019ll just pay the hotel directly for their stay there. And then if it looks like their road to recovery is going to be longer than that, that\u2019s when that Direct Housing Mission comes in where it\u2019s like, okay, the rental assistance or those transitional sheltering assistance is just insufficient to help this person, their needs are going to be a little bit longer. So then that\u2019s when the direct housing comes into play.<\/p>\n
And does that apply to both homeowners and renters?<\/p>\n
Yes, this all applies to both, besides rental assistance of course. But with homeowners there\u2019s also, like I mentioned, those SBA loans. But the direct housing transitional, it\u2019s really just about whether you\u2019re a renter or homeowner, is your home currently habitable? No? Then, these are where these programs come in.<\/p>\n
Okay, got it. If there are people listening to this, we have a lot of landlords on the show, people who own multi-family properties who want to offer this service or interested in working with FEMA on there, is that something they can do?<\/p>\n
I would suggest that anyone who has questions like that, call 1-800-621-3362. 1-800-621-3362. That is our basically individual assistance line that\u2019s in. That\u2019ll put you in touch with recovery folks. Frankly, I\u2019m not entirely sure what there might be for homeowners who want to help out on the rental side of things. But at the very least, if you\u2019re looking for that type of assistance, that\u2019s your best way to get it. Phone lines are open, got a bunch of people waiting. I\u2019ve been told that call times have decreased significantly since the beginning of this disaster. And then there\u2019s also disasterassistance.gov, which is somewhere we would encourage folks to check out.<\/p>\n
Thank you very much. That\u2019s super helpful. And is anyone eligible for these types of programs or just FEMA assistance in general? Is it just like anyone who needs it or are there criteria for who can get assistance?<\/p>\n
Yeah, so the primary criteria is are you living in an impacted county? So going back to your first question about what does FEMA do, how does this process kind of work, when there\u2019s a major disaster declaration, we will, at the request of the state, identify the counties that are impacted. So in Florida, I believe we\u2019re at 26 counties right now. That means anybody living in those counties is technically eligible for individual assistance. Now, the major caveats are legally we cannot duplicate benefits. So that means if you have an insurance claim and the insurance is going to pay to fix your home, you\u2019ll likely not qualify for individual assistance unless, this is a hypothetical, but let\u2019s say your insurance only covered for wind damage or something, you actually don\u2019t have flood insurance. Then the individual assistance might come in to fill some of those gaps.
And then the other part of it is through our policies, we\u2019re required also then to do home inspections. So if you\u2019re like, \u201cHey, my basement got badly flooded, it\u2019s causing some structural damage here, mold,\u201d et cetera, we will then, once you\u2019re in the process, send out a home inspector. Usually at your convenience, they kind of work that process out and they\u2019ll come in to basically just assess the damage. And that\u2019s all part of how we determine the amount of assistance that person\u2019s going to receive. So the short answer is yes, if you\u2019re in a eligible county, you are eligible for assistance. But then there\u2019s just those little caveats that I mentioned.<\/p>\n
Thank you for helping with that. This has been very helpful, understanding how you all react to disasters and hazards. You mentioned at the beginning of the show that part of FEMA\u2019s mission is also to help with prevention or with awareness. Can you tell us a little bit more about that?<\/p>\n
Yeah. There\u2019s basically a bunch of grants that we give out through our resilience directorate, which are basically to help communities harden themselves to extreme weather events. So our big pool of money is what\u2019s called hazard mitigation, our Hazard Mitigation grant program. And basically what that does is when there is a major disaster declaration, those communities are then eligible for hazard mitigation grants moving forward. So basically, it\u2019s like you get hit by a hurricane, now you can start applying through that disaster to get these hazard mitigation. So the next time you might be hit by a hurricane, it\u2019ll be lessened.
Two other areas that we have are flood mitigation assistance grants, which basically provide similar type of funding to make communities more resilient. And then we have the Building Resilient Infrastructure and Communities program, or what we like to call it around here, BRIC. And that is a program that has been a received increased funding from the president\u2019s bipartisan infrastructure law. That does the same thing. It\u2019s basically communities who want to build up resilience, apply for grant funding, we review their applications, and then we will basically provide them with funding depending on what they need to help just build up resilience there.
And what I really love about those two programs in particular is we\u2019ve have implemented new initiatives to basically get more money to underserved communities. So historically, communities that have been historically underserved, disadvantaged, vulnerable, have had a harder time accessing this type of money. And then ironically, or even maybe even expectedly in some ways, it\u2019s those communities who end up suffering the most when there are disasters. So this is kind of a way for us to say, okay, we want to make sure that everyone\u2019s able to have access to this money. So it\u2019s just making those programs more accessible.<\/p>\n
Got it. And you\u2019re saying the communities. Does that mean that it\u2019s state or local governments who are applying for these or do individual homeowners or renters have any option to access some of these funds?<\/p>\n
Depends on the program. So a lot of these though, are usually state and local communities are applying for the grants and then determining where that money is going to be spent. For example, there\u2019s a program that we have, which is effectively a flood buyout program. So if your home has been impacted basically repeatedly by a flooding event, the local community can basically determine what properties that they\u2019re just going to want to buy out. They\u2019ll just buy your home from you. And then FEMA will provide that money to the local and state community to carry out that program. And that instance, it\u2019s like the community slash the local government or the state government is the one driving the program, but it is to basically help individual households out.<\/p>\n
Okay, great. So if you are a homeowner or investor in these areas, sounds like the best that you could check with FEMA, but also check what your state and local governments are doing to build resilience and allocate some of these funds.<\/p>\n
Exactly.<\/p>\n
All right, great. Well, Jeremy, thank you so much for being here. Is there anything else you think our listeners should know about FEMA\u2019s mission or how they can build resilience against these types of hazards and disasters?<\/p>\n
Yeah, the one thing I would just like to say is preparedness, which I don\u2019t think we talked a bunch about, but it\u2019s, I think, arguably the most important thing that you can do when it comes to these disasters is just take steps to make sure you\u2019re prepared beforehand. We have a ton of resources available, low cost and no cost options to prepare. I want to tell your listeners to check out ready.gov or listo.gov, which is our Spanish version of the same website, that kind of has preparedness tips. We also recently relaunched our FEMA app, we revamped it\u2019s more accessible and it\u2019s got a couple cool tools that folks can use. And it\u2019s just as simple as plugging it in on your iPhone or your smartphone. And that will tell you not only local emergency alerts, but it will tell you where shelters might be located. It will tell you how to apply for disaster assistance if you\u2019re impacted. And it also has a lot of those preparedness resources.
And just on that note, coming off the pandemic, which a lot of people are moving to areas that they\u2019ve never lived before. We have a lot of people moving across the country, living in environments that they\u2019re not used to. So that\u2019s what really where the preparedness comes in. There\u2019s people living in places, they might have never gone through a hurricane. They might not have any experience with wildfires, which is where this preparedness stuff comes in. And the final thing I\u2019ll say on the preparedness piece is, don\u2019t get complacent. Just because, you didn\u2019t get hit\u2026 Folks in Tampa, this hurricane was originally supposed to hit Tampa. At the last minute, kind of shifted down, but it very well easily could have gone there.
Maybe next year they get hit. Maybe next year Miami\u2019s on it, or we see with things like Hurricane Ida, you\u2019re not even in the path of the storm and then you\u2019re suffering other things from the system, tornadoes and things like that. There\u2019s few places in the country where you\u2019re not going to have to deal with some sort of possible natural disaster. I used to say Upstate New York was the safest place to live, but then we just gave Buffalo a major disaster declaration for all the snowfall that they just got. So really, just don\u2019t take it for granted and do everything you can to prepare. Even if it does seem a little silly sometimes, you\u2019ll just like never know when you might actually need those skills and those resources.<\/p>\n
All right. Great. Well, thank you so much for joining us, Jeremy. We really appreciate you being here for this episode of On the Market.<\/p>\n
Thank you. I appreciate you having me.<\/p>\n
All right. Big thanks to Jeremy for joining us from FEMA. That was a really interesting interview. I am embarrassed to admit that I did not know very much about what FEMA does or how they provide help to communities and homeowners and investors previously, but learned a lot about that. We did pull together some stats just so you can understand of the scope of what\u2019s going on in Florida and what FEMA does. FEMA has, to date, provided $603 million to households and 322 million to the state of Florida for emergency responses and to help survivors jumpstart their recovery. It has made individual assistance available to 26 counties in Florida. And as of October 22nd, FEMA\u2019s National Flood Insurance Program has received more than 42,000 flood insurance claims. Wow, 42,000 claims. And paid more than 147 million to policy holders, including 103 million in advanced payments. So that\u2019s really interesting and good to hear.
And I think there are some main takeaways that I sort of wanted to just recap from the interview with Jeremy. First and foremost, as he said, part of their mission is to provide housing assistance, either in temporary housing or rental assistance or putting people up. So one, if you are personally affected, hopefully you\u2019re not, but if you are, you should seek out those assistance programs. But if you have a tenant, for example, or someone who is seeking housing, you should encourage them to seek out the state and government assistance. And if you have vacancies or open multi-families like they were talking about, perhaps you can come in and provide a service to the people who are affected and sounds like FEMA and the federal government will foot the bill there. So that could be a great win-win situation.
The other thing that I think that Jeremy hit on that I wanted to talk about was just preparedness and buying good insurance. So flood insurance, counter to what people often think, is not included in standard homeowner policy. And I really like what he said that anywhere could flood. So I mostly invest in Colorado, it\u2019s where I was living prior to moving to Amsterdam. And my home was actually in a flood plain. And if you know anything about Denver, it never rains there. But it\u2019s almost like because it never rains, when it does rain a lot, these huge flash floods come around and it could be really detrimental.
And so I really encourage you to look at the flood plains, flood information for your neighborhood and make sure that you are properly insured for anything that could happen. Because like you said, it\u2019s like one of those things, insurance, you never want it, but when the time comes and your number gets called and that happens, unfortunately, you\u2019re going to want the best insurance. So I\u2019m a big believer in buying good, high quality insurance and recommend that if you are an investor, homeowner of any type, you reevaluate your policy.
I also loved what he said, or I didn\u2019t love it, but whatever, I think it was a really important point, is that people are moving to new places where they don\u2019t have experience. Florida, for example, has seen this huge increase in population over the last couple years. And so there probably are a lot of people, maybe even if you owned a home in a different state or in a different city, are moving to a new place where you don\u2019t know, maybe you haven\u2019t lived through a hurricane and need to take some new consideration, make some new considerations about your insurance. So if you have moved to a new place, whether it\u2019s Florida, or like Jeremy said, Buffalo, New York, you should reevaluate some of the risks that exist in your area and make sure that your insurance policy has you adequately covered.
All right, well thank you all so much for joining me for this episode. This has been really interesting. I learned a lot from Jeremy. Hopefully this has helped you understand how housing markets and how insurance markets react to these types of disasters. Thank you so much for listening. We\u2019ll see you for next time for On The Market.
On the Market is created by me, Dave Meyer and Kailyn Bennett, produced by Kailyn Bennett, editing by Joel Esparza and Onyx Media, research by Pooja Jindal and a big thanks to the entire BiggerPockets team.
The content on the show, On the Market, are opinions only. All listeners should independently verify data points, opinions, and investment strategies.<\/p>\n