September 11, 2018

Protocols, Preparation and Mitigation are Key to Disaster Recovery and Resilience 

Flooded houses after a hurricane

How can housing owners, operators and investors cope with the consequences of wildfires, hurricanes and other natural disasters?  

That question sparked a robust conversation earlier this summer during the annual conference of the National Council of State Housing Agencies (NCSHA) in Chicago. Joining me for the panel discussion were fellow housing professionals Jen Brewerton of Dominium, H. Blair Kincer of Novagradac & Company, Nancy Muller of the Florida Housing Finance Corporation, and Alan Quick of the Illinois Housing Development Authority.  

Our dialogue generated a clear, urgent takeaway: Property owners in areas vulnerable to natural disasters should have an emergency plan in place to mitigate the risks to residents and their homes.  Protocols can go a long way toward reducing the impact on property and assets as well as managing the expectations of financial sponsors.  

Enterprise works with partners around the nation to increase the resilience of affordable housing before and after natural disasters. Learn more about our Ready to Respond toolkit to see how you can prepare and protect your community. 

Here are some of the main challenges facing housing owners and investors after an emergency – along with some possible solutions.  

Regaining tax-credit compliance after a disaster is difficult.

After an event, many residents leave their homes and don’t return. When housing that has sustained damage from natural hazards cannot be rented out for an extended period, the developer or owner is at risk of non-compliance and significant financial exposure. 

Some Housing Finance Authorities have taken innovative steps to support post-disaster housing recovery. In Florida, for example, officials revised their Qualified Allocation Plan to allow housing operators to re-allocate dollars for repair and recovery.   

Local contractors are hard to come by after a disaster.

And sometimes they raise their prices, leaving housing owners unable to resume operations. Contractors coming in from other jurisdictions don’t always understand local code or procurement – which can lead to delays.  

Low reserves can lead to slower mobilization and repair.

In other cases, housing owners and operators often must forego repairs due to low reserves, causing additional damage. Waiting too long to start repairs after a disaster can create larger, more costly issues – including wet walls that turn moldy and require environmental remediation. 

Emergency guidelines help reduce confusion around lining up contractors’ contracts and ensure housing owners and operators manage investors’ expectations around recovery. Advance planning should include keeping emergency reserves, plus checking with your insurance provider to identify what kind of property damage is covered – as well as verifying deductibles.    

Residents’ incomes tend to decline after a disaster.

Because businesses and other institutional businesses often close after a disaster, unemployment spikes, leaving residents who are dependent on the retail and services sector for jobs unable to pay rent or cover the cost of critical services. Recovery jobs, which can require advanced training, aren’t always available to local residents, leading to additional loss of opportunity. 

Community assets decline.

The value of homes also can decline. Vacancy spikes due to evacuation and displacement can depress the housing market, translating into lower home values and reduced household assets.  

Natural disasters can devastate communities. But mitigation can go a long way toward helping housing owners, operators and residents navigate recovery and rebuilding efforts.