October 20, 2022
“The Perfect Storm is a book written by Sebastian Junger. The book is about the 1991 Perfect Storm that hit North America between October 28 and November 4, 1991, and features the crew of the fishing boat Andrea Gail, from Gloucester, Massachusetts, who were lost at sea during severe conditions. The Perfect Storm was a nor’easter that absorbed Hurricane Grace. There is a movie by the same name. The hurricane that hit Florida, Hurricane Ian, could be considered a perfect storm for very different reasons.
Hurricane Ian is a case study in I’ll-considered and short-sighted local, state and federal policies. The devastation was the result an intersection of bad policies involving economics, taxes, climate science, politics, and real estate development that led to an historically expensive disaster. The ramifications will be felt for years.
At its heart is the denial of climate change despite all of the warning signs. In the face of rising sea levels, dangerously low water levels, increasing temperatures, falling high rises, degradation of The Everglades, and previous catastrophic hurricanes, people keep moving to Florida’s coasts. It’s as if they are playing a game of Russian Roulette, betting that it won’t happen to them. Inevitably, the bullet gets loaded in the chamber, and the gun goes off.
Construction is the lifeblood of Florida. 40% of Florida’s economy depends on construction. Construction growth couldn’t be stopped even if someone wanted to, and nobody does. Retirees keep moving down for the cheap housing and the weather. 845 people per day move to Florida. Tourists keep coming to Disney World and other theme parks. New homes and hotels by the thousands are being built as far as the eye can see.
Florida’s tax policy encourages people to move to the Sunshine State. Florida has no state income or estate taxes, which is a powerful incentive to get people to relocate. Throw in affordable housing, and you have a population explosion of epic proportions. Florida needs people to settle on the coasts to keep its economy going. It needs to grow its tax base through property taxes, and property taxes are the highest for beachfront properties.
Homeowners insurance is the lynchpin of the real estate market. Without it, the market evaporates. A patch work of private and public insurance has made it possible for people to build and live where they shouldn’t. However, this may be coming to an end as reinsurers question their commitment to the market, and primary insurers vacate the market. Many homeowners do not have adequate insurance, and many have lost everything. Ironically, it may fall upon the taxpayers to bail out home owners, which gets to the politics of the matter.
Good construction is good politics in Florida. Regardless of the extent of the damage on the west coast, no governor is going to turn his back on the construction industry and the political contributions that come with it. Florida is still saying “come on down.” They will probably look at strengthening construction codes and building bigger and better seawalls in hopes of delaying the inevitable. It gives “build the wall” a whole new meaning. Addressing the root causes of climate change will be politically perilous. Florida will not adapt in any meaningful fashion. It will just keep building, writing checks, and hope no one notices.