The cost of Harvey recovery will be staggering, lawmakers learn
By John C Mortiz October 2, 2017, USA Today
HOUSTON — Texas is facing a critical shortage of manufactured housing and the cost of even the most basic units to temporarily house the thousands of Texans displaced by Harvey can cost as much as $140,000, Land Commissioner George P. Bush told a legislative panel on Monday.
“It is almost becoming as expensive to get a manufactured house as it is to build a home,” Bush told the House Urban Affairs Committee at special hearing at the University of Houston.
The Urban Affairs panel and the House Appropriations Committee held hearings in nearby ballrooms at a hotel on campus to get an assessment on what is being done and how much it might cost to rebuild the Texas Coast after the worst natural disaster to strike the region in memory.
Bush, a first-term Republican, was tapped by Gov. Greg Abbott to coordinate the state-federal response aimed at meeting the immediate need for housing. The land office is acting as the liaison between local officials and the Federal Emergency Management Administration to determine how best to either get people back into their homes or into alternative accommodations. The bottom line, Bush said, is that it could take from seven months to two-and-a-half years to get people permanently situated.
Meanwhile, the Land Commission has established a website, TexasRebuilds.com, to guide affected Texans through the process. The housing need has been divided into five categories: Multi-family lease and repair; direct leasing, manufactured housing options and partial repair to make homes at least livable in the short run.
Bush said his agency is working with the manufactured housing industry to ramp up production to meet demand. In a brief interview presenting his testimony, Bush told the USA Today Network that companies have told him that each can only build about 10 units per month, and that the challenge is multiplied because of a shortage of both materials and labor.
“A lot of people are going to make a lot of money in manufactured housing,” he said.
The units, he said, are typically about 430 square feet with one or two bedrooms and a kitchen.
State Rep. Jarvis Johnson, a Houston Democrat who serves on the Urban Affairs panel, said after the hearing that industry “is making a killing” off the housing crisis that followed in the Harvey’s wake.
“What they are building is the size of a garage,” Johnson said.
D.J. Pendleton, executive director of the Texas Manufactured Housing Association, said the costs are also driven up because FEMA sets higher standards for units that qualify under the federal program.
“The FEMA units are built to specs that go far beyond what you’d get for a typical retail unit,” said Pendleton, whose organization lobbies on behalf of the industry.For instance, he said, the units must be accessible for people with disabilities and must be rated for extreme weather even if they are not located in areas prone to severe weather.
Houston Mayor Sylvester Turner, a former member of the Texas House, told the Appropriations Committee that the cost of coping with Harvey’s destruction will be stratospheric. He said 27 trillion of gallons of rain fell on Houston and surrounding communities in a matter of hours after the storm that crashed the Coastal Bend with Category 4 winds turned northeast up the Gulf Coast. The cost of hauling away the mountains of debris from thousands of flooded homes and businesses will reach $260 million.
Fortunately, he added, the federal government will pick up 90 percent of the tab. The cost of rebuilding the government-owned buildings in the Houston area will reach about $175 million, Turner said. The city of Houston’s insurance tops out at $100 million, he added.
Officials have yet to make an official estimate of the cost to widen the bayous that overflowed their banks so that future flooding might be contained, Turner said. And compounding all of that, he added, was that the city simply did not have the equipment, manpower and training even before the storm hit.
“You cannot operate (city government) lean and mean” during catastrophic weather, Turner said.
The committees took no formal action but will likely make recommendations to be considered during the 2019 legislative session. Appropriations Committee Chairman John Zerwas said his panel will hold a hearing in the Corpus Christi area for a firsthand look at Harvey’s destruction in the Coastal Bend.
While most building materials prices will likely increase in the wake of hurricanes Harvey and Irma, the price for gypsum might be the first to ascend as a result of the storms.
Last month, prices for gypsum products — drywall being a major one — fell for the first time in three months. But as NAHB economist David Logan noted in a recent Eye on Housingblog post, remodeling projects will be the first feasible construction efforts for much of Texas and Florida. This promises to drive up demand for drywall and cause prices to climb before those of other building materials.
For example, demand for framing lumber and concrete will rise later on because larger-scale, structural rebuilding projects usually take longer to get underway.
Unfortunately, builders have become all too familiar with the recurrent price increases for softwood lumber. A brief reprieve in June was the only month thus far in 2017 in which lumber prices recorded a drop (3%). But overall, prices have increased 22% since the start of 2017.
Go to Eye On Housing to read a more detailed assessment.