Sunday, January 25, 2009

Galveston's Recovery

We've been making visits to Galveston Island for over 25 years and have owned property there for around 10 years. Part of my heart is there, so I have been following the news carefully about the aftermath of Hurricane Ike. One of the frustrating things to me is the timing of Ike. The national news media covered the landfall and immediate aftermath. But the more urgent news of the financial crisis in the credit markets swept the national consciousness quickly to other news with more national repercussions. The sad thing is that Hurricane Ike did not just do tremendous damage in Galveston and Point Bolivar, it affected an entire region along Galveston Bay. For people living inland, it took 3 weeks or so, but life got back to "normal," but for those living near the waterfront areas along the coast and bay, life is still far from normal.

I was so pleased and proud of our state in the initial stages. Help came to Galveston quickly, very quickly. There was a virtual army of people bringing ice, water, food, military and police making rescues and maintaining order, government people trying to get people settled in some kind of temporary housing with money for immediate needs, and charitable organizations providing much needed assistance.

It has now been four months since Ike hit. The reality of how long it is going to take for the area to recover financially, to rebuild the damaged properties, to demolish and restore the beaches where the houses can not be rebuilt is sobering. It has been three years since Katrina. We visited coastal Mississippi last February. The road at Biloxi that runs along the beach is empty of all but a few houses. Entire neighborhoods in the few blocks near the beach are gone. The buildings have been demolished, the debris piles gone, but very little reconstruction has occurred. Cynically speaking, the casinos are rebuilt and up and running, but the neighborhoods around them have not returned.

Galveston is not only a resort, vacation destination, but it was also a vibrant community populated with people from all walks of life. While the costs of living on the island were pushing middle class families to the mainland, there was still great diversity of income levels on the island. Galveston is a historic city, many residents, both rich and poor, are multi generational islanders with deep roots. They want to restore or rebuild their homes. But the road right now is rocky and filled with obstacles.

I know that there is money being channeled to help not only Galveston families and businesses, but also the other areas - Point Bolivar, San Leon, Texas City, etc. Insurance payments and FEMA have certainly paid out a lot of money. This article from the
Galveston Daily News gives an interesting look at where some of this allocated money goes. On one level, it really makes sense. There is $814 million in federal funding that is being distributed to help the region. There is also $1.3 billion in Community Block Grants. The regional governments have been hard hit in providing services and repairing infrastructure. Their tax bases have been tremendously impacted and future revenues will be much less for a long time.

There are three ways that this money must be split: restoration of infrastructure, housing, and economic development. There is a lot of FEMA money still going to pay for temporary housing. Obviously the sooner you can get people into "real and permanent housing" the money can be more efficiently spent. Economic development is important as well, because area business have been devastated as well. People need jobs not only to pay for their housing, but also to feed their families. The good news is that businesses are reopening in the area. But some major employers are facing obstacles that seem insurmountable. Galveston had a world class medical school and medical center. The Shriners had an important children's burn center. Both hospitals were damaged by the flood waters of the storm surge. The UT medical center has already laid off workers and is downsizing. The Shriners were in the process of repair and reconstruction, but have been forced to halt and lay off workers due to investment losses in the national endowment funds. The HEB grocery store in Galveston will not reopen. The Dillard's in the mall off I-45 will not reopen.

The article above does a good job showing how hard it is to get money into the hands of the families that really need it to rebuild. In rebuiding Galveston in 1900, there was a lot of private money spent to assist the recovery efforts. With the crash of the financial and equity markets, it is going to be harder to get that private money flowing this time.

As I watch this process, I'm realizing what a long term project this is going to be. I'm wondering how long it will take before all the debris through Galveston and Chalmers county is dealt with, how long before all of the people displaced by Ike will be in permanent housing, how many will return to live in Galveston, how many will permanently relocate. I remember the great San Francisco earthquake in 1989. In checking Wikepedia it took 8 years to rebuild the freeway bridges that were damaged. I don't know how long it took to rebuild and repair all of the buildings that were damaged. At the time I had never been to San Francisco, so after the major news of the earthquake, the rescues of people caught in the bridge collapses, etc, it fell off my radar. I know that today, San Francisco has rebuilt. The reconstruction was all done to current earthquake construction codes.

Thinking about how San Francisco, so far from me in Central Texas, fell off my radar, I suspect that the Texas Gulf Coast has fallen off our nation's radar. Like San Francisco, the reconstruction is going to have to meet hurricane construction codes. Some houses will have to be elevated. Some will be bought out. But for houses behind the seawall, buyouts don't seem practical. Any homes that are bought out become public land forever. I don't quite see Galveston island becoming an uninhabited island like Padre Island National Seashore. But the population is going to be smaller for a long time. Before Ike about 57,000 people lived on the island. The estimate is that now it is 40,000 - almost a third have not returned. Even with large sums of money being allocated, rebuilding is going to take a long time.

Let's hope the tourists do come to the island and the other coastal areas during spring break and this summer. That tourist money will go a long way toward helping the area rebuild.

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