NAPLES, Fla. – People still want to live here, Hurricane Ian be damned.
Yes, jobs, housing and recreation might be a challenge for awhile, but in the end, the belief among many is that Southwest Florida will figure out a way through perhaps the most difficult dark days it’s ever had.
“After newly pended sales fell sharply during and in the days just following the storm, the rate of newly pended sales has increased each day,” said Mike Dodge, director of education and market research for John R. Wood Christie’s International Real Estate. “As of Oct. 5, one week after landfall, sales were back to 58% of their pre-storm pace. That’s for all of Collier and Lee areas from Marco up to Cape Coral.”
Don’t count Dodge among those taken aback.
“Generally speaking, after a period of slower-than-usual sales, real estate markets usually tend to come back at a surprising rate after a hurricane passes. This proved to be the case with Irma in 2017 when newly pended sales were down 90% just following the storm, then were back to their normal pace just five weeks later,” he said. “The rate at which sales will recover will vary by specific geographical area, largely depending on their level of impact.”
But even after some of America’s biggest tropical cyclones with historic levels of surge, the rebound was there, Dodge said.
“After Hurricane Katrina in 2005, sales in the metro New Orleans market fell noticeably for about a month’s time before they returned to, and even exceeded, their prior pace,” Dodge said. “More recently, after Hurricane Harvey in 2017, a similar trend held true for the Houston metro area.”
New deals were still being recorded at the Lee County Clerk of Courts, according to real estate researcher Paige Rausch of Aslan Realty Advisors.
Among them: The 52-unit Riverwalk Apartment Homes just east of downtown Fort Myers selling for $10.1 million after originally going for $6 million in 2019.
Affordable housing hard to find
The major obstacle, though, might be finding the right price for an abode in a competitive market, with close to 20,000 Lee and more than 2,500 Collier domiciles wiped out or close to it so far in the ongoing surveying.
“There was a shortage of affordable housing before Ian,” said Becky Lucas, CEO for the 40-year-old Habitat for Humanity of Lee and Hendry Counties. “Now, with the massive devastation, the problem will be exasperated beyond comprehension. At Habitat, we are gathering our resources and assessing our options as quickly as possible.”
Habitat data has found that some had already been spending 50% of their monthly income to pay for their pads. And many of those who lived in the Harlem Heights neighborhood, for example, worked on Sanibel, Fort Myers and other areas, that like their homes, were inundated with the surge.
Hurricane Ian didn’t just batter dwellings and more than 7,000 businesses in Southwest Florida. It displaced residents, such as those in River Park, a historically black, low-income Naples community.
“There are people out here who need help,” said Vincent Keeys, president of the Collier NAACP.
As an attempted short-term solution, the city set up a relief fund, allowing it to accept outside funds, and City Manager Jay Boodheshwar vowed to “get people protected.”
Keeys said more attention will be needed.
“Many of the service workers are without shelter,” said Stan Stouder, vice chair of Lee County’s Local Planning Agency. “The most affordable housing were mobile homes, and most of the mobile homes got trashed. (A) lot of people that lived in Iona, there’s thousands of trailers down there that are no longer habitable.
“Where are they going to go, and how are these restaurants, and how are the users and service workers going to reopen if they don’t have shelter?”
A combination of events might end up “turning the housing crisis into housing chaos,” said Steve Rye, CEO of Cape Coral’s Mercola Market. “There’s been a lot of displacement. We already have a housing crisis here.”
‘Influx of temporary housing’
Stouder, CRE Consultants founding partner, expects a repeat of what occurred in 2004’s Hurricane Charley’s aftermath in Punta Gorda, but perhaps at a larger scale.
“I think there’s going to be an influx of temporary housing, much as there was with Charley by the Punta Gorda Airport,” he said. “FEMA – they’re going to start creating some place for these people to shelter while more permanent shelter options are put in place.
“As far as affordability, those interim shelters are, I think, the short-term solution, and the long-term solution is we begin to build with more efficient and expedient methods than stick, that kind of stuff.”
Collier County Commission Chairman Bill McDaniel agrees on the need for Federal Emergency Management Agency temporary housing.
“It would certainly help, just to help some of the more financially dependent residents,” said McDaniel, who added he’s aware of FEMA consideration of a “housing mission” in Lee but not in Collier at this point.
But nearly three weeks after Ian’s blow, the state continued to delay such assistance from President Biden and FEMA, as it says it’s working on its own plan although no specific timetable has been offered. That was confirmed at a Collier town hall this week.
“An answer hasn’t been landed on yet,” said Sam Harvey, an individual assistance group supervisor for FEMA, as the newly homeless sleep in their cars or on front porches.
Just fixing damage alone will be challenging enough for Southwest Florida. Lee’s Habitat, for example, assisted 109 families with repairs after Irma, but after Ian’s cataclysmic strike, it’s uncharted territory as for what needs may come, and assessments are continuing.
With the devastation so enormous, so life-changing, some of the types of places service employees worked have no plans to reopen, such as the Cottages of Paradise Point vacation rentals on the north end of Fort Myers Beach. Dennis Greenspon, who operated the vacation rental establishment for two decades, made the decision within days of the devastation:
“It has been destroyed. Fort Myers Beach (has) no power, no internet, no water, no utilities. (Many) people have died,” Greenspon said before water and a little electricity began returning to the island, which now has a trailered government center next to its crumbled Town Hall. “We will not be rebuilding. Cottages of Paradise Point is now a beautiful, cherished memory.”
Jason Crosser, who owns 8-Bit Hall of Fame, a classic video game store on Bonita Beach Road less than a mile from the Gulf of Mexico, lost everything.
“We don’t know what to do first,” said the married Crosser, a former history instructor who has lived in the region for 16 years. “I might go back to Iowa and teach.”
Southwest Florida lodging workers like Mitch Stough and his brother say they have no choice but to relocate.
“There’s nothing here for us. Our jobs are gone. Our car’s gone. There’s nothing open,” said Stough, who worked on Fort Myers Beach. “It’s going to take a couple years to get this thing back into shape again.”
Those kinds of departures worry companies, said Robbie Roepstorff, president of Edison National Bank and Matlacha’s Bank of the Islands, who has “spoken with a lot of small businesses (wanting) to make payroll.”
“They’re scared and concerned to death about it,” Roepstorff said. “They’ve got good people. They were affected in their place of where they rent. They now don’t have a job. They’re going to leave us if we don’t get them on a good payroll. (There are) just ways to do this that I think we can all get creative on.”
‘An entirely different landscape’
Stouder, who moved from Fort Myers Beach a year ago on Oct. 5 to an Iona high-rise, said it is difficult to see what happened to his long-time oasis and the pain its inhabitants are suffering.
“Old Florida is gone. We’re going to see an entirely different landscape,” he said. “Sadly, the cracker shacks, the fishing shacks and all those old things are nostalgic, but all that stuff is going to be replaced by things that are going to be built to different building standards. And the stuff that’s standing out there is stuff that was built in large part after 2005. I think the sad part is the charm will be supplanted by the newer stuff.”
However, getting Southwest Florida healthy again will end up creating different kinds of job opportunities, Stouder said.
“I think the absence of tourism revenue will be backfilled by construction revenue. I think the pie will stay the same. It’ll just have different ingredients,” he said. “The demand for any of the trades, any of the permitting professionals is bottomless. I think it’ll be endless. (The) demand is going to be so great.”
But won’t folks who hustled down here from the Northeast and other spots during the pandemic and bought up the place now make a U-turn back to where they came from after the shock of Ian’s brutal force?
“I believe that Hurricane Sandy is the balance,” Stouder said, noting that many areas have the potential for natural disasters. “I mean, they lived in New Jersey and New York, and Sandy was a monster. (They) are going to face it again if you’re on the coast no matter where you are. So all the drivers that brought people here are still bringing people here.”
Now there might be an additional draw: Those jobs of restoring or replacing places that could lead to cultivating local talent and bringing fresh expertise from across the country and around the globe.
“The Great Recession vacuumed all of those skills out of our market,” Stouder said. “All that plumbing, electrical, mechanical, all that stuff is going to be just very lucrative I would think for the next five years in this market in Southwest Florida. (If) I had a high school-aged child that had no interest in a college-track, I think people in the trades are going to be making $150,000, $200,000 a year for the foreseeable future.”
With technology improving by the day, how we build in the future will play a role in that, and it’s with mostly green-friendly materials that have higher thermal resistance and can “take tremendously stronger wind load, like up to 200 mph wind loads,” he said.
“The construction methods are going to change,” Stouder said. “I believe we’re going to start seeing the implementation of SIPs, like structurally insulated panels. (SIPs) can be built in a third of the time. (We) are going to start seeing the implementation of insulated concrete forms – ICF. Basically, insulated concrete forms is where they take essentially LEGO-looking things that are made out of Styrofoam, and then pour those cells with concrete.”
‘Enormous income tax benefits’
The right kinds of results are going to win the day.
“I think anybody in the masonry-related business is going to just crush because I don’t see build-back being pretty much anything but masonry,” Stouder said. “Whatever goes into making concrete, block fabrication, concrete plants – I mean forget the infrastructure – just the rebuild I think is going to be highly driven by masonry products. So people in that industry are going to thrive.”
The door has opened more now thanks to the available loans, Stouder said.
“With the federally underwritten interest rates, I don’t think interest rates will be as big of a headwind against commercial real estate,” he said. “I think these government-augmented interest rates, SBA, that kind of stuff, I think that will actually facilitate and enable commercial construction more so than if those lower interest rate hazard-related loans weren’t available.”
Tax benefits will also provide a boost, said Matt Simmons, managing partner at Maxwell, Hendry & Simmons.
“This is a really big deal,” Simmons said. “It’s critical for areas like Sanibel, Captiva, Fort Myers Beach and Pine Island. There are enormous federal income tax benefits that are going to be available to so many people.”
Google IRS Publication 547 to get the many details.
Up to $1 billion to reopen
Still, a big reason newcomers migrate to the region, is for its sand and shores, much of which are not in shape at all for visitors after Ian’s pulverization. Authorities haven’t been allowing access anyway to multiple locations, and in some cases even blocking relief agencies from aiding coastal survivors.
It may take up to two years to get state parks back in shape. But while tourism will take a major hit, it’s certainly not the end of the road for the industry. Entities like Margaritaville still plan to continue its construction on Fort Myers Beach, which lost a lot of its older lodgings, Stouder said.
“I think Margaritaville is going to have a windfall. Them and Pink Shell are the only game in town, I think. If anything, this is a prime opportunity for Margaritaville to expand and to receive even greater capacity,” Stouder said “They have a great opportunity to be a service provider and an answer to the interim tourism while these other facilities make it through permitting and ultimately construction. I think the area will bounce back strong.”
In a statement, Margaritaville said a top priority was assisting the town, islanders and merchants of “the area, the future home of Margaritaville Beach Resort Fort Myers Beach. At this time, we are working with our partners and local authorities to assess the impact on our development. We are committed to being part of the recovery of this beautiful destination.”
The storied South Seas Resort, which takes up the northern four miles of Captiva or “a third of the island,” also wants to rebuild, said Greg Spencer, CEO of Timbers Resort, owners that purchased the complex last year.
“Ironically, our one-year anniversary was the day the storm hit,” Spencer said. “We estimate it’s going to be anywhere from $800 million to a billion to not only rebuild the property but to build it back to what the (current) standards are. We’re prepared to do that.”
But there are challenges.
“Lenders have almost zero appetite for investing, funding projects in a hurricane zone,” Spencer said. ““That’s something that’s going to be key for us.”
For a few local banks, just getting the doors unlatched again is first on the list, said Roepstorff, a Sanibel resident who has an Edison branch near her home.
“The good news is all the banks in the Fort Myers market have a bank to service their customers. (On) Sanibel, unfortunately not. I’ve spoken with the two big banks, Chase and Well Fargo. They really haven’t been able to assess their situation,” Roepstorff said.
The Sanibel-Captiva “community bank is actually doing some business in the parking lot because customers need to get into their safe deposit boxes. He had minimal damage compared to our damage, and I just cannot from a liability standpoint let anyone in until such time as it’s safe.” she said.
Local government is vital in the recovery, Stouder said.
“I think one of the bigger issues that’s going to face the market is the backlog in permitting. The government agencies aren’t staffed for the avalanche of permitting,” he said. “I think the smart leadership is to start aligning off-site permitting resources to process these permits as quickly as possible. I think that’s a real estate entanglement that could be a problem.”
Cape Coral is one that took a step toward addressing the potential hurdles.
To expedite, the city is temporarily waiving permit fees and opened a pair of emergency permitting locations at Cape Coral City Hall and the Cape Coral Art Center. It will be open every day except Sunday.
Based at the Naples Daily News, columnist Phil Fernandez writes In the Know as part of the USA TODAY NETWORK, which supplemented this report with efforts by Laura Layden, Liz Freeman, Kate Cimini and Dan Glaun.
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