Dive Brief:
- As Houston officials go through the annual process of updating the city's five-year Capital Improvement Plan (CIP), they have put a hold on a variety of public construction projects in order to fund post-Hurricane Harvey reconstruction efforts, according to the Houston Chronicle.
- Work on street replacements, fire stations, libraries, community centers, utility infrastructure and other public assets will have to wait for years in order for Houston to meet its post-Harvey financial obligations. The Federal Emergency Management Agency (FEMA) requires cities to pay only 10% of disaster damage, but Houston must fund the full amount of repairs while waiting for FEMA reimbursement.
- For the time being, no new projects will be added to the CIP, but certain projects underway will be allowed to continue. Houston officials expect to be caught up with Harvey reconstruction in five years. The Houston City Council will vote on the CIP in May or June.
Dive Insight:
At the beginning of the Hurricane Harvey recovery effort, local Houston builders were also predicting extended customer wait times for repairs.
Hurricane Harvey was just one of what seemed like an endless string of natural disasters impacting the U.S. last year and early this year. Munich RE announced in January that disaster losses around the globe in 2017 totaled $330 billion, although only $135 billion of the costs were insured. And the U.S. share of those losses was huge.
Hurricanes Harvey, Irma and Maria, all of which caused total losses of $215 billion, secured 2017's place as the most expensive hurricane season on record. In addition, the U.S. share of global disaster losses was 50% versus the typical 32%. In Puerto Rico, power still has yet to be restored to some parts of the island, so those expenses are ongoing.
At the end of last year, wildfires erupted in California, and combined claims, according to the Insurance Journal, could reach as high as $12 billion.
In an effort to reduce the costs of future hurricanes and flooding, Houston and Harris County, where the city is located, have proposed resiliency measures. In January, Houston Mayor Sylvester Turner said all new buildings within city limits bust outside of Houston's floodplain should be built two feet above the ground. He also proposed that those structures within the 500-year floodplain should be built two feet above expected flood levels. Starting Jan. 1 in Harris County, most new homes and certain other types of structures must be built to a 500-year floodplain standard if they are within a 100-year floodplain.
