HOUSTON—In the days since Harvey dumped massive amounts of water onto Houston's terrain, organizations of every stripe and size have come together to contribute to this effort. In addition to the usual organizations such as the Red Cross and food banks, a Hurricane Harvey Relief Fund has been set up by the city for donor contributions, the Texas Diaper Bank is accepting baby items such as wipes and diapers, and other efforts are underway.
One of the organizations was Lee & Associates, which set out to help in a small way, with a target of raising $25,000. In less than six hours, the company reached that goal and then some, to the tune of nearly $70,000 at last count. The company set up a GoFundMe account to disperse money in the Houston neighborhoods that needed the most help with sheetrock, gloves, shovels, wheelbarrows and other items. The Lee & Associates─Houston office served as a central command center and boots on the ground facilitator as it went into staging mode with corporate housing, commercial space, containers, rental cars and any other resources needed.
“We went into it knowing that as the water was let out of the reservoirs, people had to get rescued and would need places to stay, rental cars and clothing for kids. We needed it quickly, within a few hours. The only thing faster than the water was the money pouring in as people emptied their piggybanks,” Michael Spears, president of the Lee & Associates─Houston office tells GlobeSt.com. “Houston is the biggest small town on the planet. We come together, no matter what race, man or woman, we stick together in this type of situation. We are going to build this thing back. We will come out stronger. The challenge that we are going to have moving forward, once the news cycle winds down, is this problem will be around for a while. Support will be needed in the months ahead as we rebuild and people need to get back on their feet.”
As Spears indicated, funds will be desperately needed as time goes on. CoStar Group Inc. assessed the potential impact Hurricane Harvey may have on the Houston commercial real estate market–multifamily, office, retail and industrial buildings–and found that 27% of the gross leasable area may be flooded. This represents $55 billion in property value. More importantly, some 72,000 apartment units sit within the 100-year floodplain and are likely to be flooded.
“Unfortunately, the number of displaced residents could be far larger than current media reports indicate,” said CoStar Group founder and chief executive officer Andrew Florance. “Our property-by-property review of the apartment buildings in the floodplain reveals an out-sized share are low-to- moderate-income households, including those in Southwest Houston where the bayous have overflowed.”
In total, there are 12,000 properties with 400 million square feet of space that fall within the 500-year floodplain. Only 9 million square feet of space, including 4,000 apartments are within a designated floodway and most were likely inundated with floodwaters. However, 175 million square feet located in the 100-year floodplain, including 72,000 apartment units and 20 million square feet of office space, are likely to have water incursion. Another 225 million square feet sits in the 500-year floodplain with some risk of flooding.
“Of the $55 billion at risk, $16 billion are apartment buildings in the 100-year floodplain,” said Florance. “As soon as CoStar is allowed, we plan to do an air survey to assess the damage.”
The submarket that will be most affected is likely to be Southwest Houston. This highly dense section of Houston is home to more than 66,000 apartment units, of which nearly 30% are estimated to be impacted. Within Southwest Houston, the Braeburn, Greater Fondren and Sharpstown neighborhoods have the highest number of units in the 100-year floodplain. Each of these neighborhoods borders Brays Bayou, one of the riverways that snakes through Southwest Houston and has overflowed because of the torrential rain.
An additional 5 million square feet of space is under construction within the floodplain, including 3,144 apartment units. This represents about one-fifth of the 25 million square feet of commercial real estate under construction in Houston (which includes more than 12,000 apartment units). Most of the apartment buildings (1,170 units) under construction within the 100-year floodplain are concentrated near the Medical Center. The most impacted office submarket is Greenspoint, which has greater vacancies after the departure of Exxon Mobil in late 2015. Here, some 3.5 million square feet falls within the 100-year floodplain.
Regarding flood insurance for these damaged properties, the Houston Office of Emergency Management reports that flood victims are receiving robo-calls indicating that flood insurance premiums are past due and in order to have coverage for Hurricane Harvey, payments must be submitted to a website, GlobeSt.com learns.
The city office warns that insurance companies and agents do not use this process to communicate with customers about flood insurance policies. In fact, if a payment is past due, an insurance company will notify the policyholder by mail 30, 60 and 90 days before the policy expires.
Property owners who receive this type of call regarding flood insurance should press disconnect rather than any numbers to speak to a live operator or to take a phone number off the list. Then, immediately contact the insurance company or agent associated with a property policy to verify the information.
Alternatively, 800-638-6620 can be dialed for policies with the National Flood Insurance Program Direct.
Visit FEMA for information on how to file an flood insurance claim.
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Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
