Capital Region businesses grapple with the impact of Baton Rouge’s worst natural disaster ever
It’s still too soon to put an exact dollar figure on the devastation caused by the historic flood of 2016, but the early estimates are staggering, as Business Report details in its new cover package.
More than 53,000 homes and 3,800 businesses in East Baton Rouge Parish alone were flooded, officials say. As many as 80% of all properties in Livingston Parish were affected. Across the region, more than 100,000 individuals have applied for disaster assistance.
The total economic impact will be somewhere in the many billions of dollars. Though experts cannot say how many billions, they’re already calling it the worst natural disaster in the U.S. since Superstorm Sandy in 2012.
Full recovery will take at least a year, maybe more, according to LSU Economist Jim Richardson. The challenges are staggering. At least 70,000 families are without a home, which has already led to a housing shortage and a workforce crisis for local companies. Where will everyone live while they determine whether they can afford to rebuild?
For small businesses, the flood was particularly devastating. The area’s major retail centers and large employers were largely spared, and the national retailers that were affected have the resources to rebuild quickly. Some big box stores have already reopened.
Independent retailers, on the other hand, don’t have many options. The majority of them don’t have flood insurance, and business interruption insurance excludes floods. Many mom-and-pop operators, particularly in hard-hit Livingston Parish, have lost everything—their shops, merchandise, employees and customers.
“I’m worried about where some of these people are going to go,” says Central Mayor Jr. Shelton, who estimates 90% of his town was affected. “You’ve got entire subdivisions that are decimated.”
Local governments will also take a hit. Those thousands of flooded properties will be reassessed in the coming weeks, their values diminished if not totaled. While that will mean lower property tax bills for flood victims, it will also have a direct impact on property tax collections early next year—and on the revenues they generate for schools, libraries, fire departments and other vital municipal services.
“The waves of challenges are going to be many,” says BRAC President and CEO Adam Knapp. “This is a disaster that affects all parts of the region and will affect at the state level as well.”
There will be winners in the aftermath of this flood. Companies, both locally and from out of state, that have been able to meet the demand for cleaning and building supplies will thrive, as will the retailers that have been able to reopen quickly. Home sales will boom in areas that didn’t flood. The feared glut of units in the multifamily sector has already evaporated, and demand exists for still more apartments. Contractors and their subs will be busy rebuilding for months to come.
“In the short term it will be really bad,” says LSU Economist Loren Scott. “But then you are going to see a lot of spending as recovery dollars come into the area.”
Long term, however, the impact is unclear, and much will depend on what kind of temporary housing assistance becomes available and how much recovery aid the state’s congressional delegation can wrangle out of the federal government.
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