Howard Roark would be proud

From the Wall Street Journal, a story that could come right out of Ayn Rand’s The Fountainhead:

…tens of thousands of people who lost their homes in Hurricane Katrina and are still living in federally owned trailers will be forced to find a new place to live. After nearly three years, the federal government’s temporary housing is coming to an end.

These folks are not going to have an easy time of it, because affordable housing in the Gulf Coast region is scarce. The problem has persisted despite billions in government aid – and the efforts of large private developers – because of a shortage of skilled laborers and sky-high insurance rates.

The Everhouse

Yet now there is hope, in the person of John Sawyer. Not only does this 64-year-old Bostonian believe he can build houses people can afford to buy and insure; he says they will withstand the next big storm. And, by the way, he intends to makes a tidy profit. …

Virtually no one else has been able to do so, it should be noted, even with existing tax incentives and other programs. The Mississippi Development Authority (MDA) is preparing its latest attempt to tackle the problem by allocating $350 million in federal money to developers to build “affordable homes.”

But according to MDA officials, these developers will import many of their workers. Inevitably, this will drive up the cost of construction. And it seems unlikely that any of them will be building the cement fortress that has elated insurance broker Sneed. In short, insurance rates will be high. MDA officials suggest that their subsidies will make these homes cheaper to buy and this will enable homeowners to fork out more for insurance.

One consortium of well-respected, nonprofit developers, which includes Enterprise Corporation of the Delta and Enterprise Community Partners, has already run into problems. In the wake of Katrina, they used both local and imported labor to build modular homes along the Mississippi coast. The cost to buyers ranged between $83 and $115 per square foot.

The houses were made of wood (not concrete), which is probably one reason they cost between $3,000 and $5,000 a year to insure. Recently, this same outfit applied for an MDA loan to develop a 1,100 acre property in Biloxi, Miss. But several officials involved in the project told me that the deal may fall apart, largely because of the cost of labor and insurance.

HT, my mother-in-law (as of this autumn, formally).


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