The Scoop
The Press Room
Looking at Land Before and After Katrina, and Today
Taylor: Before Katrina, we were in a stable market. After Katrina, no one knew the conditions of the property values. We were just in a clean-up-and-rebuild mode. The appraisers around our area took classes with appraisers from Florida to try and determine what the real value of property should be, since the housing market down here was extremely inflated. Because of all the rebuilding and the construction, people were looking for places to live. The supply of housing was so low, and the demand so high that the prices were out of control and terribly inflated. If there was a house still standing, it could be sold, because Hurricane Katrina destroyed so many houses, there were no places for any one to live.
People were paying well-above market value just to have places to live. Now, prices are beginning to decrease and return to where they were before Hurricane Katrina. However, there’s still an extreme housing shortage. Therefore, the future for investors is really good along the Gulf Coast. The coast is rebuilding, the older houses that were flooded during the storm are completely renovated, and the values of those houses are much higher now than pre-Katrina. We have some houses where the slab and the bricks may be 50-years old, but the inside of the house has been completely renovated and features new sheetrock, recessed lighting and new flooring. Houses that may have sold for $100,000 before Katrina are now selling for $150,000 to $160,000.
Question: What effect has the casino industry had on the Gulf Coast since Hurricane Katrina?
Taylor: Since the casino industry is growing, it’s so desperate for employee housing that in one county north of the Gulf Coast is in the planning stages for the biggest urban-development program in the nation, called Horizon. This program will give casino workers incentives for working for them. For example, if you buy a house in this area, a casino will give you a $20,000 down payment for your house. If you work for a casino consecutively for 5 years, you won’t have to pay back that $20,000. This development will be about 20 miles from Biloxi and Gulfport.
Question: So, the casino employees will have to commute 40 miles a day, right?
Taylor: That’s correct, but the casinos are considering running shuttles from this neighborhood to the casinos where the employees work. Then, when it’s time for shift change, the employees will board the bus and ride home. When it’s time to go to work, they’ll catch the shuttle bus to the casino. Now, this idea is still in the developing stages, but the casinos are heavily-considering this option. The projected number for this development is 10,000 to 20,000 new homes. The concept is to buy a large tract of land, let contractors build houses and sell houses to employees. Then the casinos will help the employees with the down payments, if they agree to work for the casinos for 5 years.
This employee-retention program will help solve the problem of finding and housing employees for the casino industry. Too, it will give employees a way to buy new homes near their jobs that have stable futures. So, on the surface, the plan looks like a win-win type of development for everyone. Now, when you bring in this many new people into an area, those people will have a need for more services, more products and a growing economy. So, there still will be plenty of need for additional housing and commercial properties and rural lands.
The casinos are basing the model for this urban-development program on what took place around the Birmingham, Alabama, area and other places in Kentucky and Virginia when coal mines and ore mines first opened. The mines were opened in rural areas where there wasn’t enough housing for the employees needed to operate the mines. Therefore, the mine owners built communities, developed neighborhoods and provided incentives for the workers to be able to buy houses close to their workplaces. This model may be old, but it’s still as effective today as it was in the past. If a business develops a need for employees, and there’s no place for employees to live, for that business to survive and thrive, it must first solve the housing problem. That’s what is happening on the Mississippi Gulf Coast today.
For more information about properties in the Gulfport/Biloxi area, call Russell Taylor at 228-669-5515, or email him at russell@mossyoakproperties.com.
|