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OPINION: Preserving affordable housing after a disaster

by Olivia Nielsen | Miyamoto International
Friday, 30 October 2020 13:24 GMT

ARCHIVE PHOTO: Framed pictures are seen hanging from the wall of a house damaged by earthquakes in Sindhupalchowk district, Nepal, May 13, 2015. REUTERS/Ahmad Masood

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* Any views expressed in this opinion piece are those of the author and not of Thomson Reuters Foundation.

As crises become more frequent, planners and investors should work together to avoid gentrification in the aftermath of disasters

By Olivia Nielsen, associate principal at Miyamoto International.

Disasters disproportionally affect poor households. Because, their homes unfortunately tend to be built on less desirable disaster-prone land, they tend to suffer greater damage. After a disaster strikes poor households often have to face a difficult decision: invest in repairs or move? If the cost of repairing a home is simply too expensive, households will be forced to leave their communities they have long called home.

Displacement can lead to another type of crisis: gentrification. As the cost of damaged homes plummets and households become desperate for cash, savvy investors seek opportunities to buy up the damaged housing stock. These investors are sometimes referred to as ‘vultures’ as they seek to profit off the loss of others. By buying homes at a discount, these investors can choose to undertake the needed repairs or simply demolish the structure and replace it with a more luxurious one, which will yield a greater price.

The current double crisis in Beirut triggered by hyper-inflation and a large explosion in its port, is putting many households in this difficult position. Neighborhoods are putting up signs saying that “Beirut is not for sale!’ as they seek to defend themselves against predatory investors.

In the meantime, measures are quickly being applied to preserve the city’s damaged historical heritage buildings, by forbidding sales without the first approval of the Ministry of Culture. Yet, as government reform and donor stagnate, many households may not have a choice and may prefer to accept hard cash now over longer-term promises.

This phenomenon is not unique to Lebanon. In the United States, real estate investors have been active in buying up damaged homes after major hurricanes. From Katrina to Harvey, the trail of destruction goes beyond the immediate effects of the storm as entire communities disperse and neighborhoods gentrify.

These disaster investors aren’t acting out of malice but are instead taking a risk no one else is willing to take and rebuilding back better (and fancier). Without active interventions to preserve communities, they often present one of the only rebuilding options.

Even the COVID-19 pandemic has fostered a new type of disaster capitalism, while an eviction moratorium has protected renters in the US, this may be bad news for small landlords who may no longer be able to keep up with mortgage payments and property taxes. These small landlords may be forced to sell their properties to larger institutional investors who have the financial capacity to weather out the pandemic.

As crises become more frequent, how can we keep communities together and avoid gentrification in the aftermath of disasters? A few ideas:

  • Build better before to avoid the destruction in the first place. We need to invest in resilience today and mitigate the impacts of disasters, pandemics and recessions. Resilient homes should withstand external shocks and enable households to continue living in them even after a disaster occurs. Avoiding future displacement by investing in resilience today should be a major priority.
  • Offer rapid support to households to help them rebuild and remain in their communities after a disaster strikes by offering more than simple eviction and sale moratoriums. Households need funds to rebuild quickly after a disaster so they can return to their homes and their communities. Waiting too long may force them to relocate, sometimes permanently, in search of (short-term) better living conditions. Reconstruction efforts need to be efficient in order to avoid displacement.
  • Support small landlords. Not all households are homeowners and many homes worldwide are in fact owned by small landlords (as opposed to large institutional investors). Working with landlords to enable them to rebuild efficiently can not only save them from ruin, but also support households in returning to their homes faster. Conditions can easily be attached to reconstruction grants to promote affordable rental and the preservation of communities. 

From pandemics, to hurricanes and earthquakes, disasters are now part of our daily lives. We need to work together to develop policies and programs that both mitigate the impact of disasters and keep communities together after they hit us.