As the cleanup begins along the east coast after the destruction left by Hurricane Sandy, residents hit hardest in areas of New York and New Jersey begin to calculate the damage that has been done.
Hurricane Sandy is now officially listed as the biggest hurricane to have formed in the Atlantic Basin. Some media sources have proclaimed this hurricane as “New York’s Katrina.”
Rebuilding will take time and money and it will be costly. Over the past few years, we have seen several hurricanes cause insurmountable damage to various regions.
In 2005, Hurricane Katrina caused severe destruction along the Gulf Coast and was responsible for several deaths in New Orleans. Repairs and rebuilding in the region go from affected oil production, infrastructure, manufacturing plants, to housing residents displaced by the hurricane. When all is completed, it is estimated that the total cost will exceed $150 billion.
A year ago, Hurricane Irene swept through the eastern coast hitting major areas in the Northeast. The cost to rebuild will exceed $12 billion to repair infrastructure, roads, power outages and other damages caused.
The latest damages from Hurricane Sandy will have a significant impact on the region. The rebuilding process will be challenging and will take some time. Early reports from analysts and economists are projecting over $50 billion for the rebuilding efforts.
So where does the funding for reconstruction come from? Disaster relief can come from various sources. Federal Emergency Management Agency (FEMA) provides the support and assistance in situations like the one our country faces with natural disasters. Just recently, Republican nominee Mitt Romney stated that he would cut funding for FEMA in order to reduce the national debt. The cuts proposed would be significant and FEMA could stand to lose over $878 million in 2013 as a result of automatic spending cuts implemented by the government.
This will not be an easy task. Homes were lost or damaged throughout New Jersey as well as New York including 111 homes lost in a Queens neighborhood due to a fire. Mass transit, Con Edison, and other city properties faced significant damage that will cost considerable resources to restore.
Federal and State Funding will be called upon for the rebuilding process. FEMA’s current disaster relief fund is close to $7.8 billion for Hurricane Sandy but based on the previous hurricanes listed, there will be a need for more funding.
Additional emergency funds will be utilized and President Obama has stated the Federal Government will indeed provide assistance to those affected. The lessons learned from Hurricane Katrina still weigh heavily today when it comes to response time and emergency preparation.
The challenges of rebuilding will come with the time it takes to restoring power and transportation. Rebuilding homes destroyed or damaged will also take up private funds and insurance dollars. Years of savings will be used in some cases to alleviate the losses. One additional resource that can help with the rebuilding process and construction of new homes comes in the form of surety bonds. For more information on surety bonds, click here.
When rebuilding gets underway, preparations will need to be made to take into account the changing climate and environmental future of a region. Homes, buildings and city infrastructure should be designed in a way to prepare for natural disasters such as the ones we have seen as of late. This will be the only way to reduce the damage and destruction in the future.
Kent Yuen is a writer for JW Surety Bonds, the largest surety agency in the country specializing in performance bonds and construction bonds. For more information on different types of surety bonds, click here. In his spare time, Kent can be found spending time with his family and mastering the art of controlling a soccer ball.
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