In the year since Hurricane Sandy slammed into the East Coast, construction companies have seen their business spike as homeowners tap them to rebuild, particularly on the hard-hit Jersey Shore.
Among the key drivers fueling this business are existing Federal Emergency Management Agency requirements and the agency’s soon-to-be-finalized flood-zone maps. In particular, in some communities, the owners of homes that sustained more than 50 percent damage in Sandy are required to elevate their houses — literally raising them on pilings — or demolish or relocate them.
Even some homeowners whose properties weren’t severely damaged are taking steps to protect against future hurricanes and to hedge against higher insurance premiums.
In Long Beach Island — which is dotted with homes midway through reconstruction — a firm called David Construction LBI House Raising, for example, has seen a 50 percent increase in business since Sandy hit. To handle the extra work, the company has added several employees and doubled the number of subcontracting crews it uses. “If we could handle all the work and if we could grow that quickly, we would have 30 times the amount of business,” said Nancy Leonetti, co-owner of the firm.
To get homes into FEMA compliance, Leonetti said, her firm is raising them a minimum of three to four feet above their existing height. She estimated that a two-story Cape Cod-style house, ranging from 1,400 to 1,800 square feet, can cost $50,000 to $55,000 to elevate. (In some densely packed communities, however, special pilings are necessary that can drive the cost up to $100,000.) That amount usually needs to be paid up front by the homeowner, who then gets reimbursed by the insurance company.
But because hurricane-damaged interiors — including plumbing and flooring — are covered by flood insurance, many LBI homeowners are essentially getting “a brand-new house,” Leonetti said, even though they’re only paying $20,000 or $30,000, including the cost of elevating the home.
Leonetti’s firm is not the only construction company seeing a boom in business.
Wolfe House & Building Movers — a national home elevation company — has also seen business increase by more than 50 percent since Hurricane Sandy. Indeed, the company’s website has a section devoted to post-Sandy home elevation, which cites one Jersey Shore client in Ortley Beach whose home it raised 11 feet.
But Jersey Shore homeowners are dealing with a slew of rebuilding challenges. First, there’s a dearth of experienced home elevation contractors. Not only does that slow down rebuilding, but it’s also led to serious construction accidents, according to State Senator Bob Smith.
“There are horror stories all over New Jersey,” Smith said. “The classic one was in Atlantic Highlands — [a house] flew off the jacks and crushed the adjacent home.”
Smith is sponsoring a bill that would require home elevation contractors to have at least two years of training with a qualified professional, and $500,000 in specialized home-raising insurance.
There are also disparities between communities. While residents of affluent LBI can typically afford the up-front costs of home elevation while awaiting reimbursement from insurance companies, homeowners in the nearby mainland communities, like Beach Haven West and Mystic Island, often can’t.
Indeed, between June and September, 6,600 New Jersey homeowners applied for funding through the state’s Hazard Mitigation Grant Program, which is providing up to $30,000 toward elevating homes.
In addition, many homeowners with flood insurance don’t realize that they have “Increased Cost of Compliance” coverage, which can also pay up to $30,000 toward the cost of a home elevation project, said Nathan Colmer, a realtor with the Van Dyk Group.
He also noted that many homes in New Jersey’s flood-prone areas are at elevations that are safely above sea level and do not need to be raised to comply with the FEMA guidelines. “People think that every house has to be raised or they are going to be paying $20,000 a year in flood insurance,” Colmer said, “but that is absolutely not the case.”