Three years after Hurricane Ian devastated Fort Myers Beach, a slow recovery has revealed significant financial challenges for the community. The storm, which struck in September 2022 with winds reaching 155 miles per hour and a storm surge of 15 feet, left many homes and businesses in ruins. As reconstruction continues, the financial implications are becoming increasingly apparent, particularly for the middle class that once thrived in the area.
Jacki Liszak, chief executive of the Fort Myers Beach Chamber of Commerce, reflects on the slow progress: “We are nowhere near where we thought we would be three years ago today.” Liszak, who lost her small hotel, now faces the reality that the town may become financially inaccessible for many former residents. Rising costs for construction and property insurance threaten to displace local family-run businesses, leading to a shift towards larger resorts and high-end homes designed to withstand future storms.
Local builder Rob Fowler highlights the ongoing transformation: “That gentrification is a real thing… only well-heeled players can play now.” This shift is not unique to Fort Myers Beach; it is indicative of a broader trend across southwest Florida, where an influx of older, wealthier individuals has exacerbated the affordable housing crisis. The challenges facing families in disaster-prone areas are compounded by rising insurance costs, which have surged in tandem with climate change-driven weather events.
According to David Burt, chief executive of DeltaTerra Capital, the impacts of rising insurance rates extend beyond individual homeowners. He notes that decreasing property values in areas like southwest Florida can lead to diminished local tax revenues. As families grapple with the costs of living in an increasingly perilous environment, the potential for a “long-lasting economic shock” looms large.
Rising Costs and Stricter Regulations
Hurricane Ian accelerated an already pressing affordability crisis in Fort Myers Beach. Just prior to the storm, Shelton Weeks, director of the Lucas Institute for Real Estate Development & Finance at Florida Gulf Coast University, noted that many businesses were struggling to retain workers due to rising housing costs. Ian’s aftermath propelled these issues into overdrive, forcing homeowners and businesses to contend with new state and federal building codes.
Following the hurricane, the Federal Emergency Management Agency (FEMA) revised flood maps for Lee County, placing most coastal properties into higher-hazard zones. As Fowler explains, “Rebuilding would have to meet tougher federal standards,” including elevating structures above expected flood levels. Although these measures aim to enhance resilience, they also significantly increase rebuilding costs. Liszak estimates that reconstructing her hotel could exceed $4 million, a figure that many local businesses find untenable.
Insurance rates have skyrocketed since the storm. According to Bankrate, the average cost of homeowners insurance in Florida has surpassed $5,700, making it one of the highest in the nation. Flood insurance adds another layer of expense, particularly for those living in high-risk zones where lenders require coverage. The current landscape leaves many families struggling to make ends meet, with some realtors predicting an uptick in foreclosures.
Community and Economic Impacts
The housing market is feeling the strain as homeowners face rising insurance premiums alongside declining property values. In October, the average home value in Lee County had fallen by more than 10% year-over-year, according to Zillow. Home sales have also slowed, with the median time on the market reaching 87 days, a 26% increase from the previous year. Jessica Gatewood, a local real estate agent, reports that many homeowners are pinching pennies just to afford their monthly mortgage payments.
Renters are similarly affected, with landlords passing increased insurance costs onto tenants. Melyssa Caballero, who moved to Lee County from Miami in 2022, has seen her rent more than double since then. She reflects on the precarious situation: “Little by little, you’re going to see everybody going away.” The Florida Chamber of Commerce’s latest migration report indicates that nearly 511,000 residents left the state in 2023, with high housing costs cited as the primary reason.
The insurance industry’s challenges have also contributed to these rising costs. Robert Gordon, senior vice president at the American Property Casualty Insurance Association, points out that legal system abuses and fraudulent claims have placed additional pressure on insurers. Although recent legislative changes aimed to reduce litigation have resulted in a modest average rate increase of just 1% this year, the underlying risks remain significant.
As Fort Myers Beach continues to rebuild, the community faces a critical juncture. Town councilman Scott Safford remains hopeful, stating, “I still think that this island is going to come back.” However, he acknowledges that many local businesses have already relocated, fearing that national chains may fill the void left by smaller enterprises.
Liszak expresses concern over the potential for another major storm before the town is ready. “That will chase away all the investors,” she warns, emphasizing the need for ongoing investment to sustain the local economy. With the specter of climate change looming over coastal communities, the path forward remains uncertain.
