On Friday, February 12th, a winter storm struck Texas, resulting in a week of the region’s lowest temperature in 72 years and more than 2.5 million residents, or 40 percent of Texas households, without power or water. Due to the state’s choice to deregulate electricity, Texas is widely criticized for creating an electric grid that prioritizes low prices over reliable service. Many residents and businesses across Texas experienced rolling blackouts, frozen or busted pipes, canceled or delayed flights, and minimal public transportation methods. Even hospitals lost water or electricity, indicating how severe the situation was.
As of recent, power has been restored to almost two million Texas homes, but hundreds of thousands are still without power or water and are instructed to boil water for drinking. Those who restored water are still experiencing freezing or bursting PVC or copper pipes, causing flooding. For multifamily owners, this is a serious issue, as apartments flood with water, and in some cases, roofs are caving into first-level units. Fire is another deadly danger as residents take risks to warm their apartments. In the situation that a multifamily property experiences bursting pipes, some landlords are providing portable toilets and showers for their residents.
Hurricane Harvey saw $20 billion in insurance claims, and the Insurance Council of Texas predicts this natural disaster to reach $26 billion in damages, with over 750,000 claims. While many insured residents fled to hotel rooms to wait out the storm, renters, in particular, are at risk as they are not required to have insurance. As one of the most expensive storms in Texas history, insurance premiums may increase as a result.
Several retail stores and restaurants that already suffered from the pandemic voluntarily and involuntarily closed due to lack of power or hazardous driving conditions. These closures include retailers, such as Walmart, which temporarily closed 453 locations, and various shopping malls, like Stonebriar Centre, NorthPark Mall, and Galleria Dallas. While restaurants quickly reverted to delivery and take-out methods that they perfected over the COVID-19 crisis, sales didn’t compare to dine-in, as the weather added another variable of difficulty, in addition to the pandemic.
To continue operations, landlords worked with tenants that wanted to remain open during the storm by ensuring customer safety on their property. Because the storm hit on a holiday, Valentine’s Day, retailers took a hit. Despite the Walmart closings, experts deem the grocery space as the best performer as families stockpiled to prepare for shut-ins.
While the damage to property, economy, and residents has yet to be determined, this could translate to increased pricing in the future and change corporation’s perception of the DFW metro, especially those looking into relocating to the area. Conversely, the lack of taxes initially lured companies to Texas, but with this crisis revealing that this means an outdated infrastructure, could further affect the outcome.
For more information, please contact a Matthews™ specialized agent.