05 - Built to Fail: The Hidden Crisis in American Housing Resilience
THE RESILIENT PATH: Forging Your Unshakable Life
The evidence is starting to show – most common modern building methods and insurers don’t support long-term sustainability or resiliency! This will become abundantly clear in the years ahead. In fact, with mountains of evidence, and some recent examples, I can easily prove it.
The current construction market consists of well-established material/supply/installation company monopolies with methods of construction that leave little room for real innovation - unless it supports the existing, highly-leveraged construction-financialization model. This is why innovation in this sector seems “stuck”.
I’ve collaborated with numerous technology and brick & mortar solution partners with legitimate, high-value, economically viable business models – each of them has struggled for years to get any real traction or attention from investors, developers, AEC firms, or GOs.
Nothing, Nathan, Nada for true innovators in this space.
As you’ll see in the following experience, my journey through discovery and problem solving for shelter has been nothing short of good, bad and ugly!
It’s a heavy subject and not an easy problem to solve. So much so, I dedicated over 15 years of my life to solving it - in the form of time, money and effort to create a viable solution. While not for everyone in every situation, I believe you’ll find makes a whole lot of sense in particular applications such as remote cabins, forest ranger stations, churches, municipal buildings, homes & hospitality venues on disaster-prone real estate, key infrastructure buildings and high-value item storage buildings. In fact, in a later chapter, I elaborate more on this shelter solution’s key role in creating viable communities of the future...
Let’s dive into the situation and solutions:
Insurance
Don’t kid yourself, the current property and casualty insurance market in the US has failed financially (and is likely insolvent).
What you’re witnessing now in the State of FL for example, is a slow-motion train wreck of insurers scrambling to figure out how to default on contracts which most customers have paid premiums for decades - while they shift funds to business-lines they believe they can salvage.
Why else would Allstate and State Farm stop underwriting policies in California, one of the TOP TEN economies in the WORLD!
In 2022, Allstate and State Farm announced they were no longer going to issue business or homeowner’s property insurance policies in the State, due to the unpredictability of “climate change” and their inability to effectively assess risk. State-based insurance funds like the “Citizens Property Insurance Corporation of Florida” are being created as a band-aid to maintain confidence in the current property insurance model. CA recently announced a similar program and insurers like Allstate and State Farm are considering re-entering that market again (if they haven’t already). The State insurance programs claim they are not taxpayer-funded, but I bet if you peeled back the onion, they are nothing but stealthy bailouts for failed business decisions (remember 2008?). The past and ongoing financial losses in the insurance sector are just too big.
I’m 100% confident in the math - these State programs are also going to fail in the not-too-distant future, if they haven’t already.
The fact is we’re quickly approaching a point where the system breaks and then we’re going to be forced to do things differently. It’s like any other decision in life – do I endure the uncomfortable pain and reality now on my terms or do I put it off to a later date while the problem continues to get worse and it happens on someone else’s terms?
The chart above reflects the proportion of homeowners’ property insurance lawsuits as of January, 2023 in the US as compared to one state: FL. What’s wrong with this picture?
Water Damage
After a hurricane or flood, did you know that more than 80 cents of every dollar is spent on replacing, rebuilding or repairing damage due to water? A large portion of this staggering amount is spent on the shelters we live and work in. We’re talking about drywall, insulation, wood trim, wood sheathing, carpet, tile, appliances, air conditioning systems, computers, fixtures, wiring, repainting, personal belongings and much more. It’s such a big problem, solving this problem alone makes a huge dent in righting the ship! Oh, wait, yeah, I forgot...we’ve already spent trillions of dollars to build our homes and businesses in an unsustainable way and continue to build them back the same way!
Builders
I’ve tried speaking and working with more than a dozen custom and high-volume builders across the country in the last several years. You’re not going to incentivize or convince them to do anything different that doesn’t fit into their current way of doing things. As it stands right now, their margins are what they are and they’re confident they can continue to make money as is. They’re not going to change unless forced to through supply chain issues or other significant product improvements which improve current profitability models.
Utilities
The US now has a large and growing portion of power utility providers which are private, for profit providers. In some regions, more than 60% of customers receive electricity from them. Publicly Owned Power Utilities still exist and provide their customers with exceptional service and on average, power bills which are as much as 13% lower than the privately owned companies. Public utilities still dominate the water utility space, but that is changing rapidly with the woes of aging infrastructure and retiring staff.
BEING RESILIENT TIP: Where’s your blind spot? Those private providers have ZERO incentive to expedite the restoration of your service or make any changes that don’t improve their profitability!
Monopolies hate competition – they’ve lobbied for decades and continue to lobby to create tighter legislation in EVERY state of our union which restricts your use of “competing solutions”; rainwater collection, cisterns, next-generation septic tanks, communications and off-grid power sources.
Cash Flow
When disasters happen, cash flow stops. Whatever solution you and your community ultimately decide to embrace and invest in, make absolutely sure there’s at least ONE sustainable and resilient shelter in the equation which supports minimizing the disruption of cash flow for local small businesses – in the form of dry storage, un-disrupted electricity, un-disrupted communications, a store of potable water and a waste water treatment system.
The local businesses and community can rally around this resource and begin the restoration of services and commerce in the broader community quickly. Without this, you are completely dependent on outside “forces” which control your outcome! Doing this around a church or fellowship-sponsored resource is best, and I discuss this later in the chapter on “Community”.
Fire
I’ll cover this topic much more in a later chapter, but important I touch on one concept briefly here – What’s the easiest way for you to lose everything you’ve invested in to achieve a sustainable and resilient life? Fire. Just look at the show “Homestead Rescue” as an example.
BEING RESILIENT TIP: Whatever you do, you must have shelter and provisions for fire prevention or fire resilience.
I’ll end this topic of fire with an important question – In just the last few hundred years, how were people in thousands of African villages, Native American tribes, early American settlers, Civil War armies, and entire cities during the great wars forced to move when some antagonist said they had to go?
Weather
Weather is not an exact science, which is why in my next life, I’m going to be a weatherman and get paid for being wrong much of the time! It’s not their fault. Based on the data I have and years of setting proper expectations with my colleagues, our weather is going to continue to change unexpectedly over large regions of the country and world. In order to be sustainable, our future communities must begin to introduce economical, highly resilient buildings into the mix – if not, those communities will fail and their residents will be forced to move.
Any solution from here is going to be accomplished by you making a decision that you’re not going to spend your time, energy and hard-earned money on something that’s not going to last. These decisions and actions, one household at a time, are the “bridge” to a future model of doing things - all while doing our best to economically salvage and re-use whatever possible from the investments already made!
PRODUCT RECOMMENDATION: If you'd like to add some uniqueness, circularity, and nostalgia to a project by incorporating de-constructed or pre-used materials into an existing or new building, reach out to the team at Recapturit. Larry is a leading innovator in the space. This simple action, even if it's a single door, plumbing fixture, electrical fixture or piece of furniture, makes a difference towards legitimately improving your community or regions' sustainability!
Shelter is real estate. The world of real estate, insurance, construction, finance, contractors and materials is not going to stop tomorrow, but other variables in the real estate market are changing rapidly and will drive an involuntary change towards simpler, sustainable and resilient building methods in the coming years. To do anything else will be economically non-viable. It’s in your best interest to be ahead of the curve, since statistically upwards of 90% of independent wealth has been made or is generated from real estate-related investments! It’s important that if you’re going to invest in any real estate as a long-term investment, especially improved real estate, you make informed decisions about the sustainability and resiliency of the property to assess its true value.
Today, there is no real guide to building resilient and sustainable shelter which helps you to simply understand the problems we face and what solutions are available for the path forward.
For starters, I challenge you to find a consistent, objective definition of the word “sustainable building” and “resilient construction” anywhere on the internet.
Wait, what? All I’ve heard for the last decade is “sustainable” this and “resilient” that.
Definitions do not exist for the average American in a commonly known and referenced standard.
Yes, there’s LEED Certification and Energy Star. Well intended, but the reality is they haven’t moved the needle with proper incentives to result in widespread adoption or objectively sustainable and resilient buildings!
If you’re not in the construction industry, can you name one building which you know of that is “LEED certified” and if so, what that means to you in terms of benefit from actual sustainability or resiliency?
You’re starting to understand why this has been such a good, bad and ugly experience!
Practically speaking and using my experience as a barometer, a reasonable definition for each of these when balancing cost with performance in today’s rural real estate market means that:
“Sustainable” = any occupiable building design economically viable in terms of total build cost and operational cost for the next 50+ years where the number of occupants conforms to current residential and/or commercial building codes.
“Resilient” = Able to withstand extreme weather in the form of 1/2” or less size hail stones, Winds of 120mph or less, floods under 8’ in flood prone areas and minimal to zero long-term disruption of essential services like power, water, communications and waste water treatment in the event of a natural disaster.
Legitimately sustainable and resilient shelter using the basic definition above is made possible from these few key factors:
1) Energy consumption and efficiency - Determining requirements by calculating the cost to generate electricity using “off grid” methods like solar, hydro, geothermal, or other source, without utility power. It doesn’t mean you can’t use utility power. If you did, you could just use it as a backup or supplemental power source, not your core, essential needs. If "green energy" is as good as the messaging says, then why not?
2) Consistent power - essential mechanical systems in the shelter (i.e. Heat, A/C, refrigerator, other appliances) must have consistent, reliable power. The reality is that without consistent power, in 3-5 weeks the local economy ceases to exist and you're typically forced to re-locate when you experience a catastrophic, extended outage due to:
natural or man-made disaster
shortage of replacement transformers, wires or poles
shortage of manpower
Many examples of this exist in recent history of disruptions forcing people to re-locate (i.e. western NC, Ukraine, SW FL.)
3) Extreme weather resilience - design features preventing damage from extreme weather events in excess of the reasonable definition above
4) Fire prevention - Design features preventing damage from an exterior fire
5) Water damage prevention - Permanent, intentionally designed protection from water damage
BEING RESILIENT TIP: Case in point, there are ZERO mass produced off-grid solutions available today which economically compete with on-grid US utility power rates - rates which average 13.7 cents per kWh.
This is an example of one of the more cost-effective, modest-quality lithium batteries made in China. 100Ah @ 12.8V = 1280 Watts or 1.28 kWh of power storage in this battery. At a cost of $279.99, the cost per kWh is 218.74 DOLLARS for power stored in this battery. Compare this to the on-grid cost per kWh of 13.7 CENTS and you quickly begin to understand why on average, only a small percentage of residential solar power systems in the US have battery backup – it’s the cost of the batteries!
Batteries are just one component of an off-grid solution. Solar panels, wind turbines, cables, land/real estate, power regulation equipment, power inversion equipment, time, manpower and experience are all additional expenses in the off-grid equation!
Why is no one talking about this elephant in the room?
Oh, that’s right…because it’s an elephant in the room, and people don’t like talking about elephants in the room.
As a homeowner, unless you have lots of money to spare, or a legitimately sustainable and resilient building, the math doesn’t work. Many thanks to Will Prowse and his Youtube channel for his invaluable deconstruction, evaluation and assessment of this product and so many others!
RESILIENT PATH INSIGHTS: Here’s things to keep in mind and questions you should be asking yourself about your existing and/or new shelter (improved real estate) investments:
Property insurance you’re paying for on any building(s) quite possibly will not perform as assumed, unless you intimately know it's terms and conditions and have had any ambiguity clarified in writing by the insurer – you cannot blindly assume property insurance will be reliable in the future, especially in FL, so plan for it
Instead of paying for more insurance, intelligently invest in upgrading the existing building or new project to improve basic sustainability and resiliency – insulation upgrades, high efficiency HVAC, standing seam metal roof, storm shutters, solar power and electrical system upgrades
Does the building have the potential to be cost-effectively upgraded to a much higher level of insulation (i.e. walls and/or roof insulation)?
Pay very close attention to any prospect of a weather event being able to cause significant water damage to your building(s), especially drywall – there is high potential for financial loss here!
Do the doors in the structure have wood or wood-fiber frames that are prone to rotting or damage by pests? - Future replacement will be cost-prohibitive
Are your windows made of wood? - Future replacement will be cost-prohibitive
Are your windows single-hung, double-hung or horizontal sliding? - these and sliding glass doors are prone to major seepage from wind-driven rain, resulting in interior water damage and future mold problems. Casements or awning-style windows are best, but storm shutters are a better overall solution in storm-prone areas!
Is any part of your exterior made of steel, brick, or concrete materials? - These increase building resilience to weather damage, in particular, external fire threats
In the right geography and local conditions, solar power will work as a primary power source in well-insulated, high-quality buildings – when done correctly, this legitimately improves your sustainability and resiliency overall!
BEING RESILIENT TIP: You must understand it’s going to be increasingly difficult if not impossible over time to find reliable, skilled tradesman to maintain what you have, so, have spare parts, invest in higher-quality, reliable, long-lived equipment AND find a dependable tradesman to work with in your area. It’s wise to invest in these local trade businesses – by contributing to their success, you support long-term resiliency for both of you!
There are no silver bullets and there are no miracle workers - only token gimmicks and more lipstick on the same pig to make it look "different". These are simply efforts to extend the existing financialization schemes in real estate.
The reality is that much of the shelters built in the USA and around the world are not built for sustainability or resiliency, they were built to make the builder/developer profit or simply what was available to make due. There are exceptions, but they are the minority. There is no fixing a shelter that’s un-fixable without substantial investment and time – this is where building your resiliency in other areas counts. Where your neighbor might be not as prepared, you can be and vice-versa!
As I discuss in a later chapter, the greatest quality of life for you will most likely be in a community with a diverse population of other prepared people! Use this new knowledge about shelter as a way to create value for your family, friends, and neighbors, especially in times of need.
The future belongs to those who act now and have valuable resources to rally around, adapt, and make it through!
This is also one of the reasons the Sovran Systems Institute (SSI) was formed - it consists of resilient architects who understand complex, resilient and sustainable systems, both technical and natural.
The Institute is the rally point for those with the intention and value to contribute to creating the new resilient systems to replace the fragile, mismanaged and failing systems currently in place.
What make's SSI different? SSI's methods preserve the value in what exists, and simply transform it into what’s next..
Next: 06: The Super Ball Tumor: What My Brain Surgery Revealed About Health Resilience
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ISBN: 979-8-9986646-0-1
Published by Sovran Press.