More needs to be done to ensure the survival of local businesses after a natural disaster occurs because households and businesses are mutually dependent, say two Texas A&M University professors.
Yu Xiao, assistant professor of urban planning, and Shannon Van Zandt, associate professor of urban planning at the Hazard Reduction and Recovery Center (HRRC) at Texas A&M are researching the interdependency between post-disaster household and business recovery, specifically the recovery efforts in Galveston following Hurricane Ike, four years ago this month, in September 2008.
Population growth in high-hazard areas, such as along the Gulf Coast, as well as poor building practices, are exposing greater and greater numbers of people to harm from natural disasters, according to Xiao and Van Zandt in a report titled “Building Community Resiliency: Spatial Links Between Household and Business Post-disaster Return,” published by SAGE Journals.
“Businesses provide jobs, and goods and services, and households provide labor and consumption,” says Van Zandt. “One can’t return without the other.”
She says after a hurricane or other disaster, relief efforts tend to focus on households, leaving business owners to fend for themselves and small businesses, in particular, often can’t recover. “The big ones like Home Depot blossom after hurricanes,” Van Zandt points out. “Large chains and franchises can pull resources from outside the damaged areas, but the ‘mom-and-pops’ are much more likely to fail.”
The researchers found small businesses to be more vulnerable because they are more likely to lack hazard management plans and resources to finance recovery, and to occupy buildings in inferior condition.
In studying Hurricane Ike, the third costliest hurricane in the nation’s history, the researchers found that 75 percent of all the structures on Galveston Island received some type of damage. “The entire island was covered in water,” says Van Zandt.
“We found businesses that had disaster plans in place did better,” says Xiao. “They had an easier time getting their inventory out and securing their facilities, and then recovering after the storm because the preparation reduced physical damage to the business.”
The study found that manufacturing businesses are less dependent on local customers and are therefore more resilient after a disaster than other businesses. “It’s the businesses that provide services ― the grocery stores and restaurants ― that have a harder time recovering, but are so important to the households,” notes Van Zandt.
Xiao explains that once a community begins rebuilding, businesses need to be aware of how the community has changed and be ready to adapt. “It may not be the same client base as before the disaster and if they don’t adapt, the business may fail,” she says.
She also notes that some business owners see a boom in their business immediately after a disaster, whether it’s in damage repair or serving the needs of volunteer workers, but that may fade out over time. “We spoke with an auto repair shop owner whose business was doing very well right after Hurricane Ike,” Xiao recalls, “but once the cleanup was done, he had no business. So business owners shouldn’t trust the conditions immediately after a disaster.”
The researchers also found that communities with ongoing problems such as poor building practices and social inequality will see these problems accelerate after a disaster. “What happens after a disaster is a magnification of processes that are already taking place, so you if you have a community that’s not taking care of itself before the disaster, it’ll be even worse after,” Van Zandt explains.
Helping local business to prepare and recover will, in turn, help the entire community, say the researchers. “Businesses should invest in their communities, be engaged in community planning and better building practices,” says Van Zandt. “They should carry disaster preparedness information in their stores and have a plan for their own recovery. And local governments should put forth more of an effort to help businesses survive.”
Faster access to loans after a natural disaster is also critical for business survival, Xiao emphasizes. “Businesses can get Small Business Administration (SBA) loans, but the stack of paperwork is a mile high,” she says. “The bridge funds from local banks in Galveston after Hurricane Ike were much simpler and addressed the immediate needs of businesses. It’s just a matter of cutting the red tape so the money is available quickly for businesses to rebuild.”
A better community can emerge post-disaster as a result of what the researchers call “creative destruction.”
“It sometimes clears things out, so those businesses and households that are marginal will go away, giving stronger businesses and households a chance to thrive,” Van Zandt says.
The researchers say all communities should have disaster plans, not just those vulnerable to hurricanes. “Whether it’s a natural disaster or even a terrorist attack, the potential is there and is part of what every community faces,” says Van Zandt. “When that day comes, and it will come one way or another, they need to be prepared.”
Media contact: Lesley Henton, News & Information Services at (979) 845-5591