What’s Wrong with the Insurance Market Along the Gulf Coast and How Do We Fix It?
Wednesday, October 20, 2010
The University of Southern Mississippi
Gulf Park Campus
Fleming Education Center Auditorium
Long Beach, Mississippi 39560
A coffee reception will begin at 8:45a.m. and a reception will follow the presentation. The event will include a panel discussion of the current insurance market and the future of reform efforts.
There is no charge to attend, but space is limited.
Panelists will include, but are not limited to:
Gene Taylor, U.S. Congressman, 4th District Mississippi
Steve Scalise, U.S.Congressman, 1st District Louisiana
Lenwood Brooks, Legislative Assistant, Senator Roger Wicker
Lloyd Dixon, Senior Economist, RAND Corporation
Dave Treutel, President, Treutel Insurance Agency, NFIP Advisory Council
Jim McDonald, Independent Insurance Consultant, RAND Contributor
At Slabbed we well remember the rollout of REACH Mississippi to great fanfare last year. Joe Spraggins was all over the airways touting the program but before those commercials ran details of the program were leaked to the press and it is there we begin for some background:
In 2007, the Gulf Coast Business Council created the Renaissance Corporation, a non-profit group charged with creating affordable housing options for south Mississippi hurricane victims. The Renaissance Corporation is about a month away from unveiling what it considers an ambitious affordable housing program.
Specific details about how two thousand south Mississippians could become new homeowners aren’t being released to the public just yet. However, the non-profit group recently did a test case with an Ocean Springs woman. And, Denise Baker’s moving into a new home because of the financial assistance she received from her boss and Reach Mississippi.
Last week, Baker got the keys to a house in Gulf Park Estates. She contacted a few friends, and got them to help her move in.
“It’s been exciting,” the new homeowner said. “Stressful. But exciting.”
Home ownership became possible for the single mother when her bosses at the Andover Company urged Baker to be a test case for a Renaissance Corporation housing initiative.
“It was a win-win situation for both of us, for my employer and for myself,” she thought.
Through a program soon to be called Reach Mississippi, Baker’s employer put money for her down payment. And the Renaissance Corporation used private contributions to make a three for one match. Just like that, Baker had a house in close proximity to her office. And she had a mortgage she could afford.
What the story does not mention is that Mr Spraggins was Ms Baker’s boss at Andover (the Andover website is down as I write this post but the Google Cache from last month is here and the wayback machine snapshot from March 2008 is here), which specialized in residential SIP Construction. The company had made a sizable investment in lots and spec houses in Diamondhead and their inventory of high-priced homes was not moving as the real estate market on the western end of the coast began to die in the fall of 2007. Undaunted by the unique circumstances that made the down payment assistance helpful in Ms Baker’s case the program was finalized and those commercial featuring Spraggins were made. The local media continued promoting the program because there is no better story than free money that gets people into houses after a major Hurricane. Curious about the program, I visited the REACH Mississippi website to look at the program criteria and ended up wondering if economically the numbers made sense. Anita Lee answered that question in Sunday’s Sun Herald Continue reading “And they offered “free” money to get Coasties in houses and could not find enough takers”