Post-Hurricane Migration in Florida's Panhandle: Discussing How Financial Health Anticipates Relocation

Kathleen Peters: Welcome to the Atlanta Fed's Economy Matters podcast. I'm Kathleen Peters, an editor in the Atlanta Fed's Public Affairs department and host for today's episode.

Because hurricanes threaten much of the Atlanta Fed's Sixth District-including the Florida Peninsula, and the coasts of Georgia, Alabama, Mississippi, and Louisiana-hurricane season seems a good time to discuss a research paper from the Federal Reserve Bank of Atlanta's Department of Community and Economic Development.

The paper is titled "Through the Eye of the Storm: Post-Hurricane Migration in Florida's Panhandle." The authors are Elora Raymond of Georgia Tech, and Dontá Council and Pearse Haley of the Atlanta Fed. Their research reveals how the economic consequences of a disaster can unfold over a long period of time-even years-and the household-level financial indicators that can foreshadow some of those consequences.

In October 2018, Hurricane Michael made landfall in Florida's panhandle as a Category 5 storm. For this study, the research team tracked the affected residents over several years. Their analysis reveals that though only a small share of folks were directly displaced by the storm (about 4-5 percent of residents), residents living in disadvantaged neighborhoods experienced a decline in neighborhood quality in the course of relocation, while advantaged residents relocated to even more advantaged areas.

I'm speaking with one of the authors about why patterns like this matter, and how communities can prepare for such displacement -and perhaps better mitigate their recovery. I'd like to welcome Dontá Council; welcome, Dontá.

Dontá Council: Hi there. I'm glad to be here.

Peters: Dontá is a senior adviser on the Community and Economic Development team. He provides subject matter expertise to inform the Bank's mandate and community development function. Dontá's areas of research examine the impacts of shocks and stressors, community investment, and economic outcomes affecting lower- to moderate-income communities in the Atlanta Fed's district states.

Before joining the Fed, Dontá spent time in the nonprofit sector, including the Community Foundation of Northeast Alabama, and at Old Dominion University in Norfolk, Virginia, researching and addressing areas affecting local communities across the South, including disaster management, multi-sector administration, and place-based investment. As a professional and an academic-a.k.a., a "pracademic"-he works to find solutions through evidence building, engaging communities, and informing investment approaches, so that communities are aware of (and can attract) resources to address community needs.

Dontá, your background spans several disciplines: political science, public administration, and policy. With that interdisciplinary expertise in mind, what sparked your interest in studying the economic aftershocks of natural disasters?

Council: Katie, thank you for having me on today's episode, and I'm excited to share a little bit about what we've been working on in Community and Economic Development. So, to answer your question about what sparked my interest in this work: Originally, I'm from Virginia-Newport News, Virginia, which is a coastal area-and I actually experienced my first disaster in 2009, Hurricane Ida, which was a storm that caused about $2.2 billion in damage to the area. It was one of the first experiences of disasters for me, and one of the things that was always striking to me was just really understanding: How do communities (and families like myself, and others) respond to and recover from disasters?

I remember very vividly the power outages, and having to source for food, and things of that nature that were really, really, difficult, and it made me always wonder: How do families that may not have the same level of resources survive these natural disasters? And so, I've always been really interested in community resilience-how do communities prepare for and respond to disasters? My academic and professional background, as a social scientist and as a professional, is trying to understand: How do humans make decisions, how do organizations make decisions around investment, and particularly around disaster recovery-and so how do we really help communities not just bounce back to their pre-disaster stage, but really be able to bounce forward?

Peters: Well, that's fantastic. I love the way that a personal experience from your childhood informed your professional expertise as you move forward. Now, you just covered several of the main research questions that guide your study on how natural disasters affect households and communities. So as we move forward into this particular paper that you all wrote, how did you settle specifically on Hurricane Michael?

Council: So, part of our role in community development is really trying to understand issues that are in our specific districts. And one of the things on our team that we tend to monitor are the impacts of disasters being that we are much more prone to hurricanes and other types of tropical storms. In 2018, when Hurricane Michael landed, our team actually went out to Panama City to try to understand what's happening on the ground-what are the impacts to firms and businesses, what are the impacts to households?

And so, we spent some time on the ground trying to really understand and gather intelligence around what are community needs. And a lot of what we heard from those conversations were things like lack of access to household resources, larger financial instability from households-even a lack of insurance to cover damages from the storm (particularly from heirs' property owners, which was a really big challenge).

And so, we thought that this was an opportunity to bring that intelligence back to our team and really try to say, "This is a risk to our district; how can we better understand what the impacts of disasters are, but also where are people moving to? What type of effect is this really having on relocation decisions, or even the decision to stay?"

And so, we really wanted to try to disentangle that question through this type of research.

Peters: All right; well, that makes a lot of sense, because Hurricane Michael was certainly devastating, and I see how you then ended up focusing on where displaced residents ended up living. That makes a lot of sense when you just connected the dots. How did you decide who to study within the community of affected residents? What kind of criteria did you use in that selection process?

Council: In our study, we really wanted to focus on, again, trying to understand the effect of the disaster itself from other, what might be economic factors in the local economy. And so, part of what we wanted to do is to use a comparative county to compare to Panama City, and say, "Let's understand migration patterns from two counties, one affected and one that has not been affected." And part of what we were able to do was to be able to use basically the unaffected county as a control group, and we were able to say, for those who did not experience a disaster, what was the likelihood of moving out of the county.

And so, for us, it was really, "Let's focus on the affected county," which was Bay County. And then, we also focused on a nearby county with similar demographics, which was Escambia County.

Peters: I understand that, because you do need a control group. People move all the time; there's always going to be a level of migration. So, you had to discern what level of migration in Bay County was a direct result of that hurricane.

Council: That's right. And I think what was also a part of that decision pathway was thinking about: What were the right kinds of data that were available to really help us to answer the question? And so, as we came back to the Bank and really tried to understand data sources, we saw that the credit data-which is Equifax data; data that come from credit scores and reports. And so, these were data that we thought might be able to help us disentangle this "before and after" question, and to really allow us to be able to track residents over time, particularly where they're living.

And so, I think a lot of this was understanding the affected area, and so those who were affected directly by the hurricane-but also understanding, getting a sense of what data were available to really understand moves over time. And so, I think that what we found was that that opportunity presented itself when we were able to see that the credit data were really an opportunity to disentangle this question.

Peters: So, speaking of the data: data takes time to collect and collate and analyze, and one of the questions I had was that-it's striking; Hurricane Michael was eight years ago now. So, I guess I'm curious if you can tell us how the research findings are still timely and relevant.

Council: Sure. Part of what I think this data from our analysis you mentioned-not just this paper, but a couple of papers that we've been able to surface-is really trying to understand is not just specific named events, but also: How are community professionals in general responding to more disasters in our district, and how are they supporting communities in our states? I think the things that are coming out of that research are persistent; household financial stability is pretty precarious. When we think about the number of households that are unable to afford a $400 unexpected expense, that continues to rise.

One of the things that has come out of our research when we've asked community development professionals, "What are the things that are keeping individuals from being better prepared for disasters?" We heard things like the lack of savings. We had 81percent of professionals who responded to our survey in 2023 that said that lack of savings was the reason why folks aren't able to land on their feet, they're not able to recover; lack of insurance, not being able to have adequate insurance. And so, while some homeowners, or even renters, may have a policy, it may not be enough to cover the damage. And so, there's underinsurance, which is a persistent issue.

A couple of things that we continue to see and hear are things like just general lack of funding for things like mitigation and adaptation measures, and so the idea that physical infrastructure needs to be in place in order to mitigate these types of-so when we think about flood management, flood plain management, emergency management, a lot of that takes physical assets in order to be able to manage and move those waters. And so, when we think about what's keeping folks, and what's still relevant, there's a big part of this that is really the access to the right types of financial resources, whether it's credit, whether it's through savings; we're still seeing that households and organizations serving households are still building and trying to build that financial resilience.

Peters: This is fascinating. I guess I have a two-part question. It's not a trick question; it's just a two-part question. And one is, you've mentioned the importance of having some resources-and particularly the financial resources-in place.

And so, I guess one finding from your research that comes forward is the role that credit scores played in the economic resilience of residents who were impacted by the hurricane, and then those who either chose to or needed to migrate out of Bay County. And then part two of that, that was striking was how slow the migration process was-that for many of these residents, it occurred not in the immediate aftermath of the hurricane, but over a period of years.

So, I guess, number one: What was that role of the credit scores here? And then, how did the challenge of resources then affect the timeline of the migration?

Council: Sure; I would say that the role of credit, in our study at least-as we saw credit scores go up, the more likely a resident was moving to an advantaged neighborhood, and so they had more amenities. They had things like access to utilities and public infrastructure; there was less poverty.

I think that when we think about the role of credit, what we didn't do in that study was disentangle how people use their credit; what we didn't do is say, "What were the use cases for that credit? What were you able to use for credit versus cash? Did you have to use credit in order to wait for an insurance payout? Did you have to use credit in order to wait for maybe a federal assistance payout?"

I think that there are lots of things that, as we think about the role of credit, oftentimes it is access to liquidity in a time where there's some sort of big shock. Oftentimes, when we think about a shock, there's some sort of loss of income, loss of wages; credit is one of the bigger places that folks tend to lean on, and so it was unsurprising that we saw that credit was a big factor in understanding how people, their neighborhood outcomes, where they relocated to. But I think that part of where we think about credit is really, again: How can credit fill in the gap for other sources of capital while they're coming in after a disaster?

It can oftentimes take one to three years for a resident to receive federal aid, or even an insurance payout, depending on the process and all the things that come along with that process. And so, that safety net of credit tends to be a big safety net that folks tend to lean on, and so we see that credit is a prevailing factor in how people relocate and where their neighborhood destination outcomes end up.

Peters: So, one of your other findings-and I'm wondering if it's tied to this-is that renters seem to face different challenges than homeowners, and that they seem to struggle more than homeowners after the disasters. What contributed to that statistic most directly?

Council: I don't know if we have an answer to that question, specifically. So, we did use what we call a variable to try to understand if someone may have been a homeowner versus a renter, and I think that part of where we landed was really understanding that oftentimes if we look back at the literature on disaster recovery, homeowners tend to be favored in terms of financial assistance because there is some sort of property at stake. For renters, there just isn't as much access to federal support, and so oftentimes we see these different outcomes in recovery around homeowners versus renters, because of this lack of access to other types of financial resources.

Peters: That makes a lot of sense. Okay; well, thank you for that. You clarified a question for me.

It seems that with quite a bit of your research, then, taking the next step has potential implications for policy. So, what opportunities in disaster policy or support systems are you actively investigating through your research?

Council: A lot of what we are looking at now is really thinking about the role of community development finance in supporting communities in the recovery of a disaster. What we've seen over the last few years, in terms of some of the research that's come out-for example, the Center for Disaster Philanthropy recently released research that shares, from their State of Disaster Philanthropy report in 2023, that about 0.9 percent of funding from philanthropy went to disaster transactions. And so, that equates to about $1.2 billion in disaster recovery.

So less than 1 percent of dollars from philanthropy is going to these types of disaster recovery activities, and so we're really trying to understand how philanthropy is investing those dollars and to what extent they might align even to community development-related needs-so, affordable housing needs after a disaster, workforce-related needs after a disaster. We know that, at least in terms of the capital ecosystem, there's an opportunity to think about actors; and so, philanthropy is one of those areas.

One of the other actors I think about a lot is our CDFIs, the Community Development Financial Institutions-the mission-driven banks that are really meant to fill in lots of the market gaps that are left for places where folks can't find the right types of credit. In the 2019 CDFI survey from the Fed, we looked at some of the data, which was already saying that CDFIs are already doing work in this space, and so about 22 percent or a quarter of respondents reported that they had engaged in activities related to a natural disaster, meaning that they provided some sort of service, loan, grant, or volunteer service as a part of their service products in order to support low to moderate income communities. And so, thinking of things like financing, and bridge loans or emergency relief to individuals and businesses-even some providing disaster education.

When I think about the policy ecosystem, I really think about the capital ecosystem: Who is providing capital to support communities for various issue areas, and how can we better align and support these capital providers to better support and understand community needs? And so, when I think about the policy area, the capital community development finance space is a space that I think a lot about.

And then on the fiscal policy space, which again is not necessarily our area, but FEMA (which is the Federal Emergency Management Agency), who provides a lot of our first-line defense for the country around disasters. And so, there's a lot of, I think, work that's happening there to think about heirs' property and how to support individuals who are affected by a disaster and being able to support them quickly, to be able to get access to those dollars a bit quicker without needing to have a burdensome administrative application process. And so, there are things that I think that are happening in the policy space-which federal, state, and I think it's even the role of private sector to think about how can we better support communities in the recovery of a disaster.

Peters: So, circling back then to the notion of the relevance of your research: What I'm hearing is that you've got specific findings-the role of credit scores, a lack of financial resilience; we've got the out-migration that happens, and then the quality of the moves and that analysis. And then it's revealing policy opportunities or ways that you all are able to provide your research, your analysis, and your data to those policymakers to help them as they formulate action steps.

And then you've revealed this philanthropic lacuna, the lack of those donations headed there. My question is: How widespread are these patterns? In other disasters and in your other studies, are you seeing that these things tend to replicate, that these are trending? It sounds like that's what I'm hearing, is that this is not only Hurricane Michael-that these patterns seem to be that it is a pattern, and it is replicating. How widespread is it across the Sixth District, and even beyond the Sixth District?

Council: What we looked at was just a named storm, so just one event. Part of our role, as we see our role as the Fed, has been monitoring risks to the economy. And so, I think, as we think about ongoing risks, we know that there will be more frequent or severe hurricane or disaster events.

How widespread is the migration effect? I think that there's probably maybe a little bit more recent research that's gone into looking at a more national view, or even a regional view. I think that as we look at what really happened during Hurricane Michael, the 5 percent of movers that really moved as a part of the effect of the hurricane itself, I think that we have to really start to take those numbers seriously and really think about 5 percent of the population. Within that third year after the storm, there was a little bit more than a third of the population that had moved by then.

And so, as we think about a third of the population moving within a county, we may think about, what is that story telling us? Is that some sort of financial stress? And when we think about a lot of those movers actually moved outside of the county, not just their neighborhood. And so, are we thinking about the right types of housing options to keep folks in place-so, affordable and safe housing options-and how are we thinking about housing options that include resilient features (being able to make sure that your home is a safe place that can withstand a hurricane, or high winds, or even flood-related activity)?

Peters: I think you've answered this in a few ways in a few different moments in our conversation here, but I want to kind of underline that when it comes to what this means, I should say, for our communities on the ground: With your research, is there something that local leaders or nonprofits often overlook that your research perhaps underscores, which maybe should move to a higher tier of emphasis or focus when we talk about economic resilience or mitigation mediation after one of these disasters?

Council: Sure. I think that one of the things that is striking to me-we didn't look at this in this particular study, but I think about a lot how communities can plan for and think about their own preparation, whether that's at the household level or community level or an organization level. Planned communities tend to respond better to these types of events, and so, as we think about the need for economic development priorities and affordable housing, we should also be including conversations around disaster preparedness and disaster recovery: What will it take to build to either a certain building code or a certain structural standard that will be able to withstand ongoing disasters in the future?

And so, I do think that a lot of where the opportunity is, is to think about this not just from…I think oftentimes as a disaster researcher, what is interesting is that disasters tend to either create or exacerbate existing conditions in the community, and so it's not just a housing issue, it's not just a workforce issue, it's not just a childcare issue-it's a multi-issue area. And I think that as we think about solutions to really, really wicked problems, we have to think about setting multi-sectoral tables: private, non-profit, and public sectors sitting at the table to do this sort of planning together, in conjunction with each other.

Peters: Your research has really brought forward, for me, the sterile data and made it real, in terms of households and individuals and the impact that these natural disasters can have on not just a family, but on an entire community and on neighborhoods. And today you have surfaced and highlighted so many of these issues, and any one of them could be a study in and of itself.

I was wondering what kind of feedback you have gotten on this research, whether it's the specific paper or your research in general. Are you hearing from the nonprofits and the local leaders, and folks who've been affected?

Council: Sure. So, one of the things and opportunities that we get to engage in is after a disaster, typically. So, through the Community Reinvestment Act is where we're able to do a little bit of engaging with banks around: What are community needs after a disaster?

Oftentimes, when there is a disaster-thinking about, more recently, Hurricanes Laura and Delta in Louisiana in 2020, and also Hurricanes Milton and Helene more recently, in 2024-a lot of times what we do is go out to these communities and try to set a table for bankers to try to understand community needs: How many housing units have been affected, what sorts of industries have been affected, what are the needs in order to recover? And we try to gather that intelligence and try to share that out with the banking community, typically bankers that may have a community reinvestment obligation.

But these tables are not just limited to bankers; these can be other types of lenders, whether it's a CDFI or a philanthropic organization. And a lot of what we heard, particularly in these conversations, are, "Wow, there's great need out there."

And one of the things that we've also heard-particularly from folks in the field, community development professionals-is that when there are existing infrastructures, and so there are networks for people to understand how to deploy capital, how to share capital, how to share resources, this is one of the things that we've learned during COVID, particularly the COVID-19 response around emergency rental assistance. What we learned from our district is that when we looked at spend-down rates at the state level, one of the things that was a factor that really contributed to the success of being able to get those dollars out, was having pre-existing networks.

And so, there were nonprofits and banks that had pre-existing networks that they were able to already use to get those dollars out the door instead of having to create new networks. And so, [they were] really thinking about networks as an opportunity to strengthen capacity, I think, within local communities.

Oftentimes in these conversations, as well as in terms of feedback, what we hear from bankers is that "We're excited that, one, that there is a table after a disaster-but also, we get to hear about what other investors are investing in, and so we may be able to partner and to collaborate." And so, we find that these are often times where we can foster collaboration amongst private and public sector around investments into communities.

I think what we've heard is that it's great to know that there's someone out there listening, alongside FEMA, around community needs-but also, once you understand those needs, how do you resource them? And I think that what we've heard is that our convening capabilities have been helpful to be able to set those tables, when others aren't able to set those tables.

Peters: Well, you sure are doing significantly compelling work, from the data gathering, to the research, to the analytics, to the writing, and then going out into the communities. Thank you so much. Thank you for your time today, Dontá, and thanks for your willingness to join us on the podcast and sharing your research insights with us.

Council: Great. Thank you for having me.

Peters: We have a link to the paper "Through the Eye of the Storm: Post-Hurricane Migration in Florida's Panhandle," and to another article on this same research by our staff writer, David Pendered, titled "The Atlanta Fed's Role in Understanding the Economic Impact of Natural Disasters." They are available on our website at atlantafed.org and that's all for this episode.

I hope after you're done reading Dontá's paper, you will check out the rest of the Atlanta Fed's website, where we have lots of information about economics, the economy, banking and finance, payments, and lots more. Thanks again for spending time with us today, and please come back next month for another episode.