Tag: First Street Foundation

Greed and fear: the twin motivators

On returning to the U.S. after more than a month of hiking and cycling in western Europe, I’m struck by how little has changed in the domestic RV and campground industry—and how much has changed in the world it occupies, and how little it seems to care.

RVing trends that were already evident in mid-summer continued as before: softening midweek campground reservations, ongoing declines in RV production and sales, relentlessly upbeat industry assurances that any downswing was bottoming out and that 2024 will see a rebound. The natural environment within which the industry operates, on the other hand, continued to grow increasingly inhospitable (as of Oct. 10, the daily average Northern Hemisphere temperature had been at a record high for 100 consecutive days and at least 65 countries recorded their warmest Septembers on record)—and was just as resolutely ignored by RVing promoters, who much prefer to rhapsodize about the exploding growth of glamping and the latest gee-whiz innovations in RV design than to wrestle with issues of climate change and global warming.

The industry’s determination not to acknowledge the existential threat on its doorstep has been enabled by a lack of internal critics, but outside business pressures may finally crack its insularity. In recent weeks, for example, First Street Foundation issued its ninth national climate risk assessment, this time focusing on property insurance—or, more precisely, on the skyrocketing cost or outright unavailability of such insurance because of increased wildfire, flooding and windstorm risks. (I’ve written about some of First Street’s earlier assessments, here and here.) It’s a sobering read. Campground owners will feel the squeeze twice over, first through the increased expense of insurance premiums and then—if they try to sell their property—through the devaluation of their capital investment, as higher expenses mean lower net operating income and a higher cap rate.

This dynamic was further explored in a Grist article published this past Tuesday under the headline, “As climate risks mount, the insurance safety net is collapsing.” Reporting that natural disasters now cost the U.S. insurance industry $100 billion a year, the article rhetorically asks, “What happens when no one wants to pick up the tab?”

The First Street report and Grist’s article both pay particular attention to Florida because of its hurricane vulnerability, so it’s ironic that there is no more extreme example of a state’s businesses and politicians remaining stubbornly oblivious to climate change. A prime example was provided in August by Citrus County commissioners, who voted unanimously to reverse their planning commission and approve creation of the Fishcreek Glampground, despite the coastal property sitting a mere two to three feet above sea level. Bobby Cornwell, president of the Florida RV Park and Campground Association, had lobbied on behalf of the applicants and was only too happy to describe the approval as a major industry victory.

“For well over a year the owners of Fishcreek, Jen and Dimitri Magradze, have meticulously planned the project to co-exist with the beautiful natural setting and to provide outdoor enthusiasts and nature lovers with needed accommodations and access to the waterway without harming the environment,” Cornwell gushed to Woodall’s Campground Magazine. “But even though they had everything perfectly planned for their land and had many local supporters and studies showing how the project would benefit the area and not harm the environment, there was a large, organized effort against their proposal.”

Imagine that. A “large, organized effort” that Woodall’s couldn’t be bothered to describe or Cornwell to rebut, but which was rooted in the same environmental considerations that had prompted the county’s planning commission to reject the proposal not once, but twice, by votes of 5-2 and 6-1. Mere weeks later, Hurricane Idalia struck. The putative glampground’s Facebook page advised followers Sept. 3 that “there is a trailer full of logs submerged in the water along Fishcreek. Please use extreme caution when navigating out here.” So it goes.

Meanwhile, a few hundred miles north, along the coast of North Carolina in the Cape Fear region, the Leland planning board unanimously reversed its own unanimous May decision and voted to allow RV parks in flood hazard areas. The decision was urged by developer Evolve Acquisitions, which contended that it was seeking to “correct a mistake”—that the town had not really intended for flood zones to be off-limits to RV parks. As further evidence of the reasonableness of its request, Evolve’s spokesperson averred that RV parks are often located in flood-prone areas. The case for putting people in harm’s way having been put forth so cogently, the Leland town council unanimously approved the change Sept. 14.

Back when I reported on capital markets, one of my mentors stressed that market movements can be attributed to just two basic impulses: greed and fear. So it is with most things in life. Greed initially has the upper hand when developers start trotting out their honeyed visions, but as the real costs of such laissez faire policies start accumulating, fear will start coming on strong—and then watch out. You’ll be amazed how rapidly things can unravel.

Oct. 14 addendum: Inside Climate News reports that the U.S. Fish and Wildlife Service will consider tightening protections on the West Indian manatee because of substantial scientific evidence that it faces renewed threats to its survival. Citrus County supports the state’s largest concentration of manatees in a natural spring area; the Crystal River National Wildlife Refuge, relatively near Fishcreek Point, was established specifically to protect manatees.

Chill out by camping? Not exactly . . .

Want to go camping? Today’s heat map for the U.S., with the red areas clocking in at more than 103 degrees, are considered “dangerous,” while the darker orange shows highs of 90-103.

Summer is only half over, and the death toll of people out for a walk over the past month is already impressive. Toward the end of June, it claimed a 31-year-old man and his 14-year-old stepson hiking in Big Bend National Park; roughly a week later it added a 57-year-old woman hiking in Grand Canyon National Park. On July 18 it was a 71-year-old man collapsing at a restroom shortly after hiking in Death Valley National Park, two weeks after a 65-year-old man had also died in the park. Four days later, two women, ages 34 and 19, were found dead after hiking into a Nevada state park outside of Las Vegas.

All were doing nothing more remarkable or strenuous than taking a day-hike in areas traversed by countless others. They weren’t roofing a house or picking crops or working at some other job that required them to be outside—they were simply “recreating.” And all had headed into that tantalizing wonderland known as The Great Outdoors during the hottest summer ever recorded, in temperatures that greatly exceeded that of their body cores, seemingly without a second thought about the mortal danger they were courting.

What were they thinking? Can we just write them off as stupid or ignorant, gene-pool outliers that confirm yet again why the Darwin Awards will never run short of nominees? But if that’s the case, what are we to make of the tens of thousands of presumably more aware Americans who each year move to Phoenix, Las Vegas, San Antonio and other gateways to hell, where if the heat doesn’t get ’em, the lack of potable water eventually will?

The fact is that as a species we’re not very good at changing ingrained behaviors, nor are we mentally flexible enough to recognize when a shifting social or environmental landscape makes such changes prudent. We’ve always done things this way, so we’ll continue. And if we do somehow recognize that a change is afoot, we tend to think such change is lineal—a straight-line progression—rather than exponential, which it sometimes is, and which would require a far more robust response from us.

As a result, the prophets are ignored. It’s been just one year since First Street Foundation released its sixth national risk assessment, this one devoted to hazardous heat. The bottom line, as I wrote at the time, was that “extreme danger days,” with temperatures over 125 degrees, would affect approximately 50 counties with 8 million people this year. Presciently, the report went on to claim that extreme temperatures would be concentrated across the middle of the country, in an area stretching from the Louisiana and Texas border north through Iowa, Indiana, and Illinois. The map that accompanied that prediction looks an awful lot like the heat map at the top of this page, generated this week by the National Oceanic and Atmospheric Administration.

Yet most people are still oblivious to such research, even as the heat keeps cranking higher: Phoenix, for example, which continues to be a relocation magnet, is just wrapping up a full month of air temperatures exceeding 110 degrees every day, never mind the temperatures on asphalt roads and car door handles, which can cause second- and third-degree burns. But people in leadership positions whom we might expect to know more, and to know better, are just as oblivious to the implications of what’s happening—even when those implications pose a threat to their livelihoods. Or maybe that’s precisely why they turn a blind eye.

The campground and RV park industry is the poster child for this sort of willful ignorance. Global warming, climate change, extreme weather—all are subjects that never get broached by the National Association of RV Parks and Campgrounds, whose preferred sense of “leadership” is to promote the latest whiz-bang technology or hotel-derived hospitality trend.

And while Kampgrounds of America has at least started asking campers about their weather-related concerns, it has yet to translate its findings into any kind of action agenda, despite many opportunities to do so. KOA’s July report, for example, found that 62% of campers have changed travel plans because of weather concerns, “with 22% canceling, 22% altering locations, and 18% revising the nature of their trips.” What did KOA learn from that? Apparently only that there’s enough camping demand that nothing much changed, as “approximately 21.5 million households participated in camping” over the July 4 holiday, a level “mirroring the previous year’s.”

Nothing to see here!

So now, as we head into the dog days of August and toward the traditional Labor Day frenzy, it’s steady as she goes. The status quo will prevail. The campground and RV industries will keep enticing people to go camping, with pictures of happy families roasting marshmallows and millennials spooning in their Class B vans, dirt bikes suggestively parked nearby. We’ll hear a lot about about “making memories” and “world class experiences” and about the restorative powers of connecting with Mother Nature.

Just don’t take a walk while you’re out there.

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When the house is on fire, yell fire!

Just in time for hurricane season, which officially kicks off June 1, the National Association of RV Parks and Campgrounds today held a webinar/campfire session about disaster planning. The session wasn’t without merit, but as with many ARVC offerings, it was reactive rather than proactive, following the news rather than getting ahead of it. Moreover, the session failed to deliver on a timely promise that it would “consider insurance options,” the lack of which is shaping up as a crucial economic threat to the industry.

Yes, it’s critical for RV parks to have written disaster plans, to get in the habit of educating their guests about the kinds of disasters most common to the area and how to respond to them, and to have a close working relationship with local first-responders—all bases covered by the ARVC panelists. But these and similar bits of advice are limited in scope and imagination, a quiet murmur at the back of a room that badly needs to be shocked awake by a loud klaxon wail. As Susan Motley, ARVC’s education director, mildly observed, “We’re having disasters now in areas where people aren’t used to having them”—not that there’s much outreach to ARVC members about what that means.

Campers know about the growing challenge first-hand. Nearly one in five told The Dyrt for its 2023 camping report that wildfires and other natural disasters had disrupted their camping plans in 2022—triple the rate in 2019. Tornados, hurricanes, atmospheric rivers and record-breaking snowfalls have added to an assault most prominently headlined by wildfires, with their continent-spanning smoke plumes. As reported yesterday in the San Francisco Chronicle, at least five popular state parks in the Sierra are buried in so much snow they won’t be able to open their campgrounds by Memorial Day weekend—and maybe not until well into June, depending on how much damage the melting snows reveal.

An eye-opening snapshot of current environmental risks is provided by the Federal Emergency Management Agency, whose National Risk Index maps 18 different threats across the U.S. But as important as knowing where we are is knowing where we’re headed, and in that respect the news isn’t good: as I wrote back in early March, First Street Foundation makes current circumstances seem downright utopian compared to what we can expect over the next 30 years. And First Street thus far has looked at only four of the 18 extreme weather events that FEMA has been mapping.

The striking thing about all these assessments is that when they’re plotted on a map, you quickly realize the last places you’d want to live or camp—or own a campground—are either Florida (and the Gulf Coast in general) or California (and the West Coast in general). And if the maps don’t convince you of that, the insurance melt-down in both states should. Weather-inflicted damage in both states is so severe that both have back-up insurance plans (so-called Fair Access to Insurance Requirements plans, or FAIR) to provide at least some limited coverage when private sector insurers go belly-up or refuse to sell or renew policies, which has been occurring with increasing frequency. Now even the FAIR plans are foundering.

Florida’s, for example, said last month it may have to borrow as much as $750 million to cover claims caused by Hurricane Ian, an expense that comes at an especially inopportune time given today’s high interest rates. In California, meanwhile, the state-run FAIR plan has accumulated a $332 million deficit while it charges premiums that are too low and has limited reinsurance coverage in case of future catastrophic wildfires. Such plans amount to a hidden tax that politicians don’t like to acknowledge, and they’re growing at a rapid clip: Florida’s FAIR plan has tripled the number of its policies since 2019; nationwide, FAIR policies saw a 29% growth in policy numbers from 2018 to 2021.

It goes almost without saying that campgrounds and RV parks are more vulnerable than other businesses to environmental assault. Many are located along coasts, lakes or inland waterways susceptible to flooding, and many more are in heavily wooded areas that make them sitting ducks in a wildfire–but the standard guidelines for reducing fire exposure, such as removing vegetation within 100 to 200 feet of any structure or RV pad, would essentially create a parking lot. Most are located in rural areas, where fire fighters, EMTs and law enforcement are stretched thin and can need lengthy response times. Disaster is not only more likely to strike a campground than, say, a motel or hotel, but when it does, it’s likely to cause more lasting damage.

These are complicated problems to assess and analyze, which may be reason enough for ARVC to shirk from doing so. Nor does it help that ARVC members as a rule are in deep denial about their predicament—if it were otherwise, they’d be clamoring for ARVC to step up to the plate. They’d be insisting that ARVC create a national database of the specific environmental threats faced by each RV park and campground; they’d push for an inventory of which campgrounds have suffered what natural disaster damages and at what cost; and they’d compel ARVC to start the discussion about insurance options that was promised for today.

You can’t effectively address a problem until you’ve defined its nature and dimensions. What came through in today’s webinar, however, was at best a fragmented understanding of a growing threat, and a somewhat wistful reliance on the industry’s long-cherished tradition of campground owners helping each other in times of need. That’s an admirable history, indeed, but one that’s completely inadequate for the size and scale of the storms ahead.

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An early spring comes before the fall

Here in the heart of the Shenandoah Valley, the daffodils and forsythia are in full yellow splash. An hour’s drive south, Roanoke’s roads are lined with brilliant white canopies of flowering trees. Ninety minutes northeast, in Washington, D.C., the cherry trees have started to pop, nearly a month early.

We’ll almost certainly pay for this bucolic weather later in the month, when the inevitable cold snap grasps all those premature blossoms in its mortal grip—or not, in which case we’ll pay weeks later with a bumper crop of bothersome insects. We’ve had only one significant freeze all winter, back in December, which means that barring a reprise we’ll be looking at a summer of bigger and more plentiful mosquitoes, flies, stink bugs and other pests. But there’s at least some truth in that warning about March—in like a lamb, out like a lion and vice versa—and it’s not unusual for us to have blizzards and significant snowfall well into April. One can hope.

California, on the other hand, has flipped the script with record amounts of cold, snow and rain. Los Angeles, which gets an annual rainfall of 12 inches, has been a flood zone. Yosemite National Park is closed indefinitely, the valley floor buried under nearly four feet of snow amid drifts of 15 feet or more, and more expected in the days ahead. Tahoe’s ski resorts are giddy over unprecedented amount of powder, so much more preferred than the usual heavy “Sierra cement”—but all that snow makes getting to the lodges an ordeal, and in an apparent paradox, the fluffier powder increases avalanche risks. Moreover, if a slight thawing of oncoming fronts brings more rain than snow, look for significant flooding throughout the state.

The weather, in other words, has become enormously intrusive from one end of the country to the other. It’s no longer a background phenomenon, punctuated by the occasional hysteria of a tornado: it’s very much in the foreground almost all the time, throwing one curve ball after another. It shouldn’t be a surprise—we’ve been getting warned about this for at least a couple of decades—but still there’s astonishment and disbelief. And, it should be noted, a stubborn refusal to make significant changes in response.

Consider, for example, the report out today from the International Energy Agency, which found that the world emitted more carbon dioxide last year than in any year on record dating back to 1900. Despite all the global conferences and solemn pledges to reduce such emissions, a rebound in post-pandemic air travel, as well as more cities relying on coal-fired power plants, resulted in an overall 0.9% increase in 2022. More carbon dioxide in the air means a stronger greenhouse effect, which means more heat trapped in the atmosphere, which means more extreme weather, which . . . .

And yet. A Republican-led charge this week seeks to ban retirement funds from taking environmental factors into consideration when making investment choices. Claiming Wall Street has succumbed to “woke capitalism,” the House on Tuesday voted along party lines to repeal a Department of Labor rule permitting such consideration; the closely-divided Senate is lining up for a similar vote, with across-the-aisle support from coal-mining Senator and faux Democrat Joe Manchin. The ostensible purpose of such an attack, as summarized by potential presidential candidate Mike Pence, is to safeguard “hard-working Americans’ retirement accounts.” What’s really at stake is the fear that investment funds will disinvest in fossil fuel companies.

Given the above, it’s ironic that this week also marked the release by First Street Foundation of the latest in a series of risk factors it has analyzed for real estate properties across the United States. A non-profit research group working to make public access to climate risk easy to understand, First Street previously reported on flood, fire and extreme heat trends caused by global warming; this week’ s release is titled “The 7th National Risk Assessment: Worsening Winds.” The bottom line? Tropical cyclones (hurricanes) are becoming more intense and are moving farther north, to such an extent that “over 13.4 million properties will be exposed to tropical cyclones in 30 years that are not currently.”

Poetically, hardest-hit will be the uber-conservative southern states that are most vociferous in denouncing any attempts to curb environmental despoliation, a broad swath from Texas across the Gulf states and along the eastern seaboard to North Carolina and points north, but also as far inland as western Tennessee. But the most vulnerable will continue to be the increasingly feudal state of Florida, which already is burdened with more than 80% of the nation’s hurricane risk, at $13.4 billion in annualized losses—growing to $14.3 billion a year by 2052.

All that seems very far away from the drowsy, premature spring we’re enjoying here in the Shenandoah, however short-lived it may prove. Eventually, though, the piper will collect his due. He always does. Reality bites.

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Out of the frying pan, into the fire

Maximum monthly temperature hazard in 2023, ranging to 119 degrees in the Southwest. From First Street Foundation’s 6th National Risk Assessment: Hazardous Heat

It’s been a helluva week for climate outlook–and it’s not even half over.

Mere days after Las Vegas suffered its second significant monsoon downpour within two weeks–flooding casinos and resulting in two deaths–the New York Times featured a major front-page story headlined, “The Megastorm that Could Inundate California.” Based on research at the University of California and the National Center for Atmospheric Research in Boulder, Colorado, the story detailed the growing likelihood that California will be slammed by a 1,200-mile-long “torpedo of moisture” that will inundate the state with as much as 16 inches of rain–and some areas with much more.

That was on Sunday. Monday, the First Street Foundation released its sixth national risk assessment, this one devoted to hazardous heat. The foundation, which says its mission is to model climate change to benefit property owners, previously analyzed flood and wildfire risks across the country. The freely available heat analysis, however, may be the most troubling. While the 121-page report, which includes two-page summaries for each individual state, is too lengthy to summarize here, suffice to say that the overall findings are visually summarized by the above map: it’s hot. It’s going to get a lot hotter. And the heat is going to last longer.

Bottom line? “Extreme Danger Days,” with temperatures over 125 degrees, will affect approximately 50 counties with 8 million people next year–and 1,023 counties with 107 million residents by 2053. Those extreme temperatures, however, will not be where you might expect: they’ll be concentrated across the middle of the country, in an area stretching from the Louisiana and Texas border north through Iowa, Indiana, and Illinois, affecting such cities as St. Louis, Kansas City, Tulsa, Memphis and Chicago. Meanwhile, the total number of “local hot days,” defined as the lowest temperature of the hottest seven days of this year for any given area, will grow to about 30 days at the same temperature in 2053 for large swaths of the South, with Florida hit hardest.

Such extreme heat has numerous implications, starting with the greater instability it creates in the weather, most notably in Midwest and prairie states already ravaged by tornadoes. Agriculture will take a hit. So will electric utilities, and nowhere more than in Texas, whose power grid is notoriously fragile even as it remains largely isolated from the larger national electric network. And, of course, there’s the whole thing about loss of health and longevity when human bodies are attacked by a brutal environment.

But the kicker is that the states with the highest odds of getting hammered by drought, flood, cataclysmic storms and extreme heat are also the states–other than California–with the highest influx of new residents. Florida, Texas, Arizona, Nevada–all have become magnets for people relocating from other parts of the country, ostensibly in search of lower taxes, more salubrious weather and less pesky government intrusion into their lives. It’s as though none of those tens of thousands of annual arrivals ever read or watched the news, or wondered where they would get their drinking water when the reservoirs are finally dry, or thought about the consequences of underfunded public services and emergency resources.

San Antonio, Phoenix and Fort Worth had the biggest population gains between 2020 and 2021, according to the U.S. Census Dept. Meanwhile, eight of the 15 fastest-growing large cities or towns by percent change were in the West — with five in Arizona — and seven in the South. More lemming-like behavior is hard to imagine.

What all this implies for RVers and campers in the years ahead is not hard to imagine. For all of the increased use of RVs as primary dwellings, most RVers and campers are indulging a discretionary behavior that isn’t essential to their well-being, which is to say, they simply won’t go vacationing in a hellscape. And those who do inadvertently end up in a scene out of Hieronymus Bosch will in most cases simply move on. Campground owners, on the other hand, will have no attractive options at all–something anyone still thinking of buying an RV park should keep very much in mind.

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