FEMA's Parade of Homes (On I-20)

Larry LaBorde
Dec 20, 2005

Business compelled my wife, Puddy, and I to travel to Atlanta this past week. Since it is under my 600 mile no fly zone we drove there. I refuse to fly and deal with the airport gestapo unless it is over 600+ miles. The stress and elevated blood pressure is simply not worth it. While traveling east on I-20 we noticed a few FEMA trailers but as soon as we passed Jackson we saw a non stop parade for hours. We could not drive more than a few miles without seeing another group of 2 or 3 trailers headed for the Gulf Coast. In just 4 or 5 hours we must have seen more than a hundred trailers pulled by trucks with FEMA stickers on the tow vehicles. The press reports that FEMA is placing 400 trailers a day into service.

All these trailers made us think about the long term consequences of potentially misallocated capital. How long were people going to live in these trailers? Will they remain the property of FEMA? If so, will FEMA pay for the maintenance? While riding I also happened to read an article about an RV park in Mansfield, LA that was charging FEMA $450/month/trailer for ground rent on 12 trailers. While I suppose they were including water, sewage and electricity it seemed a little high but then FEMA is renting every space they can so I guess they are having trouble negotiating the best rate. Just looking at the trailers I would suppose they are paying about $15,000/each (probably more). If they are paying for the upkeep, transportation and ground rent it could add up to a tidy sum pretty quick. How long do you suppose the average person will occupy these trailers? I would guess perhaps two years maybe? What happens then? If the trailers remain the property of FEMA they will then have to transport them to a storage area and pay rent to keep them there until they are needed again. Will they be usable after they are lived in for a couple of years and then stored unattended for a couple more? Probably not. The bill on each of these temporary trailers could easily wind up costing $30,000 or more.

When we were traveling in Costa Rica a few years ago our guide told us that the poor could apply for a once in a lifetime grant of $1,500 to buy building materials to build their own home. He had to own a small lot and he had to build the home himself. The person now was a homeowner who cared for his home and added onto it if his fortunes improved later. It was a one time expense for the government with no long tail.

What could we do in this country along those same lines to really help displaced citizens instead of putting them in temporary solutions until government housing can be built for them (another very poor option). Perhaps the government could loan displaced persons $30,000 interest free for 30 years? For less than $85/month plus utilities they could become homeowners. Even if they were very modest homes such as a one bedroom A-frame homes where the parents slept in the den and the children slept upstairs in the loft they would be solid homes that would last. Architecture students could compete to design small square footage homes that were energy efficient and inexpensive to build. Murphy beds could make a comeback. Local building codes could be relaxed to allow the homeowners to do some of the work themselves.

I am not sure what the long term solution is going to be but I feel all these trailers going down the road are only phase I of the governments unformulated and unending plan for these poor unfortunate people. The federal debt grows larger as we squander our national treasure and the end draws nearer.

Larry LaBorde
Silver Trading Company
318-470-7291
website: www.silvertrading.net
email: llabord@aol.com

Larry lives in Shreveport, LA with his wife Puddy, and sells precious metals at the Silver Trading Company.

Larry can be contacted at llabord@aol.com. You can view his web site at www.silvertrading.net.

Send questions, comments or corrections to llabord@silvertrading.net.

"Please note that I am by no means a financial advisor and all investments should only be made after performing your own due diligence." -Larry

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