Victoria apartment complexes undergo hurricane repairs

Oct. 29--When Hurricane Harvey struck Victoria on Aug. 25, 2017, Alfreda Hamilton was forced to leave her home of 15 years in Central Park Apartments because of the water damage.

In mid-December, she expects to return to her home. She's been waiting for Central Park Apartments to be repaired for more than a year while living at Autumn Park Apartments temporarily.

"That's home. This is just a way station," said Hamilton, 73. "I'm anxious to get back. I've been there for so long."

Hamilton will move back into a one-bedroom unit like she had before with new appliances and interior and with a rent increase of about $200.

Her unit was one of more than 400 apartments damaged badly enough by the hurricane that tenants had to move. More than 30 percent of Victoria apartments were damaged by the hurricane.

So far, about 140 units in Victoria have come back online for leasing at Caney Run Estates and Summerstone Apartments, said Melissa Moore, Victoria Apartment Association president and Autumn Park Apartments property manager.

"Everyone is working as hard and as diligently as we can to get these units back online and get back to business as usual," she said.

Moore said about 1,000 of members' 6,800 units were damaged by the storm. The association has 115 members in Victoria, Calhoun and DeWitt counties.

Market impacts

Occupancy spiked to about 95 percent after the hurricane because the damages and displacement of tenants created demand, Moore said. Now, occupancy averages between 92 and 93 percent.

She said she didn't observe rental rate increases because of the hurricane, but complexes quit offering move-in specials because of the demand.

Moore said not many units have come back online, but apartment officials are working as quickly as they can to make units available. They have to wait for insurance claims to come through, which is a difficult and tricky process. She said she expects more units will come back online starting next year.

"I don't know if anyone got exactly what they estimated to be able to do the repairs," she said.

Rental rates will probably increase for units as they become available because the units will be renovated with new interiors, she said.

About 20 units damaged by the storm at Autumn Park Apartments are expected to become available in mid-November, Moore said. The repairs have a valuation of about $285,000, according to a city building permit. Summerstone Apartments' repairs had a valuation of about $185,000, according to a city building permit.

Jim Gaines, Texas A&M University Real Estate Center chief economist, said although he doesn't have data on the apartment industry in Victoria, he's heard anecdotally that in Houston the hurricane displaced many apartment tenants and homeowners, which increased demand and rental rates. He thinks the same happened in Victoria.

"The demand pushed up the rental rates," he said. "The rents are going to go up any way you work it."

Nancy Garner, Woolson Real Estate president, said emergency measures initially kept rental rates in place for the company's properties after the storm, but over the past year, with demand and less inventory, rental rates went up. With units coming back online, apartment officials will see how the market settles.

The repairs to rental properties managed by Woolson Real Estate cost in excess of about $30 million, including the drying, demolition and rebuilding costs, Garner said.

About 90 percent of Carriage Park Apartments, Central Park Apartments and Treemont Apartments were damaged by the storm enough to displace tenants, she said. About 60 percent of Mosswood Apartments were damaged heavily along with about 20 percent of the Whittington Apartments.

Leasing has started at Central Park Apartments and at the Whittington Apartments, Garner said, and leasing will begin at the other three complexes in about a month.

Repairs are expected to be finished in the first week of December at the Whittington Apartments and by the first quarter of 2019 for the other four complexes.

"This a relief, and it's exciting. Some of these properties were older," she said. "There are a lot of things that have been upgraded and changed or new. They're greatly improved. It's not without a lot of sweat there and a big investment."

Dealing with insurance

It took Woolson Real Estate officials six months to dry properties and demolish what they needed to, Garner said, which they had to learn how to do as they're not in that business. Officials presented about 44,000 photos of damage for their insurance claims. Just one of the claims measures 18 inches thick with documents.

Insurance officials inspected damaged roofs owned by Woolson several times. Each time, the roofs had to be re-tarped.

"It was at least more than six times in over a year," Garner said. "It was many thousands of dollars every time we had to re-tarp."

Negotiating with insurance companies was a long, difficult process that included mediation. Eventually, Woolson Real Estate and its insurance companies came to a final agreement a few weeks before the storm's anniversary. The company received its final check a few weeks after the anniversary.

"In some cases, the property owner is having to spend more, and they lost equity," Garner said. "They're having to pay out of pocket to finish repairs properly."

The owners of The Villas -- Claude Raffin and Jon Gathercole, both of Las Vegas -- have yet to settle with their insurance companies to repair the 71 of 85 units left uninhabitable. They've only received $659,000 to replace the complex's roofs.

The owners' adjuster came up with an estimate of about $5 million to complete the repairs, but their insurance adjusters came up with the figure of $1.1 million.

Raffin and Gathercole are still fighting with their insurance companies and have not been able to start any work after replacing the roofs. They're considering getting a lawyer.

"Dealing with Harvey and insurance, I never would have dreamed 14 months later we would have not gotten the place up and running," Raffin said. "The adjuster with the insurance company told our adjuster that we won't be getting any more money."

According to city building permits, other complexes undergoing hurricane repairs include Mockingbird Lane Apartments with a valuation of about $388,000 and La Dominion Apartments with a valuation of about $646,000.

Bretton Village Apartments and Gardens of Victoria have finished hurricane repairs, officials said.

With many apartment units to come back online next year, the rental market in Victoria should meet most renters' needs, Garner said.

"There were people who wanted the newer cabinets and granite but maybe the newer properties were a little bit more than they wanted to include in their budget for housing," she said. "Hopefully (the older renovated properties) fit this market."

Kathryn Cargo reports on business and agriculture for the Victoria Advocate. She may be reached at kcargo@vicad.com or 361-580-6328. Follow her on twitter @kathryncargo.

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