In the wake of a devastating 9.0 magnitude earthquake and resulting tsunami in Japan, some real estate groups are organizing relief efforts for the country’s short- and long-term needs.
Allen Okamoto, broker-owner of real estate and insurance agency T. Okamoto & Co. in San Francisco and founding chair of the Asian Real Estate Association of America (AREAA) has set up a relief fund through the association to assist people in the country’s Tohuku region rebuild their homes.
"I am currently involved with several relief efforts by different organizations. All of the other organizations are dealing with the immediate needs of the victims such as food, water and clothing. Since the Asian Real Estate Association of America is a real estate-related organization I felt it only proper that we help with the long-term needs (of) rebuilding homes," Okamoto said.
"We hope that over the year we will generate a lot of donations as the people of Japan surely need it. The devastation is horrific, not to mention the loss of lives."
The association is accepting donations by mail to: AREAA, 5963 La Place Court, Suite 312, Carlsbad, CA 92008-8823. Checks should be made payable to: AREAA Foundation Earthquake Relief Fund.
The death toll in Japan continues to mount, with the latest figures exceeding 9,000, and with more than 12,000 people still missing since the quake and subsequent tsunami hit on March 11. Whole coastal towns have been destroyed. Electricity access, roads and rail lines have been damaged, stranding more than 1 million people across the country, according to news reports.
Some electronics and auto plants have temporarily shut down due to breaks in their supply chains. A breakdown of reactor cooling systems at the country’s Fukushima nuclear plant triggered a massive evacuation in the area surrounding the plant and is not yet resolved.
The National Association of Realtors has recommended four organizations it believes are "well equipped" to provide disaster relief services. These are AmeriCares, Habitat for Humanity International, UNICEF-USA and World Vision.
NAR reports that some members have received "scam e-mails from organizations, some calling themselves real estate associations, purporting to collect money for Japanese tsunami relief."
To "make sure their donations reach those in need," the association recommends potential donors follow tips from Charity Navigator, a nonprofit organization that evaluates charities. These include avoiding newly-formed charities and seeking out a charity’s authorized website.
"Realtors build communities here in the U.S., but we also have a role to play in the global community, as well. With that in mind, we want to express our heartfelt concern and support for the people of Japan during these trying times," said Ron Phipps, NAR’s president, in a statement.
The Seattle-King County Association of Realtors, the official NAR Ambassador Association to four nationwide real estate associations in Japan, is accepting donations by mail and online to The Realtors Environmental Council (TREC) for long-term relief projects in the country, including those devoted to rebuilding and shelter.
"TREC will identify suitable relief projects in consultation with our affiliated real estate associations in Japan. Once the appropriate and qualified projects are identified, TREC will forward 100 percent of the donations we receive," the association said on its website.
Major property search site Realtor.com is donating ad space to the Salvation Army to help raise aid funds for Japan and also urges others to donate through text message or through the Salvation Army’s website. To donate by text, donors can type JAPAN to 80888.
"Public transportation is shut down and people are in need of basic supplies. Though the Salvation Army has several emergency service relief teams and is offering hot meals and drinks, more help is needed," Realtor.com said in a blog post.
The Real Estate Board of New York (REBNY) is encouraging its members and industry professionals to donate to the Japan Earthquake and Tsunami Fund set up through the Mayor’s Fund to Advance New York City. The trade association said 100 percent of the funds are guaranteed to go "to reputable organizations that are providing disaster relief efforts."
"With critical infrastructure still severely damaged and a bottleneck of goods in the country, relief organizations are stressing not to send food and supplies at this time," said Steven Spinola, REBNY’s president, in a statement. "Right now the most pressing need is for financial help."
Funds are being accepted online, by phone at 311 or (212) 788-7794; or by mail: Mayor’s Fund Advance New York City, 253 Broadway, 8th Floor, New York, NY 10007.
Some real estate professionals in the U.S. have seen more inquiries from their clients about the possible effects of an earthquake or nuclear accident in their markets. For instance, Barrett Powell, a broker at Coldwell Banker Advantage in Raleigh, N.C., found renewed interest in the Shearon Harris Nuclear Plant just southwest of Raleigh.
"Now we are hearing of a 50-mile radius danger zone in the Japan crisis and all (of a) sudden there has been renewed interest in Shearon Harris and how the plant will effect lives and real estate in the region. I’m sure in the next few months we will see renewed discussions about the plant, which could in turn cast some concerns with people looking to relocate to the area and purchase property within a larger radius," Powell said.
"Coupled with higher gas prices already effecting rural real estate, we are likely to see increased pricing pressures on the rural areas surrounding nuclear plants in this country."
Nevertheless, though California’s shores sustained an estimated $40 million in damage from the tsunami, the U.S. mainland was largely unaffected by the disaster.
The crisis in Japan, the world’s third-largest economy, will likely have more of an impact on inflation and global stock markets, some experts say.
Factory shutdowns "could add to a shortage of some critical parts, particularly related to electronic products, and thereby lift inflationary pressure for these goods worldwide. Less nuclear energy usage will mean more oil consumption, which could also add to inflationary pressure on energy products," said Gregg Stratton, a NAR research economist, in a blog post.
Investors put their money into U.S. Treasury bonds this past week, which drove down interest rates, according to Freddie Mac. This included the 30-year fixed mortgage rate, which fell to 4.76 percent.
Global insurance stocks took a hit after the quake, with some experts predicting the quake and tsunami may cost the global insurance industry as much as $60 billion, making it the second-most expensive disaster behind Hurricane Katrina, which cost insurers an inflation-adjusted $71 billion, according to an article by The Washington Post.
Much of the cost is expected to fall on the Japanese government, which covers earthquake damage to residential property as well as natural disaster-related damage to nuclear power facilities. That will be a heavy burden to bear for a country with a public debt that is more than twice the size of its $5 trillion economy.
Yale University professor Robert Shiller, co-creator of a widely followed home-price index, told CNBC the disaster was likely to cause stock market volatility similar to that experienced after Japan’s Kobe earthquake in 1995. Stock markets globally plunged a week after that quake and the Nikkei, a Japanese stock market index, fell over 5 percent in one day.
"I think it was the news stories, the stories of human failure and mistakes that the Japanese government couldn’t handle that earthquake," Shiller said.
Similarly, it’s becoming apparent that the Japanese government did not prepare well for this disaster, Shiller added, which may once again impair the world’s confidence in Japan.
Reconstruction will likely provide stimulus to the debt-ridden Japanese economy, "but I don’t know if that will offset all the negatives," Shiller said.
Sterling Joe Ory, 2010 president of the New Orleans Metropolitan Association of Realtors, said he sees parallels between the responses to the current crisis and the Gulf Coast disasters of Hurricane Katrina and the BP oil spill.
"First, both Katrina and the tsunami eradicated homes, disrupted basic services such as housing, power and potable water. Katrina left survivors in a sweltering (heat); the tsunami left survivors in near-freezing temperatures and both areas were unable to attend to the diaspora, while at the same time, devising strategies to tackle the Herculean task of recovery.
"Japan’s nuclear debacle came much quicker than the BP oil spill, but both areas were unable to mitigate the damage with any expediency," Ory said.
Government inefficiency only exacerbates the helplessness and anxiety ordinary people feel in the face of disasters of such huge proportions, Ory said.
"I can’t convey to you how defeating to the spirit the BP oil spill was to our local psyche … thousands of barrels of oil threatening your homeland just collapses your spirit. You can rebuild your home, but you are powerless to rebuild the Gulf of Mexico, and the wetlands and the wildlife and the sea life.
"I suspect the people of Japan are experiencing the same depression. Floods, human misery, loss of life and possessions do not necessarily defeat the will to rebuild. Ecological disasters can only be watched. Nothing is more defeating to the human spirit than the feeling of helplessness."
