Public infrastructure investments and Texas' deadly flooding

Summary

Marketplace Morning Report Summary Episode: Public Infrastructure Investments and Texas' Deadly Flooding
Release Date: July 9, 2025
Host: David Brancaccio

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Introduction

In this episode of the Marketplace Morning Report, host David Brancaccio delves into the recent catastrophic flooding in Texas, explores the challenges in public infrastructure investments, examines the surge in copper prices impacting the economy, and discusses innovative rebuilding strategies in Southern California amidst increasing wildfire threats. The episode provides a comprehensive analysis of how climate change is influencing both disaster response and economic landscapes.

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Texas' Deadly Flooding and Infrastructure Gaps

Catastrophic Flooding Impact

David Brancaccio opens the discussion by highlighting the severe flooding in Texas, which resulted in over 100 fatalities and left 170 individuals missing. The disaster underscores the growing threats posed by climate change, predicting an increase in such catastrophic flooding events globally. Brancaccio notes, “Experts say the world can expect more catastrophic flooding at a time of human-made climate change” (01:08).

Lack of Effective Warning Systems

A critical factor exacerbating the tragedy was the insufficient flood warning systems. Brancaccio points out, “There was no on-the-ground alarm system in place,” leading to difficulties in coordinating an effective emergency response when the Guadalupe River surged more than 30 feet in just five hours (01:18). Andrew Schneider from Houston Public Media elaborates on these shortcomings, emphasizing the need for robust alert mechanisms.

Legislative Efforts and Challenges

The episode delves into the legislative response to the flooding disaster. A Legislative Analyst explains that during Texas' regular legislative session, lawmakers considered a bill proposing an investment of at least half a billion dollars to enhance emergency communications infrastructure. This investment would include outdoor sirens akin to those used for tornado warnings. However, the bill failed to pass in the Senate, likely due to its substantial financial implications (01:43).

Governor Greg Abbott has indicated plans to revisit the issue in a special legislative session, with Lt. Gov. Dan Patrick expressing strong support for improving emergency communications. Patrick stated on Fox News, “If the city can't afford it, then the state will step up and we need to have these in place by the next summer” (02:29), highlighting the urgency to implement these systems promptly.

Expert Opinions on Emergency Communications

Kerry Stevens, an expert in emergency communications at the University of Texas at Austin, cautions against relying solely on technological fixes. He mentions, “Technology is not necessarily the only thing we need to solve the problem” (03:04), advocating for a multifaceted approach. Stevens emphasizes the challenges of notifying people in rural areas, which remains a costly and labor-intensive process (03:08). Instead, he suggests leveraging trusted organizations and businesses to disseminate emergency updates effectively.

Federal vs. State Responsibilities

Adding to the discussion, it is noted that President Donald Trump has proposed phasing out the Federal Emergency Management Agency (FEMA), intending to shift its responsibilities to the states. This federal policy shift adds another layer of complexity to Texas' efforts to bolster its emergency response infrastructure (03:33).

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Economic Impacts: Copper Prices Surge

Transitioning to economic news, Brancaccio reports that futures are up by one to two tenths of a percent. Notably, the price of copper has reached an all-time high, marking the largest spike in 36 years. This surge is partly attributed to the Trump administration's decision to impose a 50% tax on copper imports, a measure aimed at protecting domestic industries (03:54).

Brancaccio adds a light-hearted yet informative note about the composition of pennies, stating, “Pennies turned out are 97.5% zinc” (03:54), underscoring the metal's relevance in the current market dynamics. The increase in copper prices has broader implications for various sectors, including construction and manufacturing, potentially leading to higher costs for consumers and businesses alike.

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Rebuilding in California: Embracing Steel Framing

Wildfire Impact and Rebuilding Strategies

Shifting to Southern California, Brancaccio revisits the aftermath of one of the massive wildfires that began six months prior. The focus is on rebuilding with an emphasis on wildfire resilience and climate change adaptation. Recent statistics indicate that newer houses constructed with steel framing are less likely to succumb to wildfires, offering a sustainable solution for high-risk areas.

Interview with Michael Ferlano of All Metal Framing

In an insightful segment, Brancaccio interviews Michael Ferlano, founder of All Metal Framing in Orange County, California. Ferlano shares, “As soon as the fire started, we started having people reach out to us” (06:34), highlighting the immediate demand for fire-resistant building materials. Homeowners and professionals alike are increasingly seeking steel as a viable alternative to traditional wood framing.

Ferlano elaborates on the benefits of steel, noting that “The studs themselves don't really have a flash point” (07:23), making them inherently more fire-resistant than wood. This reduces the risk of fire spreading through the structural framework of homes.

Economic Considerations and Steel Costs

Addressing the economic aspect, Ferlano explains that while steel framing has traditionally been more expensive—averaging around $75 per square foot compared to $65 for wood—his company’s manufacturing process minimizes waste. By producing studs with minimal material loss, All Metal Framing operates with a sub 1% loss rate, “which makes it so we're hyper competitive with wood” (07:55).

However, recent tariffs have introduced challenges. The import tax on steel has doubled to 50%, increasing costs from approximately 62-68 cents per pound to 91 cents per pound (08:45). Ferlano mentions, “The cost of steel is about 30% of the actual total pricing. So we've seen about a 40% increase in a 30% line item” (08:55), indicating that while the price surge affects material costs, the overall impact on total pricing remains manageable.

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Conclusion

This episode of the Marketplace Morning Report provides a thorough examination of the intersection between climate-induced disasters and public infrastructure, the economic ramifications of government policies on commodity prices, and innovative approaches to building resilient communities. Through expert insights and detailed discussions, listeners gain a nuanced understanding of the ongoing challenges and solutions in managing natural disasters and their economic impacts.

Transcript

[Podcast Host]

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[David Brancaccio]

Investments in public infrastructure I'm David Brancaccio in Los Angeles. More now on flood warning systems with more than 100 people dead and 170 still missing in Texas, experts say the world can expect more catastrophic flooding at a time of human made climate change. And there's evidence shortages at the National Weather Service may have made it harder to coordinate a response when the Guadalupe river rose more than 30ft in five hours. And although there had been flooding before, there was no on the ground alarm system in place, Houston Public Media's Andrew Schneider reports.

[Legislative Analyst]

During Texas regular legislative session, which ended in June, lawmakers considered but failed to pass a bill that would have invested at least half a billion dollars to improve emergency communications infrastructure. That would have included outdoor sirens similar to those used to warn people in parts of Texas of approaching tornadoes. Governor Greg Abbott says lawmakers will take the issue up again in a special session of the Legislature.

[David Brancaccio]

The way to respond to like what happened in Kerrville is going to be a topic for the special session to address.

[Legislative Analyst]

Lt. Gov. Dan Patrick, who leads the Texas Senate, says he's ready to support efforts to improve emergency communications infrastructure. Speaking on Fox News, he calls for flood warning sirens along the Guadalupe river.

[David Brancaccio]

So if the city can't afford it, then the state will step up and we need to have these in place by the next summer. When the next season comes, this could.

[Legislative Analyst]

Be an important shift. The emergency communications bill previously passed the Texas House but failed in the Senate, possibly because of the half billion dollar price tag. That's on top of money lawmakers had already spent on other disaster response equipment. Still, Kerry Stevens, an expert on emergency communications at the University of Texas at Austin warns against relying heavily on one fix.

[Emergency Management Expert]

Technology is not necessarily the only thing we need to solve the problem.

[Legislative Analyst]

Stevens says that notifying people in rural areas of oncoming disasters like flash floods is often a very costly and labor intensive process.

[Emergency Management Expert]

There are ways to communicate that reach a lot of people at once. Some emergency management coordinators directly contact major businesses and organizations who take care of others with emergency updates. Those organizations can reach a lot of people and they're often trusted.

[Legislative Analyst]

It's worth noting that while Texas and other states are considering upgrades to their emergency communications infrastructure, President Donald Trump said last month that he wants to phase out the Federal Emergency Management Agency and shift its responsibilities to the states. In Houston, I'm Andrew Schneider for Marketplace Stock Index.

[David Brancaccio]

Futures are up in the one to two tenths of a percent range now, and the price of the essential metal copper hit an all time high in the last day, the biggest spike in 36 years. This with the Trump administration raising the tax to 50% on copper imports. If you think all your saved pennies can really help with your college fund, think again. Pennies turned out are 97.5% zinc.

[Podcast Host]

This marketplace podcast is supported by Palo Alto Networks. Listen to Threat Vector, the Palo Alto Networks podcast, for in depth discussions with industry leaders and experts providing crucial insights for security decision makers. Whether you're looking to stay ahead of the curve with innovative solutions or understand the evolving cybersecurity landscape, ThreatVector equips you with the knowledge needed to safeguard your organization. Tune in and subscribe to threatvector wherever you get your podcasts.

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[David Brancaccio]

Six months since the start of one of the massive Southern California wildfires. Let's return again to rebuilding with wildfire and climate change in mind. Statistics show newer houses are less likely to burn in wildfires and among the more resistant options framing not with wood studs but with steel. Yet at A time so many are planning to rebuild. Steel prices are up. With the US tariff now at 50%. All metal framing in Orange County, California plans and fabricates the steel sections to build houses. Michael Ferlaino as founder joins us now. Welcome.

[Michael Ferlano]

Ah, thank you very much. How are you doing today?

[David Brancaccio]

I'm alright. One way to take some of the flammable wooden sticks out of rebuilding after a fire is to use what you use. Steel. Mr. Ferlane, are you seeing interest in using steel?

[Michael Ferlano]

As soon as the fire started, we started having people reach out to us. And in the very beginning it was primarily structural engineers and architects. And it was due to the homeowners contacting their development teams and looking for a faster fireproof solution.

[David Brancaccio]

But you're seeing plans now come across your desk for rebuilding residences, single family residences, using steel.

[Michael Ferlano]

Oh, absolutely. All steel framing and all completely panelized.

[David Brancaccio]

So there's a prefab play here. But there's also a fire resistance aspect to this. Right. Nothing's fireproof, but steel can be more fire resistant.

[Michael Ferlano]

The studs themselves don't really have a flash point. So the only way that you start to see the fires actually expand is if the exterior of the house is wrapped in something that's flammable or you end up getting so much heat through the studs that you hit the flash point of the materials on the inside. But the studs themselves, yeah, no, they're completely fire resistant.

[David Brancaccio]

Let's talk a little bit about the economics of this. First of all, before the wildfires six months ago, was it cost effective to build a house using this steel approach?

[Michael Ferlano]

Traditionally, steel framing is more expensive than timber framing on average. In Orange county, it has a tendency to land all in at right around $75 a square foot, where wood traditionally is going to land right around $65 a square foot. The thing that separates us from those numbers is our approach. Because we're manufacturing every stud for where it goes. We don't have waste or droppage. So in traditional framing, you would average anywhere between 10 and 15% material loss just because sticks are coming in a 10 foot section. The ceiling height is eight feet. So we're cutting two feet off of every piece. Where for us we're starting with this 5,000 foot long coil and then that's continuously running through the machines and, and that's what's giving us every stud. So because of that we're at a sub 1% loss, which makes it so we're hyper competitive with wood.

[David Brancaccio]

It's fascinating, but even now with all this demand from the fires. And early last month, the import tax on steel doubled to 50%.

[Michael Ferlano]

Oh, yeah, no, we've definitely been feeling that. We had our last steel order came in in December before the fire started, and we were paying right around 62 to 68 cents a pound, depending on what size we were bringing in and what the quantity was. We're right now paying 91 cents a pound. Fortunately for us, the cost of steel is about 30% of the actual total pricing. So we've seen about a 40% increase in a 30% line item. So it hasn't been too bad.

[David Brancaccio]

Michael Ferlano, founder of All Metal Framing in Orange County, California, thank you very much.

[Michael Ferlano]

Absolutely. Thank you so much. I really appreciate it.

[David Brancaccio]

And in Los Angeles, I'm David Brancaccio. Marketplace Morning report from APM American Public Media.

[Podcast Host]

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[Emergency Management Expert]

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[Legislative Analyst]

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[Podcast Host]

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