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February 26th, 2010

How Much Does a Snow Storm Cost?

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Here in the Northeast — for HSH.com, Northern New Jersey specifically — we have one thing on our minds: snow. With a snow storm as major as the one that has blanketed our area — some reports say as much as two feet of snow has fallen in the past two days — “normal” routines and productivity can come to a grinding halt.

Offices are closed, the kids’ schools are closed, and programs and events are cancelled. Yet, while many of us are digging out our cars and shoveling our sidewalks (and perhaps doing a little relaxing — only if you’re lucky), others are working around the clock, plowing our streets and salting the roadways.

While some look out their windows and see picturesque white flakes falling from the sky, state and local officials see their budgets melting away.

So, how much does a snow storm cost? In a matter of hours, some experts say a heavy snow can cost into the billions:

…there is also no doubt there is a cost to the economy, and it is likely to be measured in the billions. “We will get up in the billions in a snap,” says Scott Bernhardt, chief operating officer at Planalytics, a Wayne, Pa., firm that forecasts weather for businesses, rolling off some of the larger effects of the storms: $100 million a day in lost government productivity, millions of dollars in municipal plowing and overtime expenses, as well as lost sales.

One of the larger costs that won’t get made up is the municipal expense for plowing the snow. In New York, for example, it costs the city an estimated $1 million per inch. In [a recent] snow storm the city got 10 inches.

Washington Mayor Adrian Fenty has already asked the federal government to help with the cost of snow removal in his beleagured city.

“We used up the snow budget in the first storm in December,” says [Newark, Delaware] Mayor Vance Funk III. “We usually budget based on the average snowfall for the last three years and the total snow in the last three years equaled what we had in December.”

The massive winter storm that buried Washington, D.C. a few weeks ago shut down Capitol Hill for the better part of an entire work week. That “snowcation” was estimated to cost taxpayers nearly $400 million dollars.

Beyond Budgets

The cost of a snow storm is felt in more ways on the state and local level than merely depleted budgets. While the experts say the financial impacts of winter weather tend to only be temporary, the overall economic impact is widespread:

Of course, in a $14.5 trillion economy, a few billion dollars won’t make that much difference. “We will probably see it in some monthly numbers, such as retail sales, or even some weekly numbers, like the new claims for unemployment, since you can’t apply when the office is closed,” says Mr. Wyss.  

READERS: How is this snowy winter costing you more than usual?

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2 Responses to “How Much Does a Snow Storm Cost?”

  1. Mitch Says: February 28th, 2010 at 2:51 pm

    I’ve heard people poo-poo large snowfall amounts in cities across the country, saying it’s much better than fire, tornadoes, etc. That may be somewhat true, but the thing about snow is that it usually takes out a much larger area when it’s really heavy. For instance, this last storm pretty much took out the entire East Coast; not even a hurricane can do that.

    And on Friday, even an area like Syracuse, which is used to lots of snow, had issues because this was a wet, heavy snow, and we already had lots of snow on the ground, which meant there was nowhere else to put this new stuff. Many people in the city didn’t get their neighborhoods plowed out until the afternoon; luckily, I live in the suburbs, so our main roads were taken care of very early. But if we hadn’t had a guy next door with an industrial strength snowblower, we weren’t leaving the house until much later in the day ourselves because it was much heavier than normal. So, it’s easy to imagine just how many businesses were affected.

  2. Tim Manni Says: March 1st, 2010 at 10:44 am

    Hey Mitch,

    Yea, wow was this latest snow storm heavy! I hear you about how great of an area a bad snow storm can cover, but let’s be thankful that this stuff melts. Finding a place to put the snow is definitely the new problem. Despite being a temporary inconvenience, if you’re stuck at home for a couple of days, that’s a couple of days that your not spending, driving, etc…bad for local bizs.

    Good hearing from you, and cheers to snowblowers!
    -Tim

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HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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