Last October, Hurricane Michael slammed the Florida panhandle with 155 mile per hour (mph) winds. Mexico Beach was largely destroyed, except for one exceptional, and now much reported on, house called the Sand Palace. Does it offer a guide for building for the future?

Strengthening buildings to reduce damage from natural disasters is called mitigation, and is a topic I have researched. I can’t tell anyone how much they should spend to strengthen their home, but I can help you think about this question.

Engineers can design buildings to pretty much withstand nature’s extremes.  The Sand Palace was built to withstand 240 mph winds. It is built on 40-foot pilings with one foot thick concrete reinforced walls. Steel cables anchor the roof.Florida’s 2001 building code requires construction to withstand 120 mph winds, and existing homes were not required to be brought up to the code. The Sand Palace was built to survive a hurricane like Michael, while surrounding structures were not.

How much extra did the hurricane-proof design cost?  Owners Lebron Lackey and Russell King of Tennessee think that it added 15 to 20 percent to the cost.  Let’s round up and say 20 percent. The 20 percent is added “only” to the cost of the structure, not total property value. The home for a $700,000 listing might only cost $400,000, so the added cost would be $80,000.

The full cost of mitigation, though, exceeds $80,000. Hurricane-proofing altered the Sand Palace’s design, reducing the number of windows, scrapping a planned balcony, and only a small roof overhang.  The design diminished the enjoyment provided by the residence and is part of the cost.

Still, spending $80,000 to prevent destruction of a $400,000 home (and protect the contents and residents) sounds like a good deal. Especially if we knew the home would be struck by 155 mph winds within a year of construction. Yet hurricanes as powerful as Michael, rated at the very top of Category 4 of the Saffir-Simpson hurricane wind intensity scale, are rare. Only three highest-rated Category 5 hurricanes have hit the continental United States since 1900, with only Camille striking the Gulf Coast.

The Sand Palace’s engineering primarily prevents destruction from a really powerful hurricane. Yet since World War II, only two parts of the Atlantic and Gulf coast have experienced winds stronger than Michael’s. Spending $80,000 to prevent a disaster likely to never happen is less attractive.

Timing also matters. While the return on the Sand Palace’s construction occurred within a year; the owners might have waited 50 years for a Michael-type storm to hit. Time is money. The money invested in mitigation, if invested in stocks or real estate, could easily have yielded enough money to replace the home after a monster hurricane fifty years in the future.

Valuing mitigation involves even more details. The design will likely reduce losses from weaker hurricanes, storm surge, and tornadoes. We would also need the exact cost of hurricane-proofing for homes of different sizes and designs plus hurricane landfall probabilities by Saffir-Simpson category.

The calculations can only tell if the investment is worthwhile given all the assumptions made. The value of mitigation depends on how we value protecting ourselves, our loved ones, and our possessions. Two people can reasonably disagree about whether a hurricane-proof design is worth the cost.  Neither is wrong, because the values are personal.

This is why building codes, I think, provide a poor way to encourage natural hazards mitigation. Building codes don’t encourage; they force everyone to build to the specified level of wind resistance. Mr. Lackey and Mr. King decided that the Sand Palace’s resilience was worth the cost, and many others will likely follow their example. Yet Florida’s 120 mph building code likely already makes many homeowners spend more on mitigation than they desire.

Just because we can build homes to resist the strongest hurricanes does not mean that we should. No single level of protection is right for everyone when the values at stake are personal. 

Daniel Sutter is the Charles G. Koch Professor of Economics with the Manuel H. Johnson Center for Political Economy at Troy University and host of Econversations on TrojanVision.  The opinions expressed in this column are the author’s and do not necessarily reflect the views of Troy University.