Debris and rubble are seen after Hurricane Michael hit in MexicoBeach, Florida, in Friday, Oct. 12, 2018. Search-and-rescue teamsfound at least one body in Mexico Beach, the ground-zero townnearly obliterated by Hurricane Michael.. (Photo: ZackWittman/Bloomberg(

Developer Jeff Lamkin knew the risks when he paid $250 millionfor 63 acres of an island off the Texas coast. But he saw onlyupside in the quaint little beach town of Port Aransas.

Over the next 10 years he built Cinnamon Shore, avillage of luxury vacation homes fortified by the latest hurricane-proof construction methods.Then Hurricane Harvey blasted ashore, leaving behind$125 billion of devastation along the Texas coast. It was the testevery coastal investor dreads. But Cinnamon Shore passed withflying colors.

“To the left of us and to the right of us was totaldestruction,'' Lamkin said. “But we had better construction, and sowe just held up really well.''

Developers say it's worth the potential costs

At a time when climate change is being linked to the rise ofmonster storms, Cinnamon Shore helps explain why real estatedevelopers are still willing to thumb their nose at Mother Nature,with residential sales along the Gulf Coast increasing 60% over thelast five years — almost twice the rate of the nationoverall, according to Attom Data Solutions.

Panama City, Florida, ravaged by HurricaneMichael last month, is the latest example of the potentialcosts, yet developers like Lamkin still say it's worth it.

Vacation beach towns like Port Aransas and Panama City are increasingly dependent on newbuilding methods to protect against catastrophic storms. Asolder structures get wiped out, they're replaced by strongerconstruction that cushions against the next disaster, emboldeningdevelopers to keep investing.

Buyers are on track to sink about $2 billion into Gulf Coasthomes this year, based on the mean selling price, according toAttom Data. That would be up from $1.8 billion last year, and a12-year high.

Rising insurance rates passed along to buyers/renters

Developers aren't deterred by rising insurance rates, which arelargely passed along to buyers and renters, or by more expensivebuilding requirements. Higher costs have simply “forced moreexpensive development” on the coast, said Charles Watson, adisaster modeler with Enki Research in Savannah, Georgia.Increasingly, coastal beach towns cater to the vacationers who canafford it.

A year into Port Aransas' recovery from Harvey, Cinnamon Shoreremains Lamkin's most successful beachfront venture, with “solidreturns on every level,'' he said. This year will go down as theproject's best yet, with $40 million in sales for homes rangingfrom $750,000 to $3 million.

Second $1.3B beachfront vacation community underconstruction

On Oct. 5, Lamkin's Sea Oats Group broke ground on a secondresort in Port Aransas — a $1.3 billion vacation communityon 300 acres of sandy beachfront.

After last month's Hurricane Michael, Florida's storm-wreckedpanhandle beach towns can look to Port Aransas for a glimpse ofwhat their future might hold a year from now.

Related: People — and cities — are makinghurricanes worse, research shows

Chamber of Tourism president Jeff Hentz, 57, had only been inhis job for eight months when Harvey blipped onto the radar screenand started heading for Texas. After a career bouncing between NewYork and Florida promoting destinations from Walt Disney World toYosemite National Park, Port Aransas had seemed like the perfectplace to settle down.

“Port A,'' as he calls it, was an under-developed beach townwithin driving distance of 28 million Texans in the middle of abooming economy. Even Florida's coast and New York's Hamptonsdidn't have that kind of consumer base.

Hurricane Harvey comeback story

With South Texas' warm winters, Hentz envisioned a year-arounddestination where vacationers could escape to a more authentic,laid-back beach vibe. Sports tournaments, business conferences andfestivals could fill the gaps. Once he saturated the Texas market,he could reach out internationally to Australia and Asia.

When Hurricane Harvey zeroed in, demolishing homes, restaurants,businesses and even Hentz's own office, it washed away all thoseplans — at least temporarily. Hentz shifted his attentionto raising $2.5 million in public and private funds to speed therebuilding of Port A. He quickly formed a new plan:

“This is going to be the greatest comeback story of all time,”he resolved.

Related: The untold story of Hurricane Harvey wind damage:12 key findings

It seemed unlikely at the time. Town residents who fled beforethe storm returned to eerily quiet streets. The air was heavy withthe stink of seaweed and saltwater. Boats from the harbor had beentossed around like toys. Palm trees were bent in half and cemeterygravestones broken. Even structures that remained standing had tobe gutted, with debris piling up into a four-story high heap localscalled Mount Harvey.

Rebuilt stronger

Mayor Charles Bujan, 74, had been through several hurricanesduring his lifetime. He remembered Carla in 1961 and Camille in1969. But it's Harvey that brings tears to his eyes. He estimatesthe storm wrought as much as $1 billion in damages to the smallisland.

“This one was a monster,” he said, leaning back in the officechair where he slept during the weeks after the storm hit.

Related: Devastating storms seen spurring action on disasterpreparation

Bujan surrounds himself now with storm memorabilia. A hand-drawnmap of Harvey's path hangs on the wall. A scrap of paper is tapedto his clock recording Harvey's landfall: “8/26/17, time 0307.”

And on his desk sits a wooden carving of the word“strong” — the way Port A sees itself now. Amid thedevastation, residents found an opportunity. Many buildings weredestroyed, but they've been rebuilt stronger to help withstandfuture storms.

Making improvements

The RV campground Bujan operates was trashed, which he says gavehim the chance to make improvements he'd long been wanting.

After the storm, local business owner Bron Doyle rebuilt hiskaraoke stage and concession stands and refurbished his fleet ofrental golf carts. The whole town is getting an upgrade, he said.“A lot of things that got destroyed are better.”

The idea of recovery was daunting at first. Tracy Ellwood, a53-year-old manager at Moby Dick's restaurant, said her friends andfamily rely on local businesses for their livelihood. “The sooneryou fix things and get going, the sooner everybody can get back towork and start to live again,” she said.

Related: Latest climate threat for coastal cities: more richpeople

Hentz is still working out of a 60-by-24-foot trailer, but hisideas are back on track. Even with just half of the town's 4,000hotel rooms and vacation rentals re-opened, Port Aransas recorded3.5 million visitors so far this year, down from 4.5 million theyear before. Next year, he's targeting a new convention centerfollowed by a sports complex, launching the town past 10 millionvisitors by 2025.

Right building techniques = profitable coastal real estateinvestment

The Palmilla Beach Resort, started by San Antoniobillionaire Red McCombs in 2014, is again filled with vacationers.Its newly established neighbor Sunflower BeachResort, remains on track for development with no visible scarsfrom the storm.

Two miles away at Cinnamon Shore, sales started picking back upjust six weeks after the storm, Lamkin said. For the 140 structuresthat weathered the storm, only 20 suffered enough damage forhomeowners to even file insurance claims.

For Lamkin, Hurricane Harvey was a proof of concept: that withthe right building techniques — like doors and windowsthat can sustain 130 miles-per-hour winds, steel rods and strapsthat tie down the roof, and base floors elevated above floodlevels — it's possible to invest profitably in coastalreal estate.

Before Harvey, he says, he believed in the hurricaneconstruction codes in theory. “But now I really believe inthem.”

Related: Storm-prone states ease off building codes asclimate risk grows

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