Chronic coastal flooding, Coastal real estate market, Global warming, High-risk coastal cities, Sea level rise, Underwater: Rising Seas Chronic Floods and the Implications for US Coastal Real Estate June 2018
Price Reduced Waterfront Property – East Coast USA
Photo Credit: Union of Concerned Scientists (UCS) June 2018 Report
On September 14th, Hurricane Florence hit the North Carolina coast. With warmer oceans driven by climate change, the massive, slow-moving storm dumped more than 20 inches of rain on its arrival. The storm surge reached levels of 9 to 13 feet. Hundreds of inundated home owners may never recover from the damages.
Ten years ago, on September 15, 2008, another kind of disaster struck our nation with the collapse of Lehman Brothers and the insurance giant AIG. The worst financial crisis since the Great Depression sent rogue waves across our nation and worldwide. The fallout—foreclosures, shrinking home values, and millions of job losses—battered Americans.
With rising sea levels—the result of ongoing heating of our oceans and atmosphere—another massive, slow-moving crisis is brewing. Hundreds of thousands of coastal properties will increasingly face chronic high-tide flooding. Their falling property values will threaten local and regional real estate markets that could cascade nationwide into a coastal real estate bust.
“Most homeowners, communities, and investors are not aware of the financial losses they could soon face,” says Rachel Cleetus, Lead Economist and Climate Policy Manager at the Union of Concerned Scientists (UCS) and co-author of the UCS report Underwater: Rising Seas, Chronic Floods, and the Implications for US Coastal Real Estate, published in June 2018.
Using data provided by Zillow, the online real estate company, the report estimates that more than 300,000 of today’s residential and commercial properties in the contiguous United States will be at risk of chronic, disruptive flooding—defined as occurring 26 times or more per year—within the next 30 years.
Within the next 15 years, based on a global sea level rise of 6.6 feet by 2100, about 147,000 existing homes and 7,000 commercial properties—currently valued at $63 billion—are at risk of chronic, disruptive flooding. By 2045—near the end of the lifetime of a 30-year home mortgage issued today—the study predicts that sea levels would affect almost 311,000 of today’s homes. That’s half a million people.
By 2100, the number of today’s residential and commercial properties at risk of chronic flooding would rise to 2.4 million and 107,000, respectively. A whopping 4.7 million people. Lower-value residential properties, across hundreds of blue-collar towns, make up 60 percent.
Chronic flooding impacts property values, eventually becoming worthless on the real estate market. Waves of coastal foreclosures and abandoned homes could result in falling property values even for homes outside the blighted zone. This would shrink local tax revenue. Flooded streets and commercial areas would further erode municipal budgets.
Flooded street during high tide – Miami Beach, Florida – September 2015
Photo Credit: Washington Post (NOAA)
“Property values in most coastal real estate markets do not currently reflect the risk of flooding from sea level rise,” Cleetus says.
In most cases, mortgage providers, real estate agents, and insurers have no obligation to disclose the risks of chronic flooding from sea level rise. Added to this, federal, state, and local policies have created incentives that favor developers, exposing more people and property to risk.
In high-risk communities, homeowners and business investors need resources and information to understand the risk and figure out their options. Updating federal flood risk maps to reflect sea level rise would be a good start.
To read the full report, go to the UCS website.