Commercial Real Estate Investors and Developers Need to Consider Sea Level Rise Flooding Risk

Sea level rise is impacting public lands and residential and commercial real estate. Just as residential real estate investors need to consider the threat of sea level rise flooding, commercial real estate buyers and owners need to keep on top of it, too.

A recent article (“What CRE Execs Need to Know About Sea Level Rise and the Law”) written by Anca Gagiuc and published by CommercialSearch.com — a multiple listing service for commercial real estate — takes a detailed look at what commercial real estate buyers and owners should consider when they’re deciding how to proceed in coastal communities. In the article, Gagiuc interviews Emily Lamond who works in the environmental department at the Cole Schotz law firm.

Lamond says that commercial developers are already responding to sea level rise by raising land elevation, buildings, roads and critical infrastructure. Renters, buyers and mortgage providers are also interested in buildings that can resists or withstand sea level rise flooding.

Other issues explored are who has liability if a property is flooded and damaged to the point that it is essentially totaled. Lamond says typically the owners are responsible for demolishing and removing damaged buildings. She recommends that owners review their insurance policies to see what’s covered in this situation and also prepare for the possibility of unexpected costs.

Lamond touches on several other points that commercial and residential real estate buyers and owners should consider when evaluating property located in coastal communities threatened by or currently experiencing sea level rise flooding. The entire interview is definitely worth a look.

Latest UN Climate Change Report is Bad News For Real Estate Threatened by Sea Level Rise and the World in General

The Unite Nation’s climate science panel released a report this week that was bad news for real estate subject to sea level rise, wildfires, drought and other environmental threats tied to global warming.

Researchers found that humans continue to burn more and more fossil fuels, which releases ever-increasing amounts of greenhouse gases, at a time when we need to drastically reduce output. At the current rate of emissions, we’re set to blow through the 1.5 degrees Celsius temperature increase limit past reports set for this century. We’re headed for 3.2 degrees Celsius. At this point, even if nations realize their past greenhouse gas emissions reduction targets, the world would still see 2.2 degrees or more of warming.

The National Oceanic and Atmospheric Administration recently released a report that estimated US coastal cities and towns would see an average of a foot of sea level rise between now and 2050. That estimate was based on 1.5 degrees Celsius of warming. If the globe warms much faster than that, the ocean will expand much faster and glaciers and ice sheets primarily in Greenland and Antarctica will melt faster contributing to faster and greater than predicted sea level rise.

U.S. coastal communities and private real estate owners are already spending billions of dollars to fend off sea level rise-driven floodwaters. They’re building and raising seawalls, installing pumps to remove floodwater, elevating land, homes, and government and commercial buildings, and hardening and/or elevating infrastructure, such as roads, sewer and water pipes and underground energy and communications equipment. If humans don’t drastically reduce their reliance on fossil fuels — such as coal, oil and natural gas — these projects won’t be enough. Last-resort measures such as managed retreat — property buyouts in flooded areas — will increasingly become the norm.

Faster and higher sea level rise will not only lead to more frequent tidal flooding of vulnerable coastal areas, it will also result in more powerful storm surges being driven further inland. All together, this will apply incredible pressure on the already strained insurance and mortgage markets in coastal communities.

UN report researchers say we need to cut all greenhouse gas emissions in half by the next decade. The best way to do this is by relying more heavily on renewable energy sources, such as solar and wind power. Improving energy efficiency in homes and businesses and energy conservation practices also play an important role.

Fortunately, these goals are within reach. For example, the cost per unit of solar energy is 85% less than it was in 2010. The cost per unit of wind power is 55% cheaper.

The X factor in all of this is our political will and personal commitment to changing our habits to achieve these objectives. The world’s nations have been less-than-honest about the efforts and results they’ve achieved so far in the fight against climate change, global warming, and sea level rise. Not being forthright with the facts is dangerous for us all. The simple fact is when we gaslight Earth, we’re the ones who get burned. The planet’s chemistry and physics are well-established, and the its rules can’t be broken without resulting in a world that is inhospitable to human life.

UN scientists say we have a very narrow and quickly closing window of opportunity to fend off the worst case global warming scenario. Each and every one of us has a role in preventing that outcome.

Survey Reveals Why Coastal Real Estate Buyers Don’t Take Sea Level Rise Seriously

Despite the threat sea level rise poses to coastal communities, buyers continue to line up and pay ever-higher prices for properties located in at-risk areas. Why don’t real estate buyers take sea level rise flooding into account when they’re purchasing coastal real estate? Risa Palm, senior vice president, provost and professor of urban geography at Georgia State University, and Toby Bolsen, a political science professor at the same school, surveyed 680 Florida Realtors in 2020 to find out.

In an article published last week on The Conversation website, Palm and Bolsen shared the results of their survey. They found that buyers in general aren’t considering a property’s risk of sea level rise flooding for the following reasons:

1. Mortgage lenders and appraisers aren’t considering sea level rise risk when they evaluate a property so homebuyers aren’t paying a penalty for buying at-risk properties.

2. Wealthier buyers who pay cash can self-insure so they don’t feel the bite of higher flood insurance premiums.

3. Wealthier buyers can take the steps necessary — such as elevating property and building seawalls — to fend off sea level rise floodwaters.

4. Retired buyers are ok with enjoying coastal property for the remainder of their lives and not worrying about what sea level rise does to it after they’re gone.

Only a tiny number of the agents reported that prices were “very frequently” holding steady or falling due to the risk of flooding and that lenders were frequently denying loans to properties located in flood-prone areas. Ultimately, 70 percent of the agents said “they expect little impact on the property market in the next five to 10 years.”

Palm and Bolsen believe coastal real estate buyers are making a mistake in not taking sea level rise into account when they’re purchasing properties. They write: “Because of rising sea levels and storm risks resulting from climate change, we conclude that many of the houses currently being sold in south Florida will not outlast their 30-year mortgages without damage or expensive adaptations, and that the resale of houses vulnerable to sea level rise is very likely to become increasingly difficult.”

Hopefully, their message will be heard.

Study: Will The Wealthy Displace Working Class Residents From Their Traditional Inland Neighborhoods When Sea Level Rise Floods Coastal Real Estate?

Sea level rise flooding, like all natural disasters, tends to harm the people who can least afford it the most. In many cases, low income residents tend to own coastal real estate that isn’t well-protected from rising seas and they may be forced by high costs to go without flood insurance. A new study released this week concluded that low income residents inland from the coast could also face extreme hardship as wealthier coastal real estate owners are forced to abandon their properties and move inland.

The study, titled “Addressing Climate Driven Displacement: Planning for Sea Level Rise In Florida’s Coastal Communities and Affordable Housing in Inland Communities in the Face of Climate Gentrification”, was produced by The Leroy Collins Institute at Florida State University. Researchers operated on the assumption that the day will arrive — likely toward the end of this century — when investing in expensive infrastructure — such as elevating properties and installing pumps — will no longer be enough to save sea level rise-inundated coastal properties. When this happens, they predict that higher income coastal residents will move inland to the higher elevation areas now inhabited by working class Floridians.

As they do this, lower income residents will “face increasing pressures to relocate, either voluntarily (eg. selling their homes and businesses) or involuntarily (eg. being evicted for redevelopment projects or unable to afford increasing rents). Experts refer to the process of the wealthy forcing out working class residents as “climate gentrification”.

The study’s researchers said they examined the issue to see if Florida communities are preparing for this type of population displacement. What they found is that with coastal displacement more likely to occur later in this century, local governments aren’t doing anything now to address the inequity that will likely occur when wealthy real estate owners begin to move inland from the coast. They’re calling on “Florida’s policy makers, planners, public officials, advocates, and developers (to) lay the groundwork for a more equitable transition to a new reality imposed by climate change and sea level rise.”

In their conclusion they write: “Florida’s coastal communities can buy time before coastal displacement is overwhelming and shore up policies and investment in lower income neighborhoods to minimize future displacement through gentrification there. It is an imperfect solution to an insurmountable problem, but it reduces the pace and scale of the disruption and reduces the harm faced by those who are likely to suffer most.”

As a resident of South Florida, I’m already seeing gentrification taking place, not due to sea level rise, but due to wealthy northerners’ insatiable hunger for South Florida real estate. The city I live in is upgrading the infrastructure in traditionally working class neighborhoods located inland not to protect the affordable housing there but to make it easier for developers to purchase properties and build higher end housing there. Lower income property owners forced to compete with the wealthy in this situation are also made more vulnerable to displacement by property taxes that rise as their real estate appreciates, escalating insurance costs, and general inflation for things like home maintenance, food and utilities.

This harsh reality makes it easy to imagine that climate gentrification will become a reality when coastal areas can no longer be defended from sea level rise flooding. The researchers state in their report that they’re not sure there’s the political will present to protect the working class from being displaced. From what I’ve seen, it doesn’t exist and certainly not on the scale that’s needed. It will be interesting to see if the will to protect the working class — who are needed for a healthy economy — develops as lower income residents are increasingly displaced by people moving here from out of state. If it does, it may increase the odds of a more equitable retreat from the coast due to sea level rise in the coming decades.

Buyers, Sellers & Real Estate Agents Don’t Always Agree On Managed Retreat from Sea Level Rise Flooding

When it comes to sea level rise mitigation efforts, buyers’, sellers’ and real estate agents’ interests are often in conflict.

Buyers need access to accurate information regarding the threat sea level rise flooding poses to a property of interest and the community in which it’s located. Sellers don’t necessarily benefit when buyers have access to this information because it can cause their property values to drop. And real estate agents want a dynamic market that delivers commissions, which isn’t guaranteed in an at-risk community. Clearly, when sea level rise flooding is present or poses an immediate threat to a property, neighborhood or entire coastal community, all three interests can’t be served.

Alix Spiegel, a producer for Chicago Public Media’s This American Life, recenlty explored these conflicting interests in the city of Pacifica, California. Her report, titled Apocalypse Now-ish, describes how sea level rise has amplified wave action against the city’s sandy cliffs, causing the loss of at least 31 homes and three apartment buildings to date. With the cliffs continuing to collapse, many more homes are at risk in what Spiegel described as “A surreal horror movie in extremely slow motion.”

In 2018, the California Coastal Commission asked coastal communities to study the threat sea level rise flooding posed to them and describe what they planned to do about it. The options included elevating houses, building seawalls, and managed retreat. The last option, managed retreat — in which the government purchases homes under threat and usually demolishes them because it’s cheaper than repeatedly rebuilding them and providing road maintenance and utilities — set off a firestorm in Pacifica.

According to Spiegel’s report, the public was extra agitated by misinformation from a Realtor’s organization that told them the state would require homeowners to pay to destroy their homes and have the rubble removed. The producer makes it clear that it’s against state law to require this. A Realtor spokeswoman stands by the misinformation, however, claiming there’s no way the state will have enough money to purchase all the homes at risk in Pacifica and other communities experiencing sea level rise flooding.

Ultimately, the conflict comes to a head when Pacifica replaces a mayor Spiegel says isn’t a “firebrand” for managed retreat with one who opposes it. Under the new mayor’s leadership, the city removes mention of hazard areas and states its opposition to managed retreat in the report filed with the California Coastal Commission.

Property buyouts under managed retreat plans have taken place for years in many coastal states and are actually accelerating as sea level continues to rise. They’re most common in areas that have experienced a natural disaster that destroys property and puts the next line of structures at risk.

This American Life’s report clearly illustrates the conflict between buyers, sellers and real estate agents. There is no easy way to resolve it.

When making what’s typically the most expensive purchase of their lives, buyers clearly need to know if a property of interest is in a hazard area at-risk for sea level rise damage. When that information is not available, they may unwittingly overpay for a property that’s under threat of destruction or that may suffer depreciation in value because it’s in or near a threatened area. To avoid this negative outcome, buyers need to make sure they research how sea level rise is impacting a property of interest, neighborhood or community. Seller’s disclosure laws vary greatly from state to state so relying solely on them is a big mistake.

Sellers, on the other hand, have a valid point when they complain that the mere mention of that their property is in a hazard area or could be subject to managed retreat will hurt their property value. The challenge for them is that unless their property is experiencing sea level rise flooding or in close proximity to it, they don’t always know exactly when it will impact their property value. Here, too, smart sellers need to keep up-to-date on the latest sea level rise developments in their communities and consider selling before it impacts their property values. They also need to know how their government plans to cope with sea level rise flooding as taxes and insurance rates could spike. There’s also the danger that insurers and mortgage providers will one day stop offering their services to their neighborhood which will make selling their property nearly impossible.

Realtors (not all real estate agents are Realtors) are walking a real tight-rope on this issue. Their code of ethics requires them “to treat all parties honestly”. How they’ll be able to do this if, as in Pacifica, they don’t want buyers to know that structural engineers determined a home is located in a neighborhood that’s designated as a special hazard area that could lead to properties being damaged or losing value due to sea level rise doesn’t quite live up to the ideal. They clearly shouldn’t be in the business of pressuring coastal cities and towns to sweep sea level rise facts under the rug, which gives buyers and sellers a false sense of confidence that a property of interest is safe from the threats posed by sea level rise.

The take-away in all of this: With hundreds of thousands of homes and buildings worth billions of dollars at risk of sea level rise flooding between now and the end of this century, buyers and sellers have to conduct due diligence to protect their financial futures when they’re involved in real estate located in coastal communities.

New CO2 Emissions Record is Bad News for Sea Level Rise and Real Estate

A few weeks ago, the National Oceanic and Atmospheric Administration (NOAA) released a startling report that predicted the US coastline would see on average a foot and up to 18 inches of sea level rise by 2050. The agency said the next 50 years of potential sea level rise after that will be heavily influenced by the amount of fossil fuels — coal, oil, and natural gas — that’s burned, releasing carbon dioxide (CO2) into the atmosphere and causing it to continue warming up. This week, the long-term sea level rise outlook took a turn for the worse when a report was released that said the world reached a record for CO2 emissions in 2021.

The International Energy Agency (IEA), an autonomous intergovernmental organization that helps countries shape energy policies, analyzed public and private energy and economic data to reach the conclusion that “global energy-related carbon dioxide emissions rose by 6% in 2021 to 36.3 billion tonnes, their highest ever level”. The IEA blamed the increase in CO2 emissions on the global economic recovery from the Covid-19 crisis and an increased reliance on coal when the price of natural gas spiked.

The IEA said in a press release that the “world must now ensure that the global rebound in emissions in 2021 was a one-off and that an accelerated energy transition contributes to global energy security”.

The recent NOAA report explained why reducing, not increasing, emissions is critically important to coastal communities. The report said: “About 2 feet (0.6 meters) of sea level rise along the U.S. coastline is increasingly likely between 2020 and 2100 because of emissions to date. Failing to curb future emissions could cause an additional 1.5-5 feet (0.5-1.5 meters) of rise for a total of 3.5-7 feet (1.1 – 2.1 meters) by the end of this century.”

It’s important to note here that the government researchers admitted that they’re still not exactly certain what impact sudden changes in glacial ice melt in Greenland and Antarctica could have on sea level rise in the decades to come. An ice shelf collapse that results in a sudden release of land based-glaciers into the ocean in Antarctica or a rapid acceleration in the melting of land-based snow and ice in Greenland could lead to a faster than predicted increase in sea level rise.

The bottom line here is that if humans don’t radically cut back on the release of CO2 and other greenhouse gases into the atmosphere, all of the sea level rise predictions could turn out to be dangerously conservative. The first one foot of human-driven sea level rise is costing coastal communities — and residential and commercial real estate owners — billions of dollars to repair flood damage and prevent additional damage. The next foot of sea level rise in the next 30 years will certainly compound the problem. Add more on top of that and a lot of coastal real estate will become uninhabitable.

After Russian Attacks and Seizures of Ukrainian Nuclear Power Plants, is Nuclear Energy Still A Viable Global Warming Solution?

In recent years, some environmentalists and environmental groups (read this New Yorker article for a list) have enthusiastically embraced nuclear power plants as clean energy sources that will help us in the fight against climate change, global warming, sea level rise, and other climate-driven natural disasters. Watching a Russian tank fire at the Zaporizhzhia Nuclear Power Plant in Ukraine last week — an event that nuclear experts warned could have resulted in a meltdown at the facility and the release of dangerous amounts of radiation into the environment — I couldn’t help but wonder if nuclear energy is still a viable clean-energy option.

Russian shells fired at the six-reactor Zaporizhizhia Nuclear Power Plant, the largest in Europe, Thursday night set fire to a training building next to the plant. Fortunately, operators at the plant were able to shut down most of the facility’s reactors and stabilize the site without incident, but the threat clearly isn’t over. News reports say since Russian forces took over the power plant, the staff there are working under extreme stress with limited contact with the outside world. In addition, Russian forces have also taken over a second nuclear power plant and are moving toward a third.

These developments demonstrate that no matter how safe some environmentalists and environmental groups may consider nuclear power plants, the truth is they are clearly not benign and indestructible. In the last 35 years, two of the worst nuclear accidents in history already demonstrated this fact.

After human error led to the 1986 meltdown at the Chernobyl Nuclear Power Plant in Ukraine in 1986, so much radioactivity was released into the atmosphere that 39,000 square miles of land — mainly in Ukraine, Belarus and Russia — was contaminated with fallout. In 2011, a tsunami inundated the Fukushima Daiichi Nuclear Power Plant and caused three nuclear meltdowns that forced the evacuation of 154,000 residents in a 12 mile radius around the plant. Containing the site could take up to forty years.

Nuclear reactors aren’t the only threat to the environment, either. Nuclear waste, too, poses an environmental threat. Typically highly radioactive byproducts of nuclear power generation are stored on-site where they could be disturbed by natural disasters, war, terrorists and operator errors.

Before the Russian attacks against the Ukrainian nuclear power plants, nuclear power boosters insisted that when you weigh the damage nuclear reactors inflict on the environment against the damage that burning oil, coal and natural gas are now causing, nuclear power is the best option to allow us to cut back on the use of climate-warming fossil fuels without seriously damaging the world economy. It’s still too early to see if they still take this position after witnessing how easy it was for the Russian military to attack and seize the Ukrainian nuclear power plants at great risk to the environment.

Public opinion, too, will play a role in the future of nuclear power. Before the Russian military took control of the Ukrainian nuclear power plants, Americans were split almost evenly in their support or opposition to nuclear power. The outcome of Russian military control of Ukraine’s nuclear power plants will certainly influence the level of support for nuclear power and its future in the fight against global warming.

While the future of nuclear power is sorted out, it’s clear that we need to invest massive amounts of capital and brain-power in the development of truly safe and clean renewable energy sources, such as solar panels and wind turbines, to combat climate change. Conservation will have to play a role, too.

New Miami-Dade County Law Makes it Easier for Buyers to Evaluate Condo Building Maintenance and Reserves

The tragic collapse of a the condo building in Surfside, Florida, that claimed 98 lives continues to force changes in the way real estate is bought and sold all across the country. This month, Freddie Mac and Fannie May, the quasi-government organizations that back many of the nations mortgages, began requiring condo associations to answer detailed questionnaires about a building’s maintenance, repairs, and reserves to determine overall safety and financial soundness as part of the process lenders use to evaluate mortgage applications.

On Tuesday, the Miami Dade County Commission took transparency a step further and unanimously passed a new law requiring condo and homeowner’s associations to file detailed financial and maintenance records for inclusion in an online library. Currently, Florida real estate law requires sellers to provide buyers with these documents only upon request AFTER a sales contract is executed. The buyer is then given three days from receipt of the information to cancel the contract if they don’t like what they see.

Some real estate agents told the Miami Herald they’re relieved that the new database is being created. They complained that condo associations and homeowners associations often made it difficult for sellers and buyers to access the relevant documents and too often they were delivered incomplete.

One potential shortcoming of the law is that the associations are only required to file the documents on an annual basis, which leaves the possibility that the information will be outdated by the time a buyer receives it. This could lead to a buyer not being aware of such critical information as a costly special assessment that is under review or approved since the last annual filing. Note to Buyers: Still request the latest condo docs and financials when conducting a review.

Overall, the move toward greater transparency regarding real estate is a huge plus for buyers and owners, especially when sea level rise is already causing maintenance and funding challenges for condo developments located on or near the coast. Regardless of a coastal state’s laws, buyers everywhere need to take a look at condo association and homeowner’s association documents and financials before they commit to close a deal.

UN Report Warns Climate Change Threatens Not Only Sea Level Rise Real Estate but Human Survival Itself

“The scientific evidence is unequivocal, climate change is a threat to human wellbeing and the health of the planet. Any further delay in concerted global action will miss a brief and rapidly closing window to secure a liveable future.” — Hans-Otto Portner, Co-Chair of the United Nation’s Intergovernmental Panel on Climate Change

The Intergovernmental Panel on Climate Change (IPCC), a United Nations’ group that assesses the science related to climate change, issued a dire warning for humanity regarding climate change today. “To avoid mounting loss of life, biodiversity and infrastructure, accelerated action is required to adapt to climate change, at the same time as making rapid, deep cuts in greenhouse gas emissions,” the IPCC said in a media release. “So far progress on adaptation is uneven and there are increasing gaps between action taken and what is needed to deal with the increasing risks.”

The IPCC report is attractive massive media coverage not only for its strong wording but because of the urgency of its prediction that humans don’t have much longer to reduce the amount of fossil fuels — such as coal, oil and natural gas — it burns before it reaches a tipping point.

Businesses are taking notice. A Reuters article published today says governments and regulators are just starting to issue rules that require companies to alert investors to the impact climate change is having on their operations today and the threats they’ll face in the future.

Coastal real estate buyers, owners and investors, too, need to start gathering facts about the risk sea level rise poses to a property of interest and the neighborhood and community its located in. To make educated decisions, they need to know information such as if a property is currently experiencing sea level rise flooding, if it will in the near future, if roads and other critical infrastructure that serve the property are being impacted by flooding, and what the local government intends to do about it. They also need to know if the homeowner’s association or condo board, if there is one, plans to do to address sea level rise.

These types of questions will help them to gauge the impact sea level rise will have on maintenance and insurance costs, tax rates, association dues and special assessments, and, ultimately, property value. It will also give them an idea if there’s a threat that insurers and/or mortgage providers will stop providing policies and loans in a given area.

This might sound far-fetched to some people. But, just this month, Fannie Mae and Freddie Mac announced a policy that they would not back mortgages in condo developments that weren’t properly maintained and that didn’t have the reserves to pay for routine and emergency maintenance. As sea level rises and damages more coastal real estate, it’s a good bet lenders will get tougher in approving loans in areas experiencing property-damaging sea level rise. This will impact the ability buyers to buy properties and of owners and investors to sell them.

While sounding negative, the IPCC report will actually have a positive effect if it spurs governments, businesses and individuals to get involved in the fight against climate change and global warming before the window of opportunity closes for good.

What Does a Foot or More of Predicted Sea Level Rise Mean in Real Real Estate Terms?

The foot or more of sea level rise government scientists recently predicted coastal cities and towns will see by 2050 doesn’t sound like much, especially if you live in a community that isn’t being impacted by the first foot of sea level rise that’s accumulated in the last hundred years. To people who own real estate located in areas that are now experiencing sea level rise flooding and those in the red zone targeted by the next foot, it’s a huge deal. I live in South Florida, and I’m witnessing firsthand what sea level rise flooding can do to a coastal community.

The Union of Concerned scientists predicted that an additional foot of sea level rise will put 140,000 homes at risk of flooding every other week. This means coastal cities and towns are going to have to step up their efforts to fend off floodwaters by, among other things, building higher seawalls, installing pump systems, elevating roads and other critical infrastructure, expanding flood-water absorbing wetlands, and replenishing eroded beaches.

Private real estate owners, too, are going to have to be more diligent in taking steps to protect their properties. More and more of them are going to have to install, reinforce or heighten seawalls and elevate docks, structures and entire homes. In condo communities, owners face the specter of higher association fees and special assessments to cover the cost of protecting common areas and buildings from flooding.

In cases where sea level rise floodwaters cannot be held back, private property owners are going to face a host of problems. As owners of real estate located in neighborhoods that flood now can attest, typically the first sign of sea level rise is seawater collecting on roadways or rising up out of storm drains that would normally drain into the ocean, a harbor or other waterway. Sounds like a minor problem, until you have to park blocks away from your home and wade through the water to reach your front door. Driving through seawater is out of the question. The salt is extremely corrosive to vehicles.

The next step in the typical sea level rise flooding progression is floodwater collecting on a property, where it can rend septic systems inoperable, pollute freshwater wells, and damage landscaping and exterior structures. In cases where the seawater enters a home, the costs can be devastating. FEMA’s National Flood Insurance Program website has a flood damage calculator that estimates an inch of water alone can cause nearly $27,000 damage to a 2,500 home. A foot of floodwater can cost over $72,000 to repair.

In extreme cases, local governments are determining that it’s no longer cost-effective to maintain and rebuild roads and critical infrastructure to serve properties that are repeatedly inundated. Officials are insisting on buyouts, where they pay an owner fair market value to abandon their homes. It’s important to note that buyouts are expensive and only possible where federal and state funding is available. It’s uncertain how long the government will be able to afford buyouts. If the funding dries up, real estate owners could be left with properties that regularly flood, aren’t insurable, and are impossible to sell.

The immediate coastline isn’t the only place at risk from sea level rise. In areas like South Florida that are built on porous limestone or Honolulu that are built on porous volcanic rock, higher seas can push seawater inland underground. The dense seawater, in turn, can force the fresh water table upward toward the surface where it saturates soils. This can create three problems: 1) Unable to absorb rainwater, the saturated soils can cause surface flooding; 2) Septic systems that rely on dry soil to filter impurities can become inoperable when saturated soils can’t handle any more water; and 3) Fresh water well systems can become polluted by saltwater making them unusable.

Beyond the physical problems floodwater presents to coastal communities, private property owners also have to keep an eye on trends in the property tax, insurance and mortgage sectors. Coastal communities are fighting for federal and state funding to pay for sea level rise control projects. When the money runs short, local taxpayers will have to cover the bill for flood prevention projects.

The National Flood Insurance Program is already in the process of making sure that owners of properties most at-risk of flooding pay higher premiums. And, after the tragic condo building collapse last summer in Surfside, Florida, mortgage backers Fannie May and Freddie Mac are now forcing condo associations to answer detailed questions about building maintenance and the level of reserve funds available to cover routine maintenance and repairs. In instances where buildings are deemed to be poorly maintained, short on cash, or unsafe, lenders will be barred from issuing mortgages. This new policy is already wreaking havoc in the South Florida condo market, where closings are being delayed due to the stringent requirements. The threat is compounded by the fact that even cash buyers can be forced to show that they will be able to get a mortgage if they don’t have enough resources to cover the cost of a condo.

With all of these factors in play, it’s clear that the prospect of another foot of sea level rise is something that real estate owners and buyers can no longer afford to shrug off and ignore. Every additional inch of water that accumulates between now and 2050 is going to compound the challenges faced by coastal communities. Due diligence — staying up to date on the latest developments and responding appropriately — is the only way to protect real estate investments.

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