Cape Hatteras Houses Collapse into Ocean: Is this the future of sea level rise?

When it comes to sea level rise damaging beachfront real estate, Cape Hatteras National Seashore in the Outer Banks of North Carolina is the canary in the coal mine. The thin, sandy barrier island is infamous for losing houses to the sea whenever there’s a hurricane or strong tropical storm.

Now, before hurricane season even begins, houses in Rodanthe, south of Nag’s Head, are being swept out to sea. The National Park Service says three houses have been lost to the waves since February and another nine are currently at-risk of the same fate.

There are several factors contributing to the string of house collapses. A low pressure system swirling off the Outer Banks is sending powerful waves crashing onto shore. In addition, the barrier island has long experienced erosion due to regular wave action that gets worse whenever a hurricane or tropical storm hits or even passes close to the area.

Experts, however, have predicted that higher seas due to sea level rise would serve to intensify and speed up the erosion and house destruction, which only makes sense. Higher seas scour away sand more quickly and effectively. They also mean storm surges will travel further inland with more punch. In addition, the warming of the oceans and atmosphere due to climate change is super-charging hurricanes and tropical storms, which means they pack a stronger wallop.

Home loss on the Outer Banks is also due to the unique geology of barrier islands. In their natural state, the narrow sandy strands are meant to migrate inland as sea level rises. The Park Service is allowed to protect critical infrastructure, such as roads, but not houses. Even if the Park Service could take steps to shield the houses, such as building seawalls, nature would eventually break through the armor and sweep them out to sea.

It’s important to note here that scientists blame the loss of houses not only on natural forces but also the fact that humans never should have built the homes on shifting barrier island sand to begin with. Real estate owners and buyers need to carefully consider the consequences of owning real estate on barrier islands and beaches all along the US coast, especially now that sea level rise is in play. One thing’s for sure, houses toppling into the sea are going to become more common as the sea level rises and storms intensify in the decades to come.

(Photo Credit: National Park Service)

Freddie Mac Warns Sea Level Rise is Not Priced into Coastal Florida Real Estate Values

If you want to see where the real estate market is headed in light of climate change and sea level rise, watch lenders and insurers. Why? They have to be forward looking to protect their investment.

With that in mind, a research brief published this month by Freddie Mac, a governmental-sponsored company that backs mortgages, should sound a wake-up alarm to real estate buyers and owners in Coastal Florida (and across the country). In the piece, titled “Homebuyers in Coastal Florida are Not Factoring Sea Level Rise Risk into Home Prices”, Freddie Mac reported that prices are not being discounted for properties that are in sea level rise (SLR) exposed areas not within FEMA-designated floodplains. In fact, researchers found buyers of a primary residence, individual investors, and institutional investors were paying a 3.5% price premium for these homes.

Freddie Mac also reported that homes located in areas vulnerable to sea level rise experienced price discounts after hurricane flooding likely because buyers perceived a heightened flood risk rather than due to the risk of sea level rise itself.

“We conclude that homebuyers either lack awareness of SLR risk or consider it a long-term risk that will not be a concern during the time they own a home,” the researchers said.

Freddie Mac is concerned that the failure to consider the threat sea level rise poses to a property now could eventually lead to sea level rise-driven price drops later when (and if FEMA) updates its flood maps to reflect sea level rise flooding. The researchers say Florida’s housing market, with its large share of vulnerable properties built at very low elevation, could be significantly impacted.

This is yet another example of why owners and buyers of coastal property need to assess the risk posed by sea level rise flooding to make informed decisions and protect their financial futures.

With Hurricane Season Approaching, Now’s the Time to Purchase Flood Insurance

Hurricane season 2022 officially begins on June 1, and it’s expected to be a busy one.

With climate change and sea level rise intensifying tropical storm and hurricane rains and storm surge, now is the time for real estate owners in coastal communities and well inland to consider purchasing flood insurance — if they haven’t already. This is especially important because standard homeowner’s insurance policies do not cover flooding.

Property owners who plan to wait until a storm is aimed at their region to purchase flood insurance are making a big mistake. New policies under FEMA’s National Flood Insurance Program take 30 days to take effect.

Property owners who purchase properties using government-backed mortgages are required to purchase flood insurance policies. Many owners who purchased their homes using cash self-insure their properties. Some owners who are self-insured are under the mis-impression that because they’re located outside of designated flood zones that they shouldn’t be concerned about flooding. This can be a costly mistake. Estimates are that 25% of flood damage occurs in low-risk flood zones. An extreme example of this hazard is the fact that more than half of the homes that flooded in Houston, TX, during Hurricane Harvey were located outside designated flood zones.

Flood insurance policies cost on-average $700 a year, though FEMA has started to place a heavier premium burden on properties built in higher risk areas. The policies cover up to a quarter million dollars in damage. Buyers should also be aware that a seller’s flood insurance policy can be transferred to them at closing often at a significant savings.

Flood insurance is clearly worth purchasing. According to FEMA’s Flood Damage Cost Estimator, one inch of floodwater can cause up to $25,000 in damage and one-foot up to $72,000. As building materials and labor have become much more expensive in most regions of the country, these estimates are most likely on the conservative side.

Owners and buyers of real estate at risk of flooding can get more information about National Flood Insurance Program policies from the National Flood Insurance Program website.

New Hawaii Law Requires Sea Level Rise Threat Disclosure in Coastal Real Estate Transactions

Beginning this week, property owners selling coastal real estate in Hawaii are required by law to disclose the threat sea level rise flooding poses to a property. According to a State Department of Land and Natural Resources news release, real estate transactions involving properties located on or near the ocean must include the new disclosure. The new disclosure law is in addition to the National Flood Insurance Program’s requirement that sellers notify buyers that a property of interest is located near a flood-prone stream or area that may flood during heavy rainfall events.

According to an article posted on the Hawaii Life Real Estate Brokers website, the new disclosure law is based on modeling performed by researchers at the University of Hawaii. They studied coastal areas at risk from flooding or other damage due to sea level rises, annual high wave flooding, or coastal erosion.

Properties built between current sea level and 3.2 feet of elevation — the potential sea level-driven high water mark at the end of this century — are subject to the new disclosure law. Buyers, sellers and real estate agents can use the state’s interactive map to determine if they’re inside the disclosure zone.

Due to the hodge-podge of state-level sellers disclosure laws, buyers and sellers should always check to see what’s mandated in their area to avoid costly lawsuits and/or purchasing property that’s prone to flooding.

Sea Level Rise Flooding Isn’t The Only Climate Change Symptom Vexing Coastal Real Estate

Climate change is posing many challenges to coastal communities. Sea level rise flooding is one of the more obvious symptoms of a warming planet. Other problems include longer, hotter heat waves and droughts. This time of year in South Florida, sargassum seaweed season begins and it can run sporadically right through the fall.

The smelly, scratchy seaweed washes ashore by the ton on hundreds of miles of beaches in South Florida, Mexico and throughout the Caribbean islands. The seaweed drives tourists away and could one day threaten local real estate markets when buyers get fed up.

Scientists say seaweed blooms in the Caribbean and off Brazil are getting worse every year due to global warming heating up the ocean and humans using too much fertilizer on farms and lawns. Runoff containing animal waste from large-scale farms is also a problem.

Coastal communities are employing a number of methods to combat the seaweed. Some plow it into the sand, others truck it away at great expense. Some communities are even exploring ways to harvest and process the seaweed before it ever reaches land.

The sargassum seaweed problem is expected to get worse until humans stop or at least cut back the use of greenhouse gas producing fossil fuels and get water pollution under control. Real estate buyers and owners in coastal communities need to keep an eye on the seaweed problem as it could one day impact the value of their properties.

Are Houses on Stilts the Future of Sea Level Rise-Threatened Coastal Real Estate?

Coping with sea level rise flooding and sea level rise-intensified storm surge requires innovation and imagination in the public and private sectors. Among the solutions now being implemented in areas with real estate that floods or soon may experiencing flooding are building and raising seawalls, installing pumps and storm drains, setting aside parks and open lands to absorb and store flood water, and elevating homes, roads and critical infrastructure.

Another option that’s been in use in areas that have long experienced severe beach erosion and storm surge flooding is building houses on stilts. This has been the go-to solution in areas like coastal Louisiana and the Outer Banks of North Carolina for decades. With the oceans continuing to rise and storm surge becoming and even greater threat, areas that didn’t rely on stilts as a solution to protecting houses and other structures are now considering them.

This month, Dezeen — the self-described “world’s most popular and influential architecture, interiors and design magazine” — has a feature article by reporter Ben Dreith about a 4,500 square foot home Brillhart Architecture built on stilts for an owner who owned a house that was heavily damaged during Hurricane Irma in 2017.

The modern home is built on stilts that range from very slender to large enough to form circular rooms reinforced with rebar that can also be used as storage spaces. The entire first floor has usable living space and open areas that are all designed to quickly shed flood water.

The article gives a great overview of how a stilts can help a house cope with rising waters. There are limits, however, to their usefullness. For example, a house built on stilts is of little use if the property and surrounding roads are frequently or permanently inundated and/or access to fresh water and sewage service, electricity or other utilities becomes impossible due to flooding. These are the types of issues buyers and owners should ponder when they’re considering building a house on stilts in an area vulnerable to sea level rise flooding and storm surge.

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.

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.

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.

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