Buyers Beware: Owners are Selling Properties Targeted for Sea Level Rise Flooding Buyouts

The Miami Herald ran two articles (both behind paywalls/titles listed below) on Sunday that discussed how the Florida Keys and Miami-Dade County are managing properties targeted for buyouts due to storm surge and sea level rise flooding. The Florida Keys is making some slow process in purchasing distressed properties, while Miami-Dade County has dropped the ball completely. In both locales, some owners dazzled by rapidly appreciating real estate prices have resorted to selling properties to buyers after applying to buyout programs, which, unfortunately, puts the new buyers, wittingly or unwittingly, at risk of flooding complications.

Thousands of US coastal properties have been purchased through government buyouts over the last decade, and the trend is accelerating as the sea level rises. Often the buyouts occur after hurricane storm surges (which are growing more powerful and damaging as sea level rises) flood neighborhoods. Buyouts are also becoming more common in areas that experience so-called rainy day or nuisance flooding due to much higher than normal tides.

National and state governments are eager to remove properties that require frequent, expensive repair or replacement from repeated flooding from the insurance rolls. They also want to avoid the expense of maintaining critical infrastructure — such as roads, sewer and water systems, and storm drains — in flood-prone areas.

After Hurricane Irma sent a powerful and devastating storm surge into some of the Florida Keys in 2017, Monroe County acquired federal funding to buyout damaged and flood-prone properties. The county received 80 applications from real estate owners and has purchased nine properties. County officials hope to buy another dozen soon.

According to the Miami Herald article, one massive roadblock that has prevented more purchases is rapid appreciation in the housing market over the last couple of years. In some cases, owners who had agreed to the buyout and demolition of their frequently-flooded properties decided instead to sell them for prices higher than they would have received under the buyout program. To remedy the situation, the county has received permission to offer more money for properties from the state agency that’s coordinated the buyout funds.

Miami-Dade County initiated a similar buyout program, but in three years the county hasn’t purchased a single one of ten properties that were targeted by buyouts. The lack of performance has led to the state administrative agency taking back the funds that were to be used for the purchases. Some of the buyout eligible property owners are angry that the county failed to complete the purchases as promised. In one instance, a developer has purchased a flood-prone property with the intent of constructing an 11-unit building on the lot. The developer was unable to tell the county what steps it would take to flood-proof the property but the county approved the project anyway.

Buyouts are controversial but necessary in areas where properties cannot be protected from storm surge and sea level rise flooding. Buyout opponents believe no matter how many times a property floods, insurers and governments are responsible for helping them to repair the damage and maintain roads and water and sewer service. Proponents, however, recognize when the battle is lost and they appreciated the government assistance when they’re ready to move on.

The current situation where some homes targeted for buyouts are actually purchased and demolished while others are being sold to buyers with or without them being aware of the property’s flood status needs to be addressed. The fact is each state has its own seller disclosure laws, so too often buyers are left in the dark about the level of threat posed by storm surge and sea level rise flooding. Until this unfair situation is resolved, buyers need to gather information from more than just sellers to ensure they’re not purchasing a property that was targeted for a buyout unless they’re prepared to accept the risk that their investment will literally end up underwater.

Editor’s Note: Here are the paywall protected article titles “Miami-Dade failed to buy flooded homes; Now high-risk sites open to more development” and “Buyouts take flood-prone Keys properties off the market. There are more sellers waiting”.

Sea Level Rise Will Impact 650,000 US Properties by 2050

A study released today by Climate Central, a climate change research group, concluded that 650,000 US coastal properties will be impacted by sea level rise flooding by 2050. To reach this conclusion, researchers analyzed state and county level tax reports in areas currently experiencing or at-risk of sea level rise flooding.

Among the key findings:

  1. More than 648,000 properties on 4.4 million acres are at risk of experiencing at least some measure of flooding.
  2. Over 48,000 properties may be entirely flooded.
  3. The low elevation states of Florida, Louisiana and Texas have the most at-risk properties.
  4. By 2100, over $100 billion worth of property will be at risk from rising seas.

The loss of properties threatens to create other problems for coastal communities and whole states. Properties that flood may become uninhabitable or lose value, which can harm the tax base that pays for schools, emergency services, critical infrastructure and numerous other services. Individual property owners, too, could also see their valuable real estate assets lose value, which can impact their wealth and retirement income.

To combat sea level rise flooding, governments in coastal communities are investing billions of dollars in property buyouts, pumping stations, the elevation of roads and other critical infrastructure, and the creation and improvement of sea walls and other flood-control barriers. In most cases, property owners are paying higher taxes to fund the projects. The loss of property value and tax revenues due to sea level rise flooding could create a spiral that makes funding these projects increasingly expensive, which will leave even more properties vulnerable to flooding.

Among the solutions Climate Central researchers recommend governments implement are encouraging development outside the sea level rise flooding risk zones, educating property owners about the risks rising seas pose to them, and, of course, reducing the burning of fossil fuels that are behind global warming and sea level rise.

Disturbing Developments in Greenland and Antarctica Could Accelerate Sea Level Rise Flooding and Impact Coastal Real Estate Markets

Last week, scientists reported that humans have already pumped enough greenhouse gases into the atmosphere to cause enough global warming to guarantee that Greenland alone will contribute up to a foot of sea level rise. This week, scientists added to the bad news by reporting that Antarctica’s so called “doomsday glacier” is melting rapidly from the bottom and its collapse could potentially add a devastating 10 feet to ocean levels. And, as if that wasn’t bad enough, this week researchers also observed a heat wave melting Greenland’s ice sheet at a rate more typical of mid-July than the beginning of September, which means even more water running off the land to the ocean where it contributes to sea level rise.

Unfortunately for people trying to decide whether or not a coastal community is a good place to invest in real estate based on past and present sea level rise flooding, the rapid changes in Antarctica and Greenland could be sudden and decisive game changers. If ice sheets in Greenland or Antarctica continue to rapidly destabilize, events that cause sudden increases in sea level rise could become the new normal, just as we’ve seen climate change drive an increase in the number of what used to be called 100-year flooding events due to excessive rain at locations around the globe.

As humans continue to burn fossil fuels that pump massive amounts of greenhouse gases into the atmosphere, we’re sure to see upward revisions in the pace and height of sea level rise. This makes it very difficult for buyers who want to purchase a property using a 30-year mortgage in areas currently experiencing sea level rise flooding or that are at risk of flooding in the decades to come to make informed decisions. It also makes it difficult for current owners to decide whether or not they should continue to hold a property in an at-risk area.

Further compounding the risk for buyers and owners of real estate in coastal communities is the reality that scientists aren’t the only ones monitoring the factors that can speed up sea level rise. Insurers and mortgage providers who share the risk with buyers and owners are also keeping a keen eye on the latest developments and acting accordingly. Private insurers are abandoning some markets where sea level rise-intensified storm surge flooding poses too great a risk. And mortgage providers that have to peer thirty years in the future to see if they’re going to make a profit on a loan are being ever more careful in the loan approval process.

If insurers and/or mortgage providers decide that doing business in at-risk coastal communities isn’t worth it, this could throw local real estate markets into turmoil. The risk isn’t just theoretical. Florida, for example, considered the most at-risk state for sea level rise-intensified storm surge and so-called sea level rise nuisance flooding, is already seeing property insurers pull out of the market in part because they’re not solvent enough to assume the risk. This has left thousands of homeowners scrambling for new private insurance policies or turning to state-run Citizens Property Insurance, which was supposed to be the insurer of last resort. The state has been seeking solutions to the property insurance crisis that’s sure to worsen as sea level continues to rise.

Homeowners with federally backed mortgages are required to carry adequate property and flood insurance. If the insurance market collapses, most buyers will not be able to get loans. This in turn will cause properties to lose value.

Experts stress that there’s still time for humans to stop burning fossil fuels at a rate that contributes to global warming and sea level rise. There are steps being taken to rein it in, but whether effective action will be taken quickly enough to avert disaster in Greenland and Antarctica has yet to be seen. The ice sheets in both locations are definitely growing hazards that few people involved in coastal real estate can afford to ignore.

Coastal Real Estate Owners Shouldn’t Take Comfort In New Study That Predicts Greenland Ice Melt Will Raise Sea Level By Nearly a Foot

This past week, major news outlets published articles about a study by geologists from the National Geological Survey of Denmark who said that even if greenhouse gas emissions ceased today, Greenland’s glaciers would melt enough to contribute nearly a foot to average global sea level. In addition, the study published in the journal “Nature Climate Change” said if global warming continues at the current pace, Greenland could add more than two feet to global sea level.

The researchers didn’t give a specific time frame for the sea level rise, but it’s assumed it would occur gradually over the next 100 to 150 years. Their main point is that the amount of greenhouse gases — carbon dioxide and methane currently in the atmosphere — has created a situation where Greenland will release a minimum of nearly a foot of glacial melt into the ocean no matter what we do.

Buyers and owners of real estate located in coastal communities who think a foot of sea level rise isn’t much shouldn’t find comfort in the report. First of all, it’s important to consider that the foot on-average of sea level rise that has accumulated so far due to global warming is already causing costly flooding in many coastal communities, and the number, severity and distribution of these flooding events is growing every year.

Next, it’s important to note that Greenland is only one small piece of the sea level rise puzzle. According to scientists, ice melt in Greenland has only contributed about 20 percent of total sea level rise so far. Ice melt in Antarctica has also caused about 20 percent of the total. While global warming heating up the oceans and causing them to expand has contributed about 50 percent of all sea level rise. The remainder is coming from glaciers melting in mountainous areas and other sources. If all of these sources driving sea level rise also have minimum amounts of sea level rise “baked in” due to the amount of greenhouse gases already accumulated in the atmosphere, the total amount of sea level rise in the years to come will be much higher than the Greenland’s nearly one foot.

Finally, real estate owners in coastal communities under threat of sea level rise flooding have to consider that sea level rise has been accelerating for years, and today’s estimates of total sea level rise will likely be adjusted upwards in the years to come. This is especially true because human society has not been reducing the amount of fossil fuels — coal, oil and natural gas — it has been burning, so overall global warming will continue to increase as will sea level rise.

The bottom line remains: Real estate buyers and owners in coastal communities need to continue to perform due diligence — drawing information from many sources — to calculate their exposure to sea level rise flooding.

New New York City Sea Level Rise & Storm Flooding Maps are Useful for Real Estate Owners & Buyers

After Hurricane Sandy slammed New York City ten years ago, the city began taking climate change and sea level rise seriously. The superstorm flooded low lying areas, inundated the subway system and road tunnels, and caused an estimated $19 billion in economic losses. The remnants of Hurricane Ida, which similarly flooded large swaths of New York, New Jersey, Connecticut and Pennsylvania last year, was a powerful reminder that more needs to be done.

To prevent loss of life and property, New York City has been busy producing a series of interactive flooding maps that tell real estate owners and renters whether or not they are in areas at high risk of flooding. Just last week, the city released interactive maps designed to inform residents of their flood risk under different scenarios. According to the city, the New York City Stormwater Flood Maps “show moderate stormwater flooding scenarios under current and future sea level rise conditions, as well as an extreme stormwater flooding scenario under future conditions.”

In addition to the maps, the city has a “Rainfall Ready NYC Action Plan” webpage that gives people the information they need to stay safe while infrastructure is built or upgraded to better cope with sea level rise flooding, more intense rainstorms, and more powerful tropical storms and hurricanes that are the results of climate change. The Action Plan includes information on how to prepare for storms, how monitor storm conditions, how to respond to storms, and how to recover from them.

The maps the city is producing are of great value to real estate owners and prospective buyers in the affected areas. Current owners can use them to not only to prepare their properties to withstand sea level rise and storms, but also to determine if the investment is worth it. Prospective buyers can use the maps to decide if they really want to get involved in real estate in an area that’s currently experiencing flooding or at risk of flooding in the future. This is critical information since properties that flood can lose value or appreciate at a slower rate than comparable properties in safe areas.

New York City’s proactive efforts to warn residents of the risks of flooding caused by climate change driven sea level rise and supercharged storms is admirable and should be replicated by cities and towns all along the US coastline. Used properly, they can help real estate owners and prospective buyers to make informed decisions that protect their financial futures.

US Supreme Court’s Ruling Limiting the EPA’s Ability to Regulate Greenhouse Gases is a Blow to Sea Level Rise Real Estate

The U.S. Supreme Court’s decision today to limit the Environmental Protection Agency’s (EPA) ability to regulate the release of greenhouse gases by electrical power plants is a serious blow to efforts to fight overall global warming and the resultant sea level rise that threatens billions of dollars of real estate all along the U.S. coastline.

Scientists based their latest estimates on the amount of sea level rise U.S. coastal communities will experience between now and the end of the century on the assumption that regulators, like the EPA, would be able to force electrical power plants and other major greenhouse gas emitters to reduce their annual output. With no oversight from the EPA, the court is saying that the American public has to rely on Congress to pass specific legislation restricting emissions from individual sources. The reality of this situation is that Congress is heavily under the influence of fossil fuel — coal, oil and natural gas — producer campaign contributions, so getting meaningful regulations passed will be nearly impossible.

Where does this leave us? Quite frankly, living in a world that’s already overheating and experiencing longer, hotter and more deadly heatwaves, mega-droughts that threaten the very existence of cities in the American West, supercharged tropical storms, hurricanes and local rain events that bring devastating flooding, calamitous wildfires, and rising seas that are inundating coastal real estate.

The Supreme Court’s decision limiting the EPA’s ability to regulate greenhouse gas emissions will accelerate global warming. This will result in faster ocean expansion and ice melting in Greenland and Antarctica and, ultimately, sea level rise at the high end of expert forecasts. According to the National Oceanic and Atmospheric Administration website: “Current and future emissions matter. About 2 feet or 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 of rise for a total of 3.5-7 feet by the end of this century.”

It’s important to keep in mind that many coastal communities are already spending millions of dollars combatting the sea level rise we’re already experiencing. Every additional inch between now and the 2100 will add to the burden and damage more and more public and private real estate and infrastructure. For example, if saltwater invades the water table and fouls freshwater wells, some cities and towns will find it hard to continue to exist.

The U.S. Supreme Court’s EPA decision is dangerous for the U.S. and the entire planet. The best we can do to protect our lives and property and the lives and property of others is to vote only for candidates who who are prepared to ignore old world energy producers and join the fight against climate change, global warming and sea level rise.

Hot Housing Market Chills Flood-Prone-Housing Buyout Programs

One tool local officials have to combat sea level rise flooding that damages residential real estate is home buyouts. According to an Associated Press article, the Federal Emergency Management Agency (FEMA) has spent nearly $3.5 billion over the last 30 years to help communities purchase nearly 50,000 flood-prone properties. Typically buyouts are used so communities and insurers don’t have to bear the cost of repairing or rebuilding houses that repeatedly flood.

The rapid appreciation in real estate value over the past year, however, is posing a challenge to officials trying to buyout flood-prone homes. According to the Associated press report, owners who would usually accept the terms of a buyout are now, in many cases, turning them down with the hope that a buyer will pay even more than the buyout program offers. Another reason some owners are reluctant to sell is that they realize that all the real estate in their community has been appreciating so finding a replacement home in a location that doesn’t flood at an affordable price can be quite a challenge.

In response to the real estate appreciation challenge, FEMA is offering more money — up to $31,000 — to help homeowners find affordable replacement housing. Some states are also offering extra money to people who agree to be bought out.

Refusing a buyout is not without risk for homeowners. If their house floods while it’s up for sale, it will be difficult to find a buyer willing to purchase it. This is an especially serious issue for property owners in coastal communities during hurricane season.

This buyout situation should serve as a cautionary tale for buyers. To avoid unknowingly purchasing a flood-prone home that really should be bought-out to stop the repair and rebuilding cycle, they need to perform due diligence and determine whether the risk is worth it to them. Some coastal states — like Florida — don’t have strong sellers’ flood disclosure requirements, so they will have to conduct research on their own to independently confirm whether a property is flood prone. FEMA flood maps, local real estate agents, insurers, and mortgage providers are a great place to start.

New “HazardAware” Website Gives Gulf Coast Real Estate Owners, Buyers Info on Risks Posed By Sea Level Rise and Climate Change

In the age of climate change and sea level rise, one of the most difficult tasks for real estate owners and buyers is to evaluate a property’s risk of damage from ever-worsening natural disasters. Experts from several universities have developed a new website called HazardAware to make the process of evaluation a little easier in Florida and coastal area counties in Alabama, Mississippi, Louisiana and Texas.

When real estate owners and buyers enter an address in a search window on the site, they’re given “A home’s HazardReady Score” which tells them whether a home is more or less resilient to natural disasters than average. They’re also given a wealth of data on a home’s, neighborhood’s and community’s risks for certain types of hazards, such as wind, tornadoes, flooding and hail, and a general analysis of the threat sea level rise poses to a property.

HazardAware also assists real estate owners and buyers by telling them what questions they should consider about a given property and what they can do to reduce their exposure to certain risks.

When I ran a couple of addresses that I’m familiar with on the HazardAware website, I received four pages of thought-provoking information, including links where I could get even more information about climate change, sea level rise, insurance and other relevant topics. (Oddly enough, for both properties located in South Florida and Southwest Florida HazardAware listed “Extreme Cold” as among the top four hazards based on insurance loss, which seemed a little suspicious.)

HazardAware also has a section that discussed the properties’ risk of sea level rise flooding based on a their status under FEMA’s Coastal High Hazard Areas program, but it didn’t really delve too deeply into the issue. At this point, real estate buyers and owners involved in property located near the coast may want to increase their knowledge of a property’s, neighborhood’s and community’s sea level rise flooding risk by visiting Climate Central and using its excellent hazard maps.

As with all online tools, HazardAware is a great place to gather general information about a property’s risk of damage from natural hazards, such as sea level rise, but owners and buyers still need to perform additional due diligence. For example, they need to verify information provided by the online tools and find out the specific insurance claims history of a property. They also need to further research the threat the natural hazard currently poses to a property, neighborhood and community, what is being done to address the threat, and how it will impact how much they will have to pay for property maintenance, insurance, and taxes, and, ultimately, how it will impact their property value.

Another critically important factor to research is the health of the loCAL mortgage and insurance industries. If providers of mortgages and/or insurance are struggling in an area, this could be a warning that the local real estate market is in jeopardy.

Key Greenhouse Gas Reaches Level Not Seen Since Sea Levels Were 16 to 82 Feet Higher Than Today

The National Oceanic and Atmospheric Administration (NOAA) and Scripps Institution of Oceanography at the University of California San Diego reported today that carbon dioxide — a key greenhouse gas fueling global warming — has reached levels not seen for millions of years. This has dire consequences for people who own real estate in coastal communities vulnerable to sea level rise flooding.

Measurements taken at Mauna Loa Atmospheric Baseline Observatory in Hawaii peaked at 421 parts per million in May. The last time the level was that high over 4 million years ago sea levels were 16 to 82 feet higher than they are today. The new reading is 1.8 parts per million over 2021. Before the Industrial Revolution got underway in the 1800s, carbon dioxide levels were around 280 parts per million, where they’d been for nearly 6,000 years of human civilization.

Carbon dioxide is a potent greenhouse gas that remains in the atmosphere for an extended period of time. The NOAA report not only stresses the need for humans to rapidly reduce the use of fossil fuels — coal, oil and natural gas — that release greenhouse gases into the atmosphere, it also sounds the alarm for people who own or are considering buying coastal real estate in areas that are now experiencing or at-risk of experiencing sea level rise flooding.

NOAA’s latest report on sea level rise predicted an average of about 2 feet of sea level rise between now and the end of the century based on current greenhouse gas emissions. If they’re not reduced, that figure rises to up to 7 feet of sea level rise. Some areas are forecast to experience greater or lesser amounts of sea level rise than others due to land elevation, land subsidence, ocean currents and other local conditions.

It’s important to note here that when we talk about up to 7 feet of sea level rise by the end of the century, we’re talking about a gradual but accelerating rise in ocean level. This will put more and more coastal real estate at risk of flooding in the years and decades to come before the end of the century.

“The science is irrefutable: humans are altering our climate in ways that our economy and our infrastructure must adapt to,” said NOAA Administrator Risk Spinrad, Ph.D, in an article on the agency’s website. “We can see the impacts of climate change around us every day. The relentless increase of carbon dioxide measured at Mauna Loa is a star reminder that we need to take urgent, serious steps to become a more Climate Ready Nation.”

The bottom line is to deny or ignore climate change and continue to burn fossil fuels at the current or an even greater rate is to deny basic science. We all need to do what we can to reduce the consumption of coal, oil and natural gas to protect lives, property and, quite frankly, the future of humanity.

“Above-Normal” Hurricane Season Forecast Means Coastal Real Estate Owners and Buyers Need to Consider Insurance Options NOW

An ongoing La Nina and above-average Atlantic Ocean water temperatures are leading the National Oceanic and Atmospheric Administration (NOAA) to forecast an above-normal hurricane season. “NOAA is forecasting a likely range of 14 to 21 named storms (winds of 39 mph or higher), of which 6 to 10 could become hurricanes (winds of 74 mph or higher), including 3 to 6 major hurricanes (category 3, 4 or 5; with winds of 111 mph or higher), according to an agency news release.

With this extreme threat level, owners of coastal real estate and even those well inland in the Eastern U.S. and Hawaii who could be impacted by flood and wind damage from a degrading storm, need to review their insurance coverage. Considering scientists are reporting that global warming and sea level rise are super-charging hurricanes and tropical storms, people who own real estate in at-risk regions should put this on the top of their to-do lists.

Lenders require homeowners with mortgages to purchase basic dwelling coverage that covers the cost of repairs to a damaged home. In areas vulnerable to hurricanes and flooding, lenders may require special windstorm and flood insurance.

Considering that FEMA’s flood maps are notoriously outdated and homes well outside the designated flood zones have been damaged by flood waters in past storms, it’s important for homeowners in areas with even a seemingly remote chance of getting hit by floods to consider purchasing coverage through the National Flood Insurance Program. For example, in August 2017, thousands of homes outside the FEMA-designated primary flood zone flooded when Hurricane Harvey rolled over the Houston area.

With insurance costs skyrocketing in many coastal areas due to increased claims from past hurricanes and storms, fraud and other reasons, some homeowners are going without insurance. They tend to fall in two camps those who are gambling that their properties will not get hit by a hurricane or tropical storm and those who believe they have enough reserve funds to cover the cost of repairs if they do.

These homeowners need to be aware that waiting until a storm is likely headed their way to purchase insurance won’t work. Flood insurance purchased under the National Flood Insurance Program won’t actually kick in until 30 days after a policy is purchased. In addition, if a tropical storm or hurricane watch or warning is issued in a 16,000 square mile box around Florida, the state’s Citizens Property Insurance Corporation and most private insurance companies will not accept applications for new coverage. Insurers in other states may have their own last-minute purchase limitations. There’s also a risk that providers may not be able to process applications made before a storm in a timely manner.

When property owners are reviewing their insurance policies, they should also revisit their coverage amounts. With inflation, even $250,000 in coverage won’t provide as much repair and rebuilding purchasing power as it used to. They should also double-check their deductibles to make sure they’re still in line with their financial resources.

Evaluating homeowners, flood and wind insurance can be drudge work under the best of circumstances. However, with the high risk of storms and recent years of climate change super-charged storms wreaking record destruction on coastal real estate and points far inland, not doing your homework can lead to serious negative consequences should a storm hit your property.

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