Tag: real estate

The Coronavirus Pandemic Threatens to Worsen the Effects of Global Warming and Sea Level Rise

Two widely reported (and rare) positive impacts of the Covid-19 Coronavirus pandemic tragedy are cleaner air and a 17 percent reduction in the greenhouse gas emissions that drive global warming and sea level rise.

Residents in cities around the world have been astonished to see mountain ranges at a distance that have rarely been seen in generations due to curtains of smog. And the drop in greenhouse gas emissions has led many to believe that global warming and sea level rise have been derailed.

Unfortunately, the real picture isn’t so rosy. While there have been a few months with greenhouse gases on the decline — mainly due to the fact that people under lockdown aren’t driving to work — the the high concentration of carbon dioxide accumulated since the turn of the last century remains intact. This ultimately means global warming continues, as does sea level rise.

Some observers see even the temporary drop in the release of greenhouse gases as proof-positive that humanity can tame global warming, thereby preventing the predicted extreme weather — mega droughts, heat waves, floods and intense hurricanes — from impacting society and sea level rise from inundating major cities around the world. Their reasoning is that if people under threat of a pandemic can reduce consumption of fossil fuels, then people facing catastrophe from a warming planet can do the same.

If only it were that simple.

The fact is that most people reduced fossil fuel consumption not as a direct goal to save the environment but because under lockdown they didn’t have a choice. It’s doubtful that without the immediate crisis people would have willingly stopped driving. In addition, there are signs that as nations and states reopen commuters will avoid potential exposure to the virus on public transportation and start driving to work in increasing numbers. This, of course, will increase the rate at which carbon dioxide is pumped into the atmosphere.

Some observers have also opined that the recovery from the pandemic is an excellent opportunity for governments to invest in a new world powered by renewable energy. That’s a very noble goal, but the reality is governments have already spent so much saving their economies from pandemic-related collapse it’s unlikely they’ll have the funds necessary to pay for such an ambitious project.

Further complicating matters in the United States is the fact that the federal government is reluctant to provide emergency funding to state and local governments facing severe deficits due to the loss of tax revenue from economic inactivity during the lockdown and the unexpected expenses involved in dealing with the pandemic. This is especially worrisome because many of the state and local governments grappling with climate change and sea level rise-related expenses were already counting on the federal government to provide a portion of the millions and even billions of dollars they need to fund projects that would protect real estate and critical infrastructure. Without federal assistance, it will be difficult for them to pay for projects, such as seawalls and pump stations and raising roads and water pipes.

When we’re in the middle of the pandemic, it’s hard to predict how this will all play out. One thing’s for sure, however, global warming and sea level rise still pose a threat to coastal communities, and real estate buyers and owners ignore them at their own peril. Bottom Line: If many of the projects needed to protect homes and businesses from sea level rise flooding aren’t funded and begun now, more real estate and critical infrastructure will be inundated in the years to come.

Global Consultant Recommends Steps to Protect Florida Real Estate Value from Sea Level Rise Flooding

McKinsey & Company, a global consulting firm, released a report this week that analyzes the risk sea level rise flooding poses to billions of dollars worth of Florida’s residential real estate and recommends steps that could be taken to mitigate the damage.

The report, titled “Will mortgages and markets stay afloat in Florida?”, starts by stating the simple fact that Florida’s unique location — in a hurricane-prone zone — and geology — extra low elevation with a porous limestone foundation that allows sea water to move freely — makes it very susceptible to sea level rise flooding. In fact, the authors cite a First Street Foundation study that concluded sea level rise will increase the number of days that many coastal areas experience tidal flooding each year from a few days today to 200 days a year by 2050. In addition, the average annual damages from storm surges will itself surge from $2 billion today to up to $4.5 billion by the middle of this century.

The report goes on to discuss how sea level rise is already depressing home values in areas that experience sea level rise flooding compared with those that don’t. “About 25,000 homes in Florida already experience flooding at frequencies of more than 50 times per year (almost once a week on average),” according to the report. “With rising sea levels, 40,000 coastal properties representing $15 billion of value could run this risk by 2030, and 100,000 properties worth $50 billion by 2050.”

The threat to the value of Florida’s residential real estate isn’t posed only by direct flooding, either. The report says as buyers are increasingly made aware of the flooding and the expenses involved in owning a property in a flood zone, prices will likely drop. Buyers could also balk at the higher insurance premiums and taxes that are sure to be levied as a result of flooding. A final point of pressure is the mortgage market. With the risk of flooding increasing every year, experts are wondering how long mortgage providers be willing to write 30-year-mortgages — or even 15 year mortgages, for that matter — for high risk properties when the owners might never pay back the loans.

The report authors offer a few potential solutions that could help mitigate the risk. Among their recommendations are that: 1. Real estate markets become more transparent about the risk of sea level rise flooding, so buyers don’t lose confidence in the market; 2. More money be spent on projects needed to upgrade the infrastructure — such as sea walls and storm sewers — needed to fend off the flooding ; and 3. Policy makers, engineers, investors and community organizations band together in groups to decide which properties to protect from sea level rise flooding and which to abandon.

In the end, the authors write that “While the state and communities face hard choices in the face of rising sea levels and worsening hazards, planning today can help manage the consequences and minimize the costs of climate change in the future.”

It’s clear from this report that the day of reckoning is here for buyers, sellers, owners and real estate agents in coastal communities. Understanding the roles played by individual property owners, governments, insurers and mortgage providers in the health of a real estate market impacted by sea level rise flooding is critical to protect your financial future.

Florida’s First Sea Level Rise Resiliency Officer Leaves Bombshell Report

Julia Nesheiwat, Florida’s first sea level rise resiliency officer, left her position after only a few months on the job, but a report she left behind in late 2019 should act as a call to action for the state.

According to the 36-page annual report she prepared for Governor Ron DeSantis that was acquired by the Tampa Bay Times, Nesheiwat evaluated how Florida was dealing with sea level rise and concluded that their response was too slow and disjointed. “Florida’s coastal communities and regions do not have a lot of time to waste,” she wrote. Her main concerns are that local communities are trying to cope with sea level rise on their own and, as a result, they are duplicating fact-gathering and planning.

“Florida needs a statewide strategy,” she wrote. “Communities are overwhelmed and need one place to turn to for guidance.” One of the facts fueling her concern cited in the report is the “$26 billion of residential property in Florida at risk of chronic flooding by 2045.”

Nesheiwat said the state should serve as the repository for information and guidelines so coastal communities wouldn’t have to duplicate efforts to come up with solutions to common problems posed by sea level rise flooding. She also made it clear that the state can’t rely on cities to address the enormous challenge alone. One of the examples she provided was the $75 million Monroe County needs to raise less than 3 miles of road in Sugarloaf Key.

With sea levels predicted to rise several feet by the end of the century, Florida’s residential and commercial real estate holders can’t afford to ignore Nesheiwat’s warning and advice.

Buyers Need to Consider Fresh Water Sources When Purchasing Real Estate in Communities at Risk from Sea Level Rise

As sea levels rise, many coastal communities are concerned that salty ocean water will contaminate water wells that provide fresh water to millions of residents. The loss of a fresh water source would be devastating to a city or town. Trying to find new sources, if it’s even possible, could be expensive. This issue should be of concern to real estate buyers in coastal communities.

The saltwater intrusion problem isn’t theoretical. For example, in 2007 researchers at Florida State University surveyed water planners to predict what would happen if seas rose 6-to-18 inches by 2057. Half the planners were concerned that their wells would be threatened by tidal salt water traveling up coastal rivers where water intakes and wells were located.

Kenneth Miller, an earth scientist at Rutgers University, told YaleEnvironment360 this week that the combination of heavy development on barrier islands with low elevations and broad exposure to ocean water puts New Jersey and other locations around the world at risk of saltwater intrusion.

South Florida residents could get a taste of the future this summer. The densely populated region is experiencing a deepening drought that’s forcing water managers to enforce watering restrictions and move water around in canals to prevent wildfires in the Everglades. As fresh water supplies are drawn down, there’s the risk that saltwater will try to fill the void, which could put wells at risk.

Whether salt water intrusion becomes a problem remains to be seen, but the situation certainly exposes a situation that many real estate buyers in coastal areas are not aware of that’s only going to get worse in the years to come. Clearly, knowing how secure a community’s supply of fresh water, or even a private well, is from saltwater intrusion is an important point to consider when buying property in areas near the sea.

Sea Level Rise Flooding Forces Cities and Real Estate Owners to Struggle with Resiliency or Retreat

“Resiliency or retreat? That’s the question many coastal cities and real estate owners are struggling with as climate change causes global sea levels to rise and flood their communities and properties.

An article published today in the Washington Post takes a detailed look at the tough choices cities and owners have to make when floodwaters show up on their streets and property. Government officials in many coastal areas are working hard to provide homeowners with solutions that are effective in their particular situation.

In some areas the flooding is so bad and it’s so expensive to maintain essential services — such as roads, and stormwater and sewer systems — that governments see retreat as the only solution. They’re spending hundreds of thousands of dollars to purchase private properties and then knocking them down.

In other areas, the flooding hasn’t reached that critical point — though it will one day — so governments are subsidizing homeowner efforts to elevate their properties and they’re upgrading critical infrastructure. The only problem with this approach is that one day the streets will still flood, limiting the owners’ ability to reach their properties.

Implementing resiliency and retreat programs isn’t seamless. Often, government officials encounter owners who are not ready to alter or abandon their properties. This can lead to legal and political problems. Another issue is the shear cost of dealing with sea level rise. The Post article cites a Center for Climate Integrity report that estimated that $42 billion dollars will be needed by 2040 to build seawalls to protect U.S. cities with more than 25,000 residents. Add communities of less than 25,000 residents and the estimated cost balloons to $400 billion.

The federal government won’t necessarily be able to come to the rescue either. For example, right now the Army Corps of Engineers has nearly $100 billion in approved construction projects, but Congress has only approved $2 billion to fund them.

The math involved in changing the direction of heavily settled coastal areas is daunting. According to a National Oceanic and Atmospheric Administration report, 126 million people live in coastal communities that produce $8.3 trillion in goods and services. Coming up with cost-effective solutions to deal with sea level rise flooding in such a densely populated and enormous geographical area seems nearly impossible.

The Post article also examines the challenges confronted by real estate buyers in coastal areas. In 21 states it’s very difficult for buyers to tell if they’re moving into a flood zone. A.R Siders, a researcher with the Disaster Research Center at the University of Delaware, told the Post: “I can go on Carfax and find out about the car I’m going to buy, but if I’m going to take out a 30-year mortgage and tie up myself financially, in some states I can’t find out if the house has been damaged. Home buyers are being tricked into buying properties they would not otherwise buy.”

The Post article gives an example of a buyer who works in commercial real estate who was assured that the waterfront property he wanted to purchase would be a minor inconvenience. When the sellers transferred their federal flood insurance policy to him, he found out insurers had paid flood damage claims in 2003, 2009 and 2011. Transparency isn’t assured in every real estate transaction in part because a federal privacy law passed in the 1970s forbids insurers from disclosing a property’s flood history without the seller’s approval.

After reading the Post article, it becomes clear yet again that real estate buyers, sellers, owners and agents in coastal areas need to stay current on the latest information regarding sea level rise flooding in their communities to protect their financial futures. The Washington Post article by writer Jim Morrison is a must-read for everyone involved in coastal real estate.

San Francisco Bay Officials Release a Report that Outlines the Cost of Inaction on Sea Level Rise

Government agencies in the San Francisco Bay Area took a dry-eyed look at the threat sea level rise poses to their region and reached this stark conclusion: “Flooding and rising sea level pose a risk to everyone in the Bay Area, from local communities where homes and jobs may flood, to residents who rely on transportation to connect us, keep our economy humming, and potentially play a role in mitigating the impacts of climate change down the line.”

That finding was included in a recently published report titled “Adapting to Rising Tides — Bay Area” that considered what would happen in the region if no effort was made to address climate change and sea level rise flooding.

Drawing on hundreds of data sources, the report authors found that shoreline flooding would impact everyone who lived in the region. “Even if your home is far from the shoreline, the roads, rails and ferries we rely on; the schools, childcare, and hospitals we depend on; the job at which we work; and the beautiful natural areas we love are at risk,” the report said.

Among the dire predictions for real estate in the region, the report said with four feet of flooding over the next 40 to 100 years nearly 13,000 housing units would “no longer be habitable, insurable, or desirable places to live.” It also said 70,000 badly needed new housing units might not be built or will be built outside the area where they’re most needed.

The agencies that produced the report — Caltrans, Metropolitan Transportation Commission/Association of Bay Area Governments, Bay Area Regional Collaborative, and San Francisco Bay Conservation and Development Commission — are encouraging Bay Area entities to use it to “plan for rising seas level in a way that preserves and enhances the future for not just a select handful of cities or assets, but for everyone.”

When it Comes to Sea Level Rise Real Estate, Timing is (almost) Everything

When buyers are considering purchasing coastal properties in areas that are forecast to experience sea level rise flooding in years or decades to come, one of the questions they have to ask themselves is: “How long do I expect to enjoy the property?”

This question came to light bluntly when I had lunch today with friends who live on an island in San Francisco Bay. My friends, a husband and wife in their mid-60s, said they weren’t too concerned about sea level rise — though they know it’s coming — because it’s not predicted to actually flood their property for another 50 years. As the wife put it, “We’re pretty sure we’ll be dead by then.”

Actuarial tables say she’s probably right. As long as the current sea level rise forecasts hold, they probably will get to enjoy their property for the remainder of their lives.

Sea level rise vs. life expectancy is an important issue for buyers and owners in coastal areas to consider when they’re pondering their real estate options. Sea level rise forecasts are putting a potential expiration date on many communities along the Atlantic, Pacific and Gulf of Mexico coastlines. Knowing when rising seas will begin to inundate cities and towns is critically important for buyers and sellers. Other factors that have to be considered are how will sea level rise impact carrying costs, such as home maintenance, taxes, flood insurance and condo and homeowners’ association fees.

Combining sea level rise forecasts, your life expectancy, and your ability to afford the carrying costs as you age, is a good way for buyers and owners to tell if it makes sense to get involved or stay involved in real estate in a coastal community. When you’re talking about such fun areas to live in, this level of analysis can sound like a real downer, but not taking this dry-eyed look at the sea level rise situation could lead to an even greater downer: financial disaster.

This issue is discussed in greater detail in “7 Sea Level Rise Real Estate Questions.”

Florida Senate Bill Calling for State Level Sea Level Rise Office and Task Force Advances in Tallahassee

With up to 3 feet of sea level rise predicted in the next 40 years and $300 billion worth of real estate at risk due to flooding by the end of this century, Florida continues to furiously work to address this offshoot of global warming.

The state went from essentially denying the existence of climate change and sea level rise during Gov. Rick Scott’s tenure to playing catchup when Gov. Ron DeSantis took office in early 2019. DeSantis was roundly applauded for appointing a Chief Resilience Officer to take on the problems posed by sea level rise flooding and climate change. Now the state senate is advancing a bill that would create a Statewide Office of Resiliency and Statewide Sea-Level Rise Task Force .

If the bill passes, the Office of Resiliency would create sea level rise projections that would be reported directly to the governor for use in policy-making. The task force would be comprised of nine members, including the Chief Resilience Officer and Department of Environmental Protection’s Chief Science Officer.

Sen. Tom Lee, the lead sponsor of the bill (SB7016), told FloridaPolitics.com, “Whoever picks up the ball and begins to run with it here will have to hit the pavement running … I acknowledge that.”

In the absence of federal and state leadership and response coordination, counties, local governments and private interests have formed regional commissions on their own to address sea level rise flooding, which is already threatening real estate, roads and infrastructure in many communities. Buyers, sellers, owners and real estate agents need to stay informed about their activities. Their ability to address sea level rise flooding will have a substantial impact on individual properties, neighborhoods, taxes, and flood insurance.

The Destructive Relationship Between Sea Level Rise and New Coastal Real Estate Development

Living in a coastal community that’s experiencing sea level rise flooding, I’m amazed at the hundreds of millions of dollars of new commercial and residential real estate being built in neighborhoods that are flooding today or that will soon be subject to floodwaters as the seas continue to rise.

When I ask my real estate agent friends what they think about the situation, they are always quick to remind me that Florida’s economy is heavily reliant on new building projects and the jobs, investment and tax dollars they bring for its very survival.

Many cities and towns along he Atlantic, Pacific and Gulf of Mexico coastlines are equally addicted to new development to keep their economies rolling and their governments solvent. There is, however, clearly a downside to this relationship.

As sea levels continue to rise, those same coastal cities and towns are going to have to start to invest heavily in flood mitigation strategies, such as raising roads and water and sewer pipes, building or raising sea walls and installing pumps. In some cases, they may even have to buy-out homes and whole neighborhoods that flood repeatedly. When this day arrives — and it has already arrived in parts of the Florida Keys and other vulnerable locations — what seemed like a good idea today — allowing hundreds of millions of dollars in new development in areas vulnerable to sea level rise — will have enormous costs to taxpayers and property owners.

Taxpayers will have to pay the tab to protect the expensive new flood mitigation projects. And the higher taxes to pay for those projects, combined with the higher insurance premiums that go hand-in-hand with sea level rise flooding, could cause property values to plummet.

Linda Shi, an assistant professor in Cornell University’s department of city and regional planning, wrote an op-ed titled “The fiscal challenges of climate change” for the Boston Globe. In it, she explains the challenge posed by new coastal development in the age of rising seas. She studied the Massachusetts coastline in detail and discovered:”Statewide, 40 percent of local revenues come from property taxes; along the coast, 60 percent; and in some coastal suburbs, 70-80 percent. State expectations that local governments self-finance most of the services they provide inevitably incentivize continued development wherever possible, placing coastal sites and cities on a collision path with rising seas.”

Shi says the negative cycles could be reversed if cities and states included fiscal considerations into sea level rise flooding vulnerability assessments. She also said regional land-use planning agencies and non-governmental organizations could help by evaluating “how climate change affects local budgets, how fiscal vulnerability and adaptation choices impact the region and vice versa.” Their input would help communities to decide where to allow new real estate developments to minimize the eventual costs that arise due to sea level rise flooding.

The future costs of placing new developments in or near sea level rise flood zones is an important issue to consider today. Making informed decisions will protect subsequent generations from the high cost of protecting or decommissioning billions of dollars worth of real estate our generation knew was at-risk before ground-breaking shovels were turned.

The State of Septic Systems Has to be Considered when Purchasing Coastal Real Estate Under Pressure from Sea Level Rise

When purchasing real estate in coastal areas, buyers need to ask whether a property of interest is has a septic system and how well its operating. This question is especially important now that sea level rise is causing thousands of septic systems to operate less efficiently and even fail — sometimes well inland from the ocean.

Most septic systems take household waste water and pipes it into a holding tank buried in the yard. There, the solids sink to the bottom and the liquids flow into a leaching field where microbes in the soil treat and filter out the remaining impurities. Ideally, after that, the treated, purer water eventually flows into groundwater, nearby rivers and streams or the ocean without a problem.

Sea level rise disrupts the process by forcing the water table to rise. This saturates the soils that are needed to treat and filter out the impurities. As a result, the septic system outflow can pollute yards and contaminate groundwater and water on the surface.

When this happens, property owners usually have two choices: 1) Invest in improvements — such as raising the septic system if that’s feasible and adding more dirt to the system — or 2) Abandoning the septic system and tying into a city wastewater treatment system.

To protect themselves from unexpected expenses, real estate buyers in coastal areas need to know if a property is served by a septic system or already tied into the municipal sewer system. If the answer is septic, they need to have a home inspector determine if the system is operating well and how long it will be effective as seas continue to rise.