NASA: Greenland and Antarctica Ice Melt Speeding Up Sea Level Rise

NASA reported this week that Greenland and Antarctica ice sheets are melting six times faster than they did in the 1990s, a development that could have a severe impact on coastal real estate.

NASA scientists published their statement on the Jet Propulsion Laboratory website in response to a study by the Intergovernmental Panel on Climate Change that showed Greenland and Antarctica combined lost 6.4 trillion tons of ice in three decades. “Unabated, this rate of melting could cause flooding that affects hundreds of millions of people by 2100,” according to NASA.

Researchers used observations from 11 satellite’s that monitor Greenland and Antarctica ice loss to arrive at their disturbing conclusion. They calculate that the meltwater has raised global sea level by .7 inches. This doesn’t sound like much, but it can have a significant effect on coastal populations. “Every centimeter of sea level rise leads to coastal flooding and coastal erosion, disrupting people’s lives around the planet,” said Prof. Andrew Shepherd, a scientist at the University of Leeds.

Ice melt isn’t the only factor fueling sea level rise. Ocean heating and expansion and the melting of smaller land-based glaciers also contribute to higher seas.

UN Climate Report Makes Dire Prediction for Climate Change and Sea Level Rise

Humans need to nearly half greenhouse gas emissions over the next decade or face dire climate consequences. That’s the warning issued by the United Nations’ World Meteorological Organization which released its annual State of the Global Climate report this week in New York.

“Greenhouse gas concentrations are at the highest level in 3 million years – when the Earth’s temperature was as much as 3 degrees hotter and sea levels some 15 meters higher,” said UN Secretary-General Antonio Guterres. “We count the cost in human lives and livelihoods as droughts, wildfires, floods and extreme storms take their deadly toll.”

The WMO’s report discussed the many signs of climate change experienced around the globe in 2019, including increased heating of land and ocean, accelerated sea level rise, and ice melt. Each decade since 1980 has set a global heat record, and 2016 was the hottest year on record. Scientists say that record will likely be broken in the next five years.

“We need all countries to demonstrate that we can achieve emissions reductions of 45 percent from 2010 levels this decade and that we will reach net-zero emissions by mid-century. We know this is the only way to limit global heating to 1.5 degrees Celsius,” Secretary Guterres said.

WMO Secretary-General Petteri Taalas said not heeding reducing the release of greenhouse gases will continue to hasten sea level rise. “Reported record temperatures in Antarctica were accompanied by large-scale ice melt and the fracturing of a glacier which will have repercussions for sea level rise,” Secretary Taalas said.

The UN and WMO are calling on developed countries to commit $100 billion a year toward developing renewable energy sources and green technologies.

Sea Level Rise Poses Challenges for Commercial Real Estate

Residential real estate isn’t the only sector facing challenges from the threats posed by climate change and sea level rise flooding. Commercial real estate is under pressure, too.

According to a report recently released by Dechert LLP, a global law firm that advises corporations, financial institutions, sovereign states and wealthy individuals, “Climate change is forcing the commercial real estate industry to re-think the effectiveness of flood insurance that developers, lenders and investors have relied on for decades.”

The report notes that extreme weather and sea level rise flooding are pushing the commercial flood insurance system “to a breaking point.” Specifically, the report notes that 14 weather and climate disasters in the United States resulted in $91 billion in damages. Each event had losses exceeding $1 billion mostly from damage to residential and commercial real estate.

Among the challenges faced by the commercial real estate sector discussed in the report:

1) The National Flood Insurance Program (NFIP) administered by Federal Emergency Management Agency is financially unstable. The program is now running over $20 billion in the red, and it relies on government bailouts to continue to operate. Its authority to operate is due for renewal next fall. If it’s not renewed the report says, “The potential for disruption is most concerning for property owners in special flood hazard areas seeking mortgages from federally-backed entities and federally regulated banks because flood insurance is legally required for these loans.”

2) FEMA’s flood maps, which are supposed to identify a commercial property’s exposure to flood risk, are notoriously outdated and they do not consider sea level change or increased flooding estimates. “This has led to costly and catastrophic errors,” the report says. “For example, in 2018, at least 140 Florida homes were demolished following the destruction of Hurricane Michael. However, the relevant FEMA flood map reflected that the properties were in flood zone X (0.2% chance of flood in any year) and flood insurance was not required.”

3. Flood insurance only covers damages, not loss of value. The report says this is a problem because as properties become increasingly vulnerable to flooding, the will inevitably lose value over time. “The worst-case scenario here is particularly bleak,” the report says. “Billions of dollars of real estate will be underwater not only in terms of their market value being less than the outstanding mortgage debt, but also because these properties will be at greater risk of someday being literally underwater. Refinancing these mortgages and insuring these properties will undoubtedly become more challenging each passing year.”

The report goes on to explain how uncertainty in the flood insurance market is leaving the the commercial real estate finance industry without a “uniform strategy to underwrite the increased frequency and severity of flooding due to climate change.” The report says the public and private flood insurance industry “will soon be forced to adjust to face the environmental and economic realities of a country more prone to frequent, catastrophic and repeated flooding.”

The authors predict that the commercial real estate finance industry will evolve to meet the challenges to the marketplace. They identified several issues that need to be monitored: “Among the questions are whether the National Flood Insurance Program will be reformed, whether private flood insurers raise their rates to levels only wealthy real estate sponsors can afford, and whether banks and real estate bond buyers will call for more detailed disclosure to more accurately balance the risk of loss.”

The Dechert LLP report focuses on the commercial real estate industry, but most of its discussions, conclusions and warnings also apply to residential real estate. Buyers, sellers, owners and real estate agents in coastal areas should take the time to read this insightful report to better understand the broader issues that will impact their local real estate markets and property values.

New Report Names Miami the “Most Vulnerable” City in the World for Sea Level Rise Flooding

A new report by Resources for the Future (RFF), a nonpartisan think tank, concludes that Miami will soon become “the most vulnerable major coastal city in the world” for sea level rise flooding, storm surges and other impacts of climate change. The experts based their conclusion on the fact that Miami has billions of dollars worth of real estate and other assets that will be put increasingly at-risk as the seas continue to rise between now 2040.

The RFF published a graphic-rich report titled “Understanding Sea Level Rise in Florida, 2040” last week that illustrates the challenges faced by Miami and the entire state of Florida. The report was created using data collected by the Climate Impact Lab, a group of scientists, economists and other experts who are trying to quantify the impact climate change will have on the world economy in real numbers.

In a press release, the RFF listed the following potential impacts on Florida if the world doesn’t reduce the greenhouse gas emissions that are driving global warming and sea level rise flooding:

  • Severe “100-year floods” will potentially occur once every few years rather than once a century, endangering about 300,000 homes, 2,500 miles of roadways, 30 schools, and four hospitals statewide.
  • Rising seas also threaten the 490,000 Floridians who live on land less than 3 feet above the high-water mark, and coastal properties worth an estimated $145 billion in property value. The counties with the largest number of people facing these risks are Miami-Dade, Broward, Pinellas, Monroe, and Hillsborough.
  • In some areas—the Keys in particular—it is unlikely that communities will be able to meet the costs of raising all public roadways to accommodate higher sea levels by 2045, suggesting that some roads and neighborhoods will need to be abandoned.
  • Miami has over $400 billion in assets put at risk by coastal flooding and storms—the largest amount of any major coastal city in the world.
  • Extreme temperatures and other impacts will seriously affect public health. In a moderate emissions scenario, the rate of mortality is projected to increase by 3.8 deaths per 100,000 Florida residents per year—that’s roughly 1,000 additional deaths annually by 2035.
  • Federal carbon pricing policies, which would reduce these risks, are projected to cost less than $1,000 annually for Florida households earning under $99,000 per year, with costs for higher earners reaching as high as $5,000 annually.

The study’s co-authors said: “Addressing climate change has up-front costs. But failing to address climate change? Those costs are likely to be much greater and long lasting.”

The RFF research was funded by the VoLo Foundation, a private family foundation established to educate the public to create a sustainable and secure planet for generations to come. 

This report further reinforces the fact that buyers, sellers, owners and real estate agents in coastal areas need to be aware of sea level rise and its impact on a property of interest, neighborhood and community to make informed decisions that will protect their financial futures.

Real Estate Buyers Beware: Sea Level Rise is Accelerating

To protect their investment, real estate buyers in coastal areas need to find out if a property of interest, neighborhood and community are currently experiencing sea level rise flooding. They also need to find out if and when sea level rise flooding will impact the property in the future.

The last point is difficult because sea level rise projections are constantly changing. Unfortunately, for most locations the change is usually for the worse. For example, a report released January 30 by William & Mary’s Virginia Institute of Marine Science (VIMS) concluded that the rate of sea level rise is accelerating at most locations along the U.S. coastline.

The scientists studied tide gauge data from 32 locations collected over the last 51 years to reach their conclusion. “Acceleration can be a game changer in terms of impacts and planning, so we really need to pay heed to these patterns,” said VIMS emeritus professor John Boon.

VIMS Marine Scientist Molly Mitchell said, “We have increasing evidence from the tide gauge records that these higher sea-level curves need to be seriously considered in resilience planning efforts.”

When evaluating a piece of property, buyers need to consider how likely it is that sea level rise flooding will impact the property and when it could occur. This is a complicated issue that requires an understanding not only of the flooding risk but what the individual property owner and community can potentially do to prevent the flooding. Another consideration for buyers is how the flooding will impact their property value, maintenance costs, flood insurance premiums and taxes. These issues are discussed in detail in “7 Sea Level Rise Real Estate Questions for Buyers, Sellers, Owners, & Real Estate Agents.”

Virginia Beach Needs Billions of Dollars to Fight Sea Level Rise Flooding

An engineering firm that spent five years studying Virginia Beach’s flooding problem recently presented a report to the city council that says the city will have to spend up to $3.8 billion to manage sea level rise flooding.

To draft its recommendations, Dewberry estimated that seas will rise about 1 1/2 feet between 2035 and 2055 and 3 feet between 2065 and 2085. Sections of the city already experience coastal flooding. More areas will be inundated as the seas rise.

Among the firm’s recommendations are the construction of high-tech flood gates along with more seawalls and levees. The engineers also said the city should consider buying out about 2,500 homes that are at risk of flooding and restricting development in vulnerable areas.

The city council and planning commission are going to consider all aspects of the report before approving its conclusions. Officials say they also need to consider funding sources. They say residents can’t afford to pay all of the billions of dollars needed to protect the city. They’ll have to seek federal assistance.

Communities all along the Atlantic, Pacific and Gulf of Mexico coastlines grappling with sea level rise flooding and the need to protect valuable real estate and other assets are struggling with how to pay for hundreds of millions and even billions of dollars worth of needed construction projects. Buyers, sellers, owners and real estate agents need to consider the plans when they’re deciding how to respond to the challenge.

Report Predicts 15%-35% Drop in Florida Home Values Due to Climate Change and Sea Level Rise

A report released by McKinsey & Company, a global management consulting firm, predicts that Florida homes exposed to sea level rise flooding and storm surge from stronger hurricanes — fueled by a warmer atmosphere and ocean water — could lose 15-to-35% of their value by 2050. That translates into $30 billion to $80 billion worth of devaluation.

The company, which studied past trends to arrive at the estimate, says if not effectively addressed, flooding could result in lenders no longer offering 30-year mortgages in affected areas. Furthermore real estate owners could get hit with higher insurance premiums and possibly lose access to insurance altogether if providers leave the market.

If the coastal real estate market faces a downturn due to sea level rise flooding, the report says there’s also a concern that property tax revenues will be reduced, leaving communities with less funding to address the problem.

The report’s authors warn that their estimates may be on the conservative side. Losses could be much higher if water, sewage and transportation systems are flooded or buyers become much more sensitive to climate risk when purchasing properties.

The researchers say Florida is going to have to make hard choices to address sea level rise flooding. The state will have to decide whether to protect the coasts with seawalls and other methods or abandon risk-prone areas.

To protect their financial futures, real estate owners everywhere need to pay close attention to how federal, state and local governments plan to protect their communities from the threat of sea level rise flooding.

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