Real estate developers rarely take the long-view when they’re considering new projects. They see their role in the economy as simply planning, building, and selling projects at the greatest return on investment. As a result, in Southeast Florida, billions of dollars worth of real estate development has proceeded even in areas known to be at risk of — or currently experiencing — sea level rise flooding. The Southeast Florida Regional Climate Change Compact — a partnership between Miami-Dade County, Broward County, Palm Beach County, and Monroe County — believes it’s time for real estate developers to recognize the larger threat sea level poses to the region and their industry and to get involved in mitigation efforts for the good of everyone.
To make their case, the Compact used a state grant to pay the Urban Land Institute (ULI) — a group comprised of 45,000 real estate and urban development professionals interested in creating sustainable communities — to assess the costs and benefits in cold hard cash of implementing projects now to address sea level rise flooding, which is expected to worsen as up to 40 inches of sea level rise accumulates by 2070.
ULI recently released its findings in a report titled “The Business Case for Resilience in Southeast Florida.” In it, researchers concluded that tens of billions of dollars will be lost over the next 50 years if the region doesn’t invest in resiliency, such as elevating structures and roads and infrastructure and building higher seawalls and berms, now. The report specifically estimates that spending $22.6 billion on flood mitigation between now and 2070 could prevent $56 billion in losses over the same period.
ULI said its approach to drafting the report was to view sea level rise not as a net negative but as an opportunity to actually build the economy by investing in resiliency today, an effort that would create business opportunities and new jobs. In a report summary ULI said: “The findings … identify opportunities for the real estate industry to achieve a positive return on investment by futureproofing developments and investing in community wide resilience infrastructure over time to build incremental solutions that protect people and property and grow the economy of Southeast Florida in years to come.”
The report, which is meant to convince business interests to join the sea level rise resilience movement, isn’t perfect however. It overlooks one of the most seemingly insurmountable problems unique to South Florida: The region’s real estate is built on porous limestone, so even if you block the rising seas with higher seawalls and other structures at the coast, the seawater will still migrate beneath the surface and cause flooding along the coast and well inland.
Despite this flaw, the researchers said the investment in resilience is worth it. They estimate Miami-Dade County will benefit from a 9 to 1 return on investment, Broward County 2 to 1, and Palm Beach County 1.3 to 1. Unfortunately, they did not see any benefit for Monroe County, which covers the Florida Keys. The report said the Keys population is too small to benefit compared with its highly populated neighboring counties to the north. Rhonda Haas, resilience officer for Monroe County, told the Miami Herald: “We are probably going to have to spend more per resident for resilience and that’s okay. Just because we have a lower rate of return on that investment, that doesn’t mean the Keys should not make the investment. We should and we are.”
The preface to the report notes that there are no easy answers to climate adaptation but all interests need to get involved. It also warns developers that not participating in mitigating sea level rise flooding could lead to negative consequences beyond their control. “Developers have control over the confines of their own parcels,” it states, “but they could be faced with negative consequences from reduced investor interest and lack of financing and insurance –if this is the case, it may be too late to recover. Though financial assets are at risk, this is also the time for the real estate industry to coordinate with the public sector on resilience planning initiatives and co-create new models for partnerships, policy, and funding to help the region continue to thrive.”
The lesson from the report for everyone living and operating businesses in coastal communities in Southeast Florida and everywhere else is that we’re all in this together and saving our lifestyles and livelihoods will take a team effort.