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”.

U.S. Army Corps of Engineers to Reconsider Miami Storm Surge Plan

The U.S. Army Corps of Engineers folded to public opposition this week and agreed to hold off on a controversial plan to construct flood gates and high walls along the coast to prevent storm surge from inundating the city.

The Cops sent a letter to Miami-Dade County officials notifying them that they will spend over $8 million and up to five years working to come up with new plans that use more natural solutions to fending off storm surges in way that would also help Biscayne Bay, which is suffering environmental degradation due to sewage spills and other human activities. This basically takes the Corps back to square one after an initial $3 million and three years were spent drafting a plan to address storm surge.

Opposition to the initial plan came from residents who did not want to see the construction of tall and unsightly floodgates and walls blocking the view along the city’s coastline. The Corps had also proposed elevating flood-prone structures and buying out owners of properties that could not be saved. In addition to considering natural surge-control solutions, the corps has also agreed to consider other on-going projects — such as Everglades restoration — that could be impacted by its activities.

It’s important to note that the Corps’s proposed $4.6 billion surge-control project was not designed to eliminate or mitigate sea level rise flooding. Miami-Dade County has adopted its own strategy for dealing with sea level rise flooding. Some projects are already in the construction phase.

“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.

Sea Level Rise Added Billions of Dollars to Hurricane Sandy’s Storm Surge Damage

When it comes to sea level rise, buyers, sellers, owners, and real estate agents need to be aware of both the increased occurrence of nuisance flooding — tidal floodwaters that inundate neighborhoods on sunny days — and storm surges that can strike quickly and inflict billions of dollars in damages in a very short time.

A study recently released by researchers at Climate Central, an independent organization of scientists and journalists dedicated to informing the public about climate change, demonstrated the threat sea-level-rise-fueled storm surges pose to coastal communities. The researchers gathered information about Hurricane Sandy and concluded that a few additional inches of sea level rise contributed over $8 billion dollars worth of damage to the $62.7 billion the super storm inflicted on New York, New Jersey and Connecticut.

To arrive at that astonishing figure, the researchers analyzed water levels during Hurricane Sandy and compared it with an estimate of how high the water would have risen without human-caused sea level rise. Based on a conservative estimate of just over four inches of sea level rise added between 1900 and 2012, the year Hurricane Sandy struck, they estimated that sea level rise added $8.1 billion to the total tab the states had to spend repairing storm damage, including power grids and transportation networks.

The researchers noted in their analysis that economic damages may have been much higher than stated in their report. “Our estimates do not account for potential long-term economic effects, such as losses and gains in broad economic activity associated with employment and production changes across industries in the aftermath of a damaging cyclone event,” they wrote.

Climate Central’s chief scientist and CEO Benjamin Strauss, Ph.D., put the report in perspective: “Just a hands-width of sea level rise from climate change caused more than 10 percent of the damage from Sandy’s towering floodwaters. The implications are enormous. For any lesser ocean flood, the percentage must be higher.”

Clearly buyers, sellers, owners, and real estate agents can’t afford to ignore the influence ever-rising seas have on damaging storm surges when they’re evaluating coastal properties.

New Report: Millions of U.S. Property Owners Are Unaware Their Properties Are At Risk of Flooding

As many as six million U.S. properties face a substantial risk of flooding without their owners being aware of the threat. That’s according to a report recently released by the First Street Foundation, a non-profit research and technology group committed to defining America’s flood risk.

The researchers combined data from a number of different sources to develop a model that determined 1.7 times more properties face a substantial risk of flooding than are awarded that designation by the Federal Emergency Management Agency (FEMA), which administers the Federal Flood Insurance Program.

In real numbers, 14.6 million properties are at substantial risk of flooding. However, due to the well-known shortcomings of FEMA’s chronically outdated and/or incomplete flooding maps, the report says the owners of 5.9 million properties are “currently unaware or underestimating the risk they face because they are not being identified as being within the FEMA designated SFHA (Special Flood Hazard Area) zone.” Interestingly enough, the researchers also found that some areas that are listed by FEMA as being in SFHAs actually shouldn’t be.

The danger to real estate owners in all of this is that millions of property owners who should buy flood insurance might not have it because they’re not aware of the risk. Others who have it, might be paying for coverage they don’t actually need. Among the problems for homes that flood is they can be expensive to repair, experience a loss in value, and can be hard to sell. They can also flood again and again, compounding the owner’s misery.

When creating the report, the researchers considered many potential sources of flooding, including rivers, rainfall, storm surge and tidal source. To estimate the future risk of flooding, they also took climate change-generated extreme weather and sea level rise into account. First Street estimated that 21.8 million properties are at risk of flooding this year. Climate change will boost that number by 1.7 million properties over the next 30 years.

First Street created the report to help real estate buyers and sellers to make informed decisions regarding properties at risk of flooding. This is especially important for buyers since states vary widely regarding the amount of information sellers have to disclose to them and the flood insurance history of a property is protected by privacy laws.

In addition to the groundbreaking flood report, First Street has created a tool called Flood Factor that real estate buyers and owners can use to determine the current and future risk of flooding to a particular property by entering the address. When put to the test, Flood Factor provided reports for some addresses but not all addresses, including those that are located in well-known flood prone areas. A screen would appear that said “Information for (X Address) is unavailable. Please try another location or find out why this address isn’t listed.” When we clicked to find out why an address wasn’t listed we were taken back to the address search screen.

When First Street works out the kinks, Flood Factor will be a very useful resource to all real estate owners and buyers. Knowing the risk of flooding with a few key strokes will even the playing field in real estate transactions in a way that’s now not always possible. The researchers also hope that the information will be used by mortgage providers and insurers to better assess risk and by government planners to decide how to better address flooding.

More Powerful Storm Surges and Sea Level Rise Flooding Force Charleston, SC, to Ponder Its Future

Charleston, South Carolina, a densely developed peninsula surrounded by creeks and rivers that pour into the ocean, has reached the point where sea level rise flooding and the threat of ever more powerful storm surges threatens its very existence. The title of a recent article in The Post and Courier sums up the situation quite succinctly: “Charleston faces an existential choice: Wall off the rising ocean or retreat to higher ground.”

As the city celebrates its 350th year, the Army Corps of Engineers released a proposed plan to see it through 50 more. The Corps is calling for the construction of an 8-mile protective wall around the core peninsula along with pumps to help keep the city dry. Additional infrastructure improvements, such as raising flood-prone roads and clearing spaces to store water after heavy rains, may also be needed. The project would cost an estimated $1.75 billion with locals responsible for $600 million of the tab.

As with many other cities considering massive projects to protect valuable coastal real estate from inundation, funding for the proposed project is a major sticking point that has only been made worse by the budget-busting coronavirus pandemic.

Some residents see Charleston’s historic value and ability to draw 7 million tourists a year as reason alone to mount an aggressive effort to save it. They’re concerned that if they don’t get started soon, flooding will diminish the city’s value.

On the other hand, The Post and Courier article by Chloe Johnson hints that some residents exhausted from past floods are considering moving out. And at least one academic worries that the wall will give people a false sense of security that might result in increased investment in the peninsula. Andy Keeler, a climate expert at Eastern Carolina University, told the paper that this can result in a more painful economic collapse when sea level rise and storm surges eventually defeat the man-made defenses.

The Army Corps of Engineers estimates that without the wall and other improvements, Charleston will lose half of its historic structures to flooding by 2075. Real estate buyers and owners in Charleston and other coastal cities and towns confronting similar challenges need to consider the costs and benefits of proposals to rein in the water — and the potential that projects will never be built — when deciding how to react to the growing threat of sea level rise flooding and more powerful storm surges.

Coastal Real Estate Buyers, Owners & Agents Need to Start Paying Attention to Storm Surge Prevention Projects

A major impact of global warming is stronger storms with more powerful storm surges. Climate change-driven sea level rise will also further magnify the ability of storm surges to inundate valuable real estate.

Cities along the U.S. coast are shifting from considering the threats stronger storm surges pose to local real estate to actually proposing solutions. Real estate buyers and owners need to pay close attention to what’s appearing on the drawing boards. The surge control projects could impact their property values, businesses, tax rates and quality of life.

Real estate agents need to stay current so they’re armed with facts when buyers, sellers and owners ask for the latest information about projects in their farm areas.

In Florida’s Miami-Dade County, ground zero for sea level rise flooding, for example, the U.S. Army Corps of Engineers recently unveiled a draft plan that would spend $4.6 billion on a series of 1-to-13 foot tall sea walls and pumps to protect 2.8 million people and tens of thousands of buildings worth $311 billion from storm surges. According to a Miami Herald article, the project also calls for moveable barriers to be installed at the mouths of three waterways and the elevation of thousands of buildings.

The Corps of Engineers is holding online public hearings regarding storm surge the plan this week. The impact on some property owners could be enormous. For example, a thirteen foot wall and pump stations would certainly change the view from front-line properties. The loss of a beautiful view would impact the quality of life for the owners as well as property values.

In addition, current estimates are that local taxpayers would have to bear up to 35% of the project cost while the federal government would pick up the remainder. Depending on how the project financing is structured, property owners could face substantial tax hikes. (After Covid-19 rocked the economy and government budgets, funding is bound to be a big X-factor even for projects that receive a stamp of approval.)

According to an article on the YaleEnvironment360 website, ambitious storm surge control projects are also being considered in Charleston, SC, Galveston, TX, coastal communities in New Jersey, and in and around New York City. Real estate buyers and owners in coastal areas need to keep up on the latest developments to weigh the benefits and costs of the the proposed projects. Put another way, they need to ask if the projects will protect their property, property value and quality of life without emptying their wallets.

It’s important to note that the storm surge project in Miami-Dade isn’t intended to protect communities from the increased tidal flooding that will occur as sea levels continue to rise in the decades to come. That will take a whole other effort, if it’s possible at all. This is due to the fact that South Florida is built on porous limestone, which allows seawater to easily flow beneath structures such as seawalls. Things are, indeed, getting complicated for coast-dwellers.

Boston Mounts an Aggressive Plan to Battle Sea Level Rise Flooding

Much of Boston, MA, is built on landfill, which makes it especially vulnerable to sea level rise flooding. With estimates ranging anywhere from 10 inches of global sea level rise to over seven feet by the end of this century, the city is mounting an aggressive plan to hold back the rising seas, according to a Washington Post article.

With over nine inches of sea level rise racked up since the beginning of the last century, areas of Boston are already experiencing sea level rise flooding that’s especially noticeable during extra high king tides in the fall.

To fight back against sea level rise flooding and the higher than normal storm surges it can bring, the Boston’s mayor is dedicating more than $30 million a year to address the problem. Among the projects are elevating streets and parks, and building higher berms and sea walls. City officials are concerned that they’re not doing enough to protect residents and real estate in the poorest neighborhoods, but they are considering options.

Despite the effort to combat sea level rise, Michael Oppenheimer, a professor of geosciences and international affairs at Princeton University, told the Post, Boston and other coastal cities may still ultimately have to retreat from the rising seas. He said, “It is what a lot of cities will have to do because a lot of neighborhoods are not defensible.”

Boston’s experience with sea level rise flooding as discussed in this article is yet another example of why buyers, sellers, owners and real estate agents in coastal areas need to educate themselves on which properties and neighborhoods are experiencing sea level rise flooding and what, if anything, can be done to hold back the rising tides.

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