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Sea Level Rise Already Causing Billions in Home Value To Disappear (axios.com) 280

Posted by msmash from the impact-analysis dept.
Sea level rise may seem like a far-off threat, but a growing number of new studies, including one out this week, shows that real estate markets have already started responding to increased flooding risks by reducing prices of vulnerable homes. From a report: According to a new report by the nonprofit First Street Foundation, housing values in New York, New Jersey and Connecticut dropped $6.7 billion from 2005 to 2017 due to flooding related to sea level rise. Combined with their prior analysis of 5 southeastern coastal states with $7.4 billion in lost home value, the total loss in 8 states since 2005 has been $14.1 billion. A recent slew of studies show how the housing market is responding to the increasing risk of coastal flooding -- with billions in value disappearing as investors wake up to the systemic risk.
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Sea Level Rise Already Causing Billions in Home Value To Disappear More

Sea Level Rise Already Causing Billions in Home Value To Disappear

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  • Yes, but other property is increasing in value. (Score:2, Insightful)

    by Anonymous Coward

    What is not waterfront property today, will be in the future. If I had lots of money I'd be buying it up now to resell later as increased value waterfront property.

  • My oceanside property in Colorado should be doing great in a couple of decades!

  • Not from sea level rise (Score:5, Interesting)

    by 110010001000 ( 697113 ) on Sunday August 26, 2018 @06:13PM (#57199482) Homepage Journal
    Coastal homes are flooding because you have destroyed the buffer zones (marshlands/swamplands) that stopped the water from entering the area. What did you think would happen when you destroy the buffer zones for housing? It has nothing to do with climate change/whatever. But no one wants to address that issue, because there is no money in it.

    • Re:Not from sea level rise (Score:4, Insightful)

      by LynnwoodRooster ( 966895 ) on Sunday August 26, 2018 @06:16PM (#57199506) Journal
      In fact, we want to fill in those marshes and wetlands so we can build more homes close to the beach! Swamp land is so cheap that way! Buffer shmuffer, cheaper land to build - and more tax base for the city/county/State!

    • Interestingly enough, that isn't universally true. I noticed a particular island I dream of having a home on seriously discounting costal homes, and there is no buffer zone. There are other factors, but unless these homes are on non-traditional stilts, there is a huge discount.

    • Coastal homes are flooding because you have destroyed the buffer zones (marshlands/swamplands) that stopped the water from entering the area. What did you think would happen when you destroy the buffer zones for housing? It has nothing to do with climate change/whatever. But no one wants to address that issue, because there is no money in it.

      You are right that destroying the buffer zones doesn't help the situation but that doesn't change the fact that sea level is rising and those buffer zones would be under water sooner or later anyway.

    • Not only that, but in Florida, for example, especially around the Miami area, it's land subsidence, not water rise, that is causing problems.

      Somebody might have considered that when you build on land that was previously not much more than swamp, there might be reason it was swamp.

      In any case: the Maldives aren't sinking, their land area is actually increasing. Same with just about every other island you can name.

      There may be a few exceptions, but they are damned few.

      But I do understand real esta
      • I suppose I should add that of course the story is about land VALUE disappearing out of fear, not land actually disappearing.

        It's a scare story. Nothing more.

        Al Gore and many others are still enjoying their multi-million beachfront homes.

  • slashdot at its worst (Score:5, Insightful)

    by Anonymous Coward on Sunday August 26, 2018 @06:33PM (#57199642)

    Climate change is yet another of those topics that brings out the worst in this "community". Morons either outright denying the reality of CC and its horrific impacts, or other morons trying to prove how smart they are by saying things like, "The real problem isn't sea level rise its the destruction of marshes."

    This place could be so much more than it is, if it weren't for the mental masturbators who can't simply accept the view of the overwhelming number of experts in a field.

    • Re: (Score:2, Insightful)

      by 110010001000 ( 697113 )
      Who is denying the reality of climate change? My point is that the reason your flood plain or fucking beach house is flooding IS BECAUSE THERE IS NOTHING TO STOP THE WATER FROM ENTERING YOUR HOME. You drained the swamp, destroyed the wetlands. What the fuck you think is going to happen? No number of "carbon credits" is going to change it.

      • Re: (Score:2, Insightful)

        by HornWumpus ( 783565 )

        At least rant about the right boogeyman. It's the dams that are holding back the silt that are wrecking coastal beaches.

        Floodplains flood. Hence the name. Makes for great soil. Worth losing 1 crop in x. Still a nice farming business.

        • Dams are even worse. That is why when I hear the climate change zealots talking about clean energy from hydro power I get sick. Dams are NOT clean power. They do a huge amount of ecological damage. But I have realized that people really don't care about the environment - it is really just another political and financial tool to leverage against each other. Oh and that $60,000 Tesla you see driving around? It isn't doing a damn thing to help the environment.
    • Unlike the morons who believe every worst possible headline. There could be a headline on Slashdot, "AGW To Cause World to End Tomorrow" and people would defend it. Then there could be a headline, "AGW Caused Earth to Explode Yesterday" and there would still be people who believed it blindly.

      That's what happens when science gets mixed up with politics: people choose their side and follow it without thinking. There aren't many people even here who understand how to calculate the black body temperature of

    • This place could be so much more than it is, if it weren't for the paid shills

      .

      But why should, of all sites, Slashdot not have them? Just grab a bag of popcorn and enjoy the view, the times of sensible discussion on this board have been over for at least 5-10 years.

  • Problem for rich people (Score:5, Insightful)

    by reanjr ( 588767 ) on Sunday August 26, 2018 @06:36PM (#57199658) Homepage

    Primarily rich people and real estate investors wild be hit, while the middde class homes a bit farther inland will increase in value. Win/win.

    • But the majority of people are renting, so they'll just get pushed out by gentrification into ever crappier neighborhoods.

    • Re:Problem for rich people (Score:4, Interesting)

      by Ichijo ( 607641 ) on Sunday August 26, 2018 @08:47PM (#57200228) Journal
      Except when they use their political influence to get the city to reject managed retreat [kpbs.org] as a coastal erosion adaptation strategy. Guess who those homeowners expect to pay to rebuild the coastline?

    • Primarily rich people and real estate investors wild be hit, while the middde class homes a bit farther inland will increase in value. Win/win.

      There was a story on this recently in the Washington Post [washingtonpost.com].

      The study found the drop in prices appears to be driven primarily by investors buying multiple properties or second homes. Such buyers tend to be wealthier and better educated than owners who occupy their coastal homes, said Ryan Lewis, an assistant professor of finance at the University of Colorado and a co-author of the study.

      “Sophisticated buyers ... demand a discount to bear the risk of future sea level rise,” Lewis said in an email.

      So the rich people and the real estate investors are the ones getting properties cheap(er).

  • Ahh, but what's happening to the stock prices of companies which are converting coastal properties into cool undersea bases?

  • They were overvalued. (Score:5, Insightful)

    by Fly Swatter ( 30498 ) on Sunday August 26, 2018 @06:41PM (#57199698) Homepage
    Common sense says don't build on a flood plain. Oh and stop destroying marshlands and wetlands that protect from flooding in the first place.
  • I read the report. They're including events like Hurricanes as part of their "sea level rising" flooding damage totals. That seems rather suspect to me since they don't indicate whether or not they subtracted out the net rise in sea levels from the total storm surge damage from hurricanes.
    • Not to mention that total accumulated cyclone energy is on a decided downtrend, historically. We're having fewer storms, and fewer big storms. We're building more expensive buildings right on the beach though, so when there IS a storm, it does more financial damage.

  • This is as silly as reporting the damage done by wildfires in $. Yes, more people are building multi-million dollar homes out in the wilderness, so there's "more" damage done by fires that 50 years ago would barely have been noticed.

    Just like sea level rise - the more idiotic people build in flood plains, the more "damage" sea level rise will do to people....when it's the people putting themSELVES in that danger.

  • national flood insurance (Score:5, Insightful)

    by ooloorie ( 4394035 ) on Sunday August 26, 2018 @07:29PM (#57199922)

    They're not responding to sea level rise, they are responding to the expiration of the federal flood insurance program.

    As long as the federal flood insurance program was in place, people whose houses got flooded simply could rebuild a shiny new house at taxpayer expense again and again.

    As for sea level rise, it is happening and going to continue at roughly the same rate for a couple of centuries at least, no matter what we do, so that can't be the cause of sudden changes in coastal real estate prices. Whatever the threat may or may not be, it has been priced in for years.

    Furthermore, homes depreciate over about 30 years, so anything beyond that horizon is not worth worrying about.

    • not only that, but they're going to claim recession of 2008 didn't cause some of the property value drop??!!! bullshit

    • ... sea level rise...that can't be the cause of sudden changes in coastal real estate prices

      Unfortunately climate change does not work "gradually over hundreds of years". We in NY/NJ getting hit with hurricanes the likes of which we have not been seen before. Prime real estate at ocean front either got swept away and what is left of it lost all value. Even in my far from ocean town the houses close to river cannot be sold any longer.

      • Re:national flood insurance (Score:5, Insightful)

        by ooloorie ( 4394035 ) on Sunday August 26, 2018 @10:08PM (#57200542)

        Unfortunately climate change does not work "gradually over hundreds of years".

        We're talking about sea level rise, not climate change. Sea level rise necessarily is slow and gradual.

        We in NY/NJ getting hit with hurricanes the likes of which we have not been seen before. Prime real estate at ocean front either got swept away and what is left of it lost all value. Even in my far from ocean town the houses close to river cannot be sold any longer.

        The only reason "ocean front real estate" is "prime" is because of massive government subsidies. Prior to those, people avoided the ocean front because they would be regularly subject to storms and other natural disasters.

        It's interesting what straws you people grasp at [arizona.edu] to justify your crony capitalism.

    • This. It's all about subsidized flood insurance. Without it, people would have to pay realistic rates for flood insurance, meaning that many properties would become worthless - as they should be.

      FWIW, here's the FEMA page about the flood insurance renewal. They write: "NFIP reauthorization is an opportunity for Congress to take bold steps to reduce the complexity of the program and strengthen the NFIP’s financial framework so that the program can continue helping individuals and communities take the c

    • Furthermore, homes depreciate over about 30 years, so anything beyond that horizon is not worth worrying about.

      Structures may depreciate over time. But the land increases in value. Otherwise real estate wouldn't be considered an investment. Also even though the structure is "depreciated" the cost of new construction is increasing so the market value may actually still be higher than when purchased. In some very low cost areas people look at a house as somewhere to live and they die there and don't give a darn what it's worth at the end. In other places, the appreciation is part of their financial plans.

  • Costs to capital (Score:4, Interesting)

    by manu0601 ( 2221348 ) on Sunday August 26, 2018 @07:31PM (#57199930)
    This is about the cost for capital, but sea level rise impact on the whole economy is likely to be much larger.

  • If property tax bills aren't dropping then this valuation analysis is junk.

  • Not so much sea level rise as risk of sea level rise. The news flow about sea level rises is hurting values more than actual sea level rises.

  • The First Act (Score:3)

    by Jim Sadler ( 3430529 ) on Monday August 27, 2018 @06:37AM (#57201796)
    Yes, loss of value as well as much higher taxes are a consequence of rising seas. Your tax dollars have been supporting the alteration of military bases to cope with rising waters. Miami has a large expense already in the creation of pumping systems to keep the beach area from frequent flooding. What we are doing now should have been done 30 years ago when Al Gore made public the tragedy of rising seas. Now the second shoe will drop. As the building values drop the insurance companies will want to charge the same sums or even more for buildings that are now at half value due to threat of flooding. It also means that there will be no interest in taking new customers. Banks will not write mortgages due to flood risks which halts all new construction . As insurance companies pay out for losses the banks that own the insurance companies will become weaker. In much of Florida fresh drinking water will only occur if desalinization plants operate meaning water bills for home will sore enough to devalue existing homes and mansions. Population numbers will shift to higher areas causing all kinds of disruption and chaos. This issue is urgent beyond imagination and it is a huge enough problem that government will not be able to deal with it at all. Conservatives have effectively doomed this nation as we know it. With current sea levels it is unwise to be near any river or sea shore if a hurricane comes along. The chaos will be strongly amplified and God help us if a storm comes ashore at high tide. It will be tragic.
  • Clever of the seas to rise only on one coast!
  • Assuming ocean levels really are rising, maybe you should consider moving to higher ground. Adapt or die. It ain't rocket science.

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