Miami-Dade County property values are up — again — this year, but new research shows that growth could have been even larger if thousands of homes weren’t at risk of regular flooding from sea level rise.
The study, from the nonprofit First Street Foundation, shows the county racked up $465 million in lost real-estate market value between 2005 and 2016. That data is now available on Flood iQ, a searchable website where property owners can find a data-driven estimate of how much their land (or their city) has already been affected by rising seas.
Here is one high-end example: A five-bedroom, five-and-a-half bathroom waterfront home on Bay Lane in Key Biscayne has seen a slow but steady growth in assessed value the last couple years. This year, the 28,000-plus square foot house has a market value of more than $24 million.
According to this new research, if this beachfront property wasn’t exposed to the last decade of sea rise-related flooding, it would be worth an extra $163,954. If that pattern continues, it could miss out on gaining another $189,178 of value by 2033.
A more typical impact: a two bedroom home in Bell Meade worth $470,000 this year lost out on more than $170,000 of growth, per this analysis. That lost potential worth may be a fraction of the home’s overall market value, but the new data hint at an answer to a common question from climate change skeptics and South Florida real estate watchers alike: if the risk of sea level rise is so real, why hasn’t it been reflected in the cost of coastal homes? It has been, the researchers say, but homeowners happy with rising prices haven’t noticed.
Steven McAlpine and Jeremy Porter believe their study backs up previous research showing this effect is already happening in Miami-Dade, and when they scaled out their research to five states struggling with sea level rise, they found it in all of them. “It’s there if you look for it,” said Porter, a professor at Columbia University.
Their research also included the impact of flooded roads, which isn’t usually factored into this kind of research. They found it accounted for three quarters of the lost property value in Miami-Dade, and two-thirds of the lost value for all five states combined.
“Road flooding is a bigger driver of home value loss than lot flooding,” said McAlpine, head of data science for First Street.
Florida far and away topped the charts of the five-state study. The hidden impact in the Sunshine State’s tallied up to $5.42 billion over the last decade, with South Carolina a far second with $1.11 billion.
Miami Beach (of course) was No. 1 on the list of cities where lost property value has been the steepest, with more than $337 million in potential worth washed away in the last decade and another $337 million more at risk by 2033.
The estimates were calculated from a computer model fed with NOAA sea level rise models and tidal gauge data from the U.S. Geological Survey.
McAlpine and Porter hope residents will use their research and the Flood iQ tool to make better decisions about where to buy property. When the duo were wading around floodwaters in the area to test their models they ran into homeowners who said they wished they’d known more about how flood-prone their properties were before they bought them.
“The fact is, people are losing property value,” said Matthew Eby, executive director of First Street. “It’s less of a conversation of whether it’s happening or not, because it is. The conversation is about quantifying that and coming up with solutions.”
This kind of research isn’t just important to South Florida homeowners. It can serve as something of a canary in the coal mine for national investors who are watching for when markets start taking sea rise risk seriously, said Emilie Mazzacurati, CEO of climate market analysis firm Four Twenty Seven.
“In some ways Florida and the Miami real estate market are the floodgates of the rest of the country. It’s a region that’s so obviously overexposed,” Mazzacurati said. “Anywhere outside of Florida people are looking at Florida.”
Source: Miami Herald