Sea level rise is eroding home value, and owners might not even know it – “Each time that I was just finishing up paying off the bills, another flood would hit”
By John Tibbetts and Chris Mooney
20 August 2018
CHARLESTON, S.C. (The Washington Post) – Elizabeth Boineau’s 1939 Colonial sits a block and a half from the Ashley River in a sought-after neighborhood of ancient live oaks, charming gardens and historic homes. A year ago, she thought she could sell it for nearly $1 million. But after dropping the price 11 times, Boineau has decided to tear it down. In March, the city’s Board of Architectural Review approved the demolition — a decision not taken lightly in Charleston’s historic district.“Each time that I was just finishing up paying off the bills, another flood would hit,” Boineau said.Boineau is one of many homeowners on the front lines of society’s confrontation with climate change, living in houses where rising sea levels have worsened flooding not just in extreme events like hurricanes, but also heavy rains and even high tides. Now, three studies have found evidence that the threat of higher seas is also undermining coastal property values as home buyers — particularly investors — begin the retreat to higher ground.On a broad scale, the effect is subtle, the studies show. The sea has risen about eight inches since 1900, and the pace is accelerating, with three inches accumulating since 1993, according to a comprehensive federal climate report released last year. Scientists predict the oceans will rise an additional three to seven inches by 2030, and as much as 4.3 feet by 2100.Meanwhile, mapping has become increasingly precise, providing near-exact elevations that let researchers predict when individual properties could be underwater.By comparing properties that are virtually the same but for their exposure to the seas, researchers at the University of Colorado at Boulder and Pennsylvania State University found that vulnerable homes sold for 6.6 percent less than unexposed homes. The most vulnerable properties — those that stand to be flooded after seas rise by just one foot — were selling at a 14.7 percent discount, according to the study, which is set to be published in the Journal of Financial Economics.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.The most-studied market has been Miami-Dade County, parts of which have for years been experiencing regular sunny-day flooding. In a separate paper published in April, researchers at Harvard University found that properties at higher elevations were appreciating faster than properties at lower elevations, a phenomenon they dubbed “climate gentrification.”Last month, the nonprofit First Street Foundation released the first analysis to single out Charleston, a gracious port city founded in 1670. The analysis suggests that exposed homes in Charleston have lost $266 million in value since 2005 because of coastal flooding and expectations of still higher seas. (Using the same method, the First Street researchers found a $465 million loss in Miami-Dade County.) [more]
Sea level rise is eroding home value, and owners might not even know it
