Sea Level Rise Could Cause $1 Trillion in U.S. Real Estate Losses

Climate change, real estate, smart cities, Florida, sea level rise, Leon Kaye, insurance companies
Cities like Miami will need more than breakwaters if sea-level rise projections hold true.

We do not hear much about climate change from the real estate industry, but this month Zillow spoke out about the risk to coastal properties nationwide. The online property database company issued a report this week that suggested sea-level rise could cause almost $1 trillion in property losses by the end of this century.

Zillow’s estimates are based on a March 2016 article in the journal Nature. In the peer-reviewed article, authors Robert DeConto and David Pollard challenged previous assumptions about climate change risks and their impacts on sea levels worldwide. DeConto and Pollard posit that the melting of Antarctica’s ice sheet will contribute even more to sea-level rise than previously estimated. The hydrofracturing of the continent’s ice shelves, along with the structural collapse of ice cliffs at its shore’s edge, is hastening sea-level rise — and unabated emissions are not helping.

In layperson’s terms, Antarctica’s ice shelves are breaking down faster than previously thought, and this process will accelerate if the world’s countries cannot agree on a plan to stall climate change. The result could be an additional 1 meter (3.3 feet) of additional sea-level rise from Antarctica alone by 2100. DeConto and Pollard’s study concludes that the world’s oceans could rise at a rate double that of what most scientists concluded in recent years.

If these trends hold true, coastal states will suffer massive infrastructure and financial losses. According to Zillow’s Krishna Rao, 36 coastal cities would be wiped off the map, and another 300 cities would lose their homes. The result is what Zillow estimates as a total value of $882 billion in homes at risk.

And that figure should be even higher considering the heated real estate market in much of the coastal U.S. The continued shift to the sunbelt and desire to be on the coast are trends that will not subside any time soon.

States with the reputation for year-round sun will suffer the most. Almost half of the total value of losses could occur in Florida, with over $400 billion in current housing value gone, according to Zillow’s projections. Florida could lose 1 in 8 homes; in Hawaii, 1 in 10 homes could be at risk. Rao suggests that, in total, almost 1.9 million homes could be lost — and almost half of those are in Florida alone.

And any cities should become laboratories for smart cities’ technology and design, then Miami and Honolulu are the prime places to start. Cities that are booming due to their economic might — such as Seattle, Boston, San Diego and, of course, New York — are highly vulnerable. Cities that attract retirees, including Jacksonville and Virginia Beach, also face huge long-term risks.

When companies such as Zillow start a discussion about climate change risks, that should be a signal for insurance companies to evaluate how they are going to underwrite policies for commercial and residential real estate in the long run.

So far, however, most insurers have been silent or oblivious to this challenge. The business sustainability advocacy group Ceres has long implored insurers to become more proactive on how climate change risks factor into their businesses. Municipal governments also need to think about the impact on their annual and long-term budgets. Rising sea levels also could affect public health.

In sum, business needs to work with policymakers to plan for this scenario now. Infrastructure built today, along with approaches such as a carbon tax that can reduce emissions, will make cities more livable now while preventing anything close to the doomsday landscape that Zillow predicts for the future.

Image credit: Gary Bembridge/Flickr

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Based in Fresno, California, Leon Kaye has written for TriplePundit since 2010. He has lived across the U.S., as well as in South Korea, Abu Dhabi and Uruguay. Some of Leon's work can also be found in The Guardian, Sustainable Brands and CleanTechnica. You can follow him on Twitter (@LeonKaye) and Instagram (GreenGoPost).

One response

  1. South Florida is experiencing higher peak tides flooding streets. Some Key Largo residents have water that does not recede from the streets creating a haven for mosquitoes. You cannot build a flood wall as our soil is so porous saltwater seeps through. Could also in time contaminate our drinking water aquifer. Rick Scott along with Marco Rubio do not even acknowledge this problem. They also continue to let the Sugar Industry dominate with their continuing pollution of what was once our beautiful waters. Re-elect Rubio and you will be in agreement with their non-action and continued construction of our state. We voted to buy the land that would naturally filter the filth from the Sugar Industry. The Sugar Industry did not agree and the Florida Government working in concert with the Sugar Industry did not buy the land. Re-elect Rubio and you are just endorsing the Sugar Industries continued destruction of Florida. Eliminate the sugar subsidies and get Sugar out of Florida. They so not respect our citizens, tourist industry and was once our beautiful waters.

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