2017 will be remembered as the year the water came.
Hurricane Harvey dropped as much as 60 inches of rain on parts of Houston, shattering American meteorological records. Hurricane Irma was the strongest tropical storm ever recorded outside the Gulf of Mexico and the Caribbean Sea, and plowed through Florida in early September, turning Miami’s main drag into a raging river.
And Category 4 Hurricane Maria pulverized Puerto Rico with 150-mph winds, leaving the island in darkness and ruin. Altogether, the three storms will costthe U.S. more than $200 billion, which would make 2017 the most expensive hurricane season on record.
Yet there is every reason to expect that the towns and the cities hit by the hurricanes of 2017 will be rebuilt — even, eventually, devastated Puerto Rico. Thank the federal government — when a storm or flood strikes a community, Washington is there with generous disaster relief, either through billions of dollars in direct aid or through the cushion of federally-subsidized flood insurance plans.
The confidence in the federal government’s backing keeps lenders sending money to disaster-hit communities, which encourages residents to stay put and rebuild, rather than flee for safer areas. This in turn ensures that tax money keeps flowing to local governments.
That’s why New Orleans, more than 10 years after suffering through one of the worst hurricanes on record, now has a tax base twice as large as it did before Katrina, and why the South Florida city of Homestead is nearly three times as populous as it was before Hurricane Andrew flattened it in 1992.
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But disaster aid and insurance are meant to respond to occasional catastrophes. What will happen as the seas rise and major flooding goes from the occasional to the near constant? What will happen when climate change remakes the coastal communities where 39 percent of Americans now live? What happens when the water comes to stay?
New York City housing risks due to sea-level rise in a 2017 Zillow report. Credit: Zillow
Rising seas, looming crisis
A growing number of experts fear that sea level rise and flooding will devastate coastal real estate values, which in turn could cause the U.S. housing market to suffer a crash worse than 2007-2008 financial crisis.
As seas continue to rise — with levels projected to increase by as much as six feet by the end of the century — flooding will become more common and more devastating. (A recent Zillow report found a six-foot rise in sea level by 2100 would likely submerge 1.9 million homes.)
Eventually insurers could begin to pull out of coastal markets altogether, as could lenders who fear that homes won’t be able to retain their value through the lifespan of a 30-year mortgage. Unable to get insurance to repair their repeatedly flooded properties — and tired of navigating the now constant risk of water–homeowners might end up desperate to sell, only to find that no one wants to buy.
The result would be a wave of defaults — while homeowners tried to keep paying their mortgages when their homes were financially underwater during the crisis, they’re more likely to give up if their home is actually underwater. They would know that there would be no hope their flooded homes would ever regain value.
“All of a sudden we’re going to reach a tipping point and no one will touch these mortgages,” says Edward Golding, a fellow at the Urban Institute and the former head of the Federal Housing Administration. “At some point it becomes undesirable risk and people start pulling out from entire regions.”
When that happens, coastal communities will enter a death spiral, as property taxes vanish even as the cost associated with responding to ever more frequent floods rises. “You don’t need to be too smart to figure out how this affects your tax base,” says Philip Stoddard, the mayor of South Miami. “No one is going to buy or invest in the community after that. This is not going to be pretty.”
We can’t say we haven’t been warned. According to Zillow’s recent report on sea level rise, in Miami alone, 30 percent of the city’s homes could be underwater — sinking over $16 billion property value.
Check out the full article on InMan News