Climate change and rising sea levels devalue some homes

Climate change and rising sea levels devalue some homes

This summer, it rained continuously in mid-July in Miami Beach in Kurt Dyer, Florida. He opened the garage door and pointed to the flooding that was already building up in his driveway. He said it wouldn’t be long before the whole garage was flooded.

Kurt Dyer and Bruce Bender

CNBC

Although he faces harmful flooding on a daily basis, the 30-year-old Miami Beach resident said he has no plans to move. “Here is the living paradise. “

Dyer estimates that he is spending around $ 250,000 on renovation costs to make his house more resistant to flooding. While this figure does include some improvements to the kitchen cabinetry, the main structural change will be to raise the aisle 3 feet and tilt it so that water will flow out onto the street. It also raises its guest bedroom and bathroom by 4 feet.

Jesse Keenan, associate professor of real estate at Tulane University, says these types of resilience enhancements, which are mostly available to the wealthy, create a game of musical chairs with home equity.

As long as homeowners like Dyer are able to sell their property for a higher price after flexible investment, they win. Eventually, however, if a flood or other disaster destroys the home and makes it uninhabitable, a homeowner or bank can lose everything they own. Over time, this risk will increase insurance rates and make it more difficult to obtain a mortgage.

“We anticipate a rapid decline in valuations,” Keenan told CNBC. “Only the rich can afford to live in high risk coastal areas because not everyone can insure it and will not be able to get a mortgage.”

Kurt Dyer and Bruce Bender’s home

CNBC

In fact, homes exposed to sea level rise sell for about 7% less than their unexposed counterparts, a. According to The study published in 2019 in the Journal of Financial Economics. This exemption increases to 10% when the owner does not live there.

According to FEMA, flooding is the most common and costly natural disaster in the United States. Ninety-nine percent of all natural disasters in the United States involve flooding, and just 1 inch of water can cause $ 25,000 in damage to a home.

A 2018 Insurance Information Institute survey found that only 15% of U.S. homeowners have flood insurance. Keenan fears that all of this could lead to a situation where only the rich can protect themselves from the vagaries of the weather.

Dyer said filing her flood claims is relatively straightforward, but she and her husband are paying out of pocket for these major repairs. But finishing his dream home is worth it, and he expects Miami Beach to remain livable for at least 20 years.

Kurt Dyer and Bruce Bender walking the dog

CNBC

“If I didn’t have the resources and the ability to make repairs, I probably wouldn’t want to be in this environment like this. It would be unacceptable. But I have the resources. I have the ability to make improvements. So I will do it, ”he said.

Watch the documentary to learn more about Dyer’s story and how money affects climate adaptation.

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