Rising sea levels could impact Florida real estate

Sea levels in the Atlantic Ocean are on the rise, which could greatly impact Florida real estate.

There's been a recent resurgence to Florida's commercial real estate market, but a new threat to the sector's health is starting to make waves.

Rising sea levels in the Atlantic Ocean are starting to stir anxiety from real estate, insurance and financial professionals.

The Southeast Florida Regional Climate Change Compact, which is a collaboration between four South Florida county governments, anticipates South Florida could lose as much as $4 billion in taxable real estate if sea levels were to rise by one foot, according to the Miami Herald.

That figure could reach a whopping $31 billion in losses if the sea level were to increase by three feet, the group said.

Fort Lauderdale developer Dev Motwani told the Sun Sentinel about his long-term worries regarding the rising sea level. Motwani said local governments must continue to deliver sand to deteriorating beaches in order to keep the sea level from reaching real estate properties.

"We have a lot of waterfront real estate both on the beach and in downtown Fort Lauderdale, so the long term implications are huge," Motwani said. "What are the best neighborhoods and best real estate today could well become the worst real estate in 50 years."

According to Motwani, the first way rising sea levels would negatively influence property values would be by increasing insurance premiums. The developer added that flood insurance rates on some South Florida projects have already started to soar.

Sea levels and the Florida economy
Margaret Davidson, acting director of the Office of Ocean and Coastal Resource Management for the National Oceanic and Atmospheric Administration, told the Sun Sentinel that rising sea levels won't impact the area's economy in the imminent future. Rather, it might take a while to see the true effect of the increasing sea level.

"You're a real estate and a tourism economy," Davidson said. "I think when it begins to impact your tourists and when it begins to affect your quality of life, then it will affect real estate values."

A new mandate from Congress asks that future federal flood maps account for rising sea levels, which might limit some of the riskier waterfront property initiatives.

"If people had risk-adequate pricing as part of their decision-making process, people might not do some of the things they do," Carl Hedde, a senior vice president at reinsurance company Munich Re America, told the Sun Sentinel. "Until we start doing this, we're going to see irresponsible behavior."

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