Climate Change, Sea-Level Rise and the Future of Real Estate 

26.07.22 09:29 AM Comment(s) By Assetsoft

According to data published by the US government, the sea levels on the coasts of the USA have been rising quite rapidly in the last few years. Since 1993 the average sea-level rise was over 0.12 - 0.14 inches per year, which is way higher than expected trends. On the Gulf Coast, the rise was quite alarming; it was more than 8 inches between 1960 - 2020. What does it mean for the the coastal communities? Their land is being constantly eroded from under their feet, including their houses. 

 

Business Insider reports on global predictions say that 7 major American cities could disappear under the sea by 2100. Cities like Louisiana in New Orleans are already sinking, and the real estate is present there. Miami in Florida and Houston in Texas see a much more rapid sea-level rise than any other city. By affecting residents, their livelihoods, and as a long-term effect, these sea-level rises are taking a significant hit on the real estate industry.  

 

What does this mean for your real estate business? Read this article to find out more about it and how you can strategize better to navigate the situation.  

How does sea-level rise bother real estate? 

The rising sea levels are the biggest threat to the real estate market around sea coasts. Forecasts by Climate Change say that sea levels could rise as much as 45 inches by 2100. Many major cities are sinking, and it is a major cause of concern for homeowners and real estate investors alike. Government data says that more than 30% of the US population lives in densely populated coastal cities, and there will be a major loss of real estate when these lands sink under the sea.  


  • The problem for real estate owners 

 

Due to the steep rise in sea levels, property values in coastal areas are going down by the day. There are no takers for coastal homes, and the existing residents of coastal areas also have to plan their move to higher plane lands for future safety. Other than immediate action by governmental bodies to change policies about the climate and decarbonization of industries, there is hardly any other way to handle this situation.  


  • Real estate investors pulling out 

 

Real estate investors are pulling out rapidly from coastal area properties. Why? These investments are rapidly becoming money drainers due to the encroaching effects of the sea. If you are a real estate property manager around coastal areas, you need to start planning a way to get out of these investments as soon as possible. You can rethink your strategy and leadership and invest in more stable locations that are further away from the coastal line to make your business more sustainable in the long run.  

The General Risk for Real Estate Due to Rising Sea Levels 

Many low-lying properties and sea-facing real estate are already grilling under the pressure of rising tides. NRDC survey reports say that by 2100, the state of Florida alone will lose more than $66 million due to the rising sea levels if climate control measures are not put in place soon. The East Coast and Gulf Coasts are at higher risk because they have seen the most rapid change so far but other coasts are not far behind. 


But surprisingly, many Americans are still ignoring all the warning signs by the government and flocking to the coastal areas to buy beach houses. UCLA Anderson Review findings have said that the USA stands to lose $1 trillion in properties and other coastal amenities due to this massive influx of luxury beach homes and related investments.  

How coastal real estate owners are mitigating 

Homeowners and real estate property managers around the coastlines are quickly adapting their methods to fit this impending problem into their daily lives and businesses. How so?  

 

  • Property managers and constructors are using flood and water-resistant non-porous flooring material to construct the new homes or revamp the old ones. 

  • Getting the properties covered under flood insurance under all circumstances. 

  • Raising the general foundation of the new buildings and elevating the other essentials like the HVAC system to a higher level to avoid flooding and damage. 

  • Talking to the local authorities to construct stable sea walls around homes right beside the shore to stop floodwater from entering homes and causing permanent damage. 

  • Restoring and conversing with the local coral reefs can be one of the best ways to stop rising water levels from entering human homes. The last option is a little far-fetched, but local governmental bodies and real estate owners can come together to conserve and restore the natural habitat around the coastal areas. But this has to be collaborative work involving multiple stakeholders and is a long-term plan for a better future.  

What does the future hold for the real estate industry in coastal communities? 

The coastal communities need to be prepared for the grim times that lie ahead. Governmental bodies need to take strict actions to curtail real estate development around these affected areas. Though there are multiple methods to stop floodwater from entering people's homes, they are not full proof or can not be long-term solutions. The overall carbon footprint of these coastal areas needs to be reduced to make some real impact.  

How does it affect your real estate business? 

Are you a real estate business owner or property manager in these affected coastal areas? Does the rising sea levels have you worried for the future of your business? Well, it is a cause for concern; you can also team up with local residents and governmental bodies to mitigate the situation as far as possible. But you have to rethink your future plans. As a first step, starts by investing in properties in other non-coastal areas, to begin with and secure your future. 

 

Does this information have you worried sick for your business? Well, unplanned strategy and leadership added to that mix can negatively impact your business in more ways than one. At Assetsoft, we can provide you with the right advisory services to plan the strategy and leadership of your real estate business project management to help you steer this situation in your favor.  

 

Talk to us today to know more about our services.  

Assetsoft

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