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Trillion $ Coastal Property Bubble Ready To Burst

Trillion $ Coastal Property Bubble Ready To Burst

Unread postby dohboi » Wed 25 Apr 2018, 14:43:54


The trillion-dollar coastal property bubble is ready to burst, per new study


Rising seas hit U.S. coastal property values: "A pricing signal from climate change."


A second, broader study, “Disaster on the Horizon: The Price Effect of Sea Level Rise,” found that “Homes exposed to sea level” are being priced 7 percent lower than homes that are the same distance from the beach, but that are less exposed to flooding.

The study, which used Zillow data from around the country, concluded that the pricing gap between riskier homes and safer homes was being driven by the “more sophisticated investors.” For that group, the gap is about “11 percent and has increased over time, coinciding with the release of new scientific evidence on the extent and timing of ocean encroachment.”

The trillion-dollar coastal property bubble is ready to burst

The economic risks from rising seas are enormous — but the Trump administration’s policies all but guarantee a worst-case scenario plays out.

A 2014 Reuters analysis of this “slow-motion disaster” calculated there’s almost $1.25 trillion in coastal property whose value is being propped up by the National Flood Insurance Program’s below-market rates.

“The risk will rise as sea levels rise, and when that happens, you’d expect your property value to fall,” as Lloyd Dixon, the director of the RAND Center for Catastrophic Risk Management and Compensation, explained in October. “At some point, the property becomes worthless.” ...


https://thinkprogress.org/rising-seas-h ... bf4e7443b/

(And before all the Trumpistas jump in with rage, let me say that, yes, the problem existed long before Trump, but he has not made things better yet on his watch, and there is good argument that he is making it much worse. )

Was it Ibon who had coastal property in Florida. Whoever it was, have you unloaded it yet? I'd be interested in what intelligent people in these difficult situations see as their options and priorities at this point.
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Re: Trillion $ Coastal Property Bubble Ready To Burst

Unread postby dohboi » Wed 25 Apr 2018, 14:46:33

related, and an interesting question:

The Fighting Has Begun Over Who Owns Land Drowned by Climate Change


America’s coastal cities are preparing for legal battles over real estate that slips into the ocean.

https://www.bloomberg.com/news/features ... ate-change

A long read but really interesting. Another feast for the lawyers

(Thanks to ger and sig at asif for the above)
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Re: Trillion $ Coastal Property Bubble Ready To Burst

Unread postby dohboi » Wed 25 Apr 2018, 14:50:15

Also related:

Flooding Hot Spots: Why Seas Are Rising Faster on the U.S. East Coast

...While sea level is rising globally at about a tenth of an inch per year, cities along the Eastern Seaboard of the United States — including Norfolk; Baltimore; Charleston, South Carolina; and Miami, among others — have suffered “sunny day” flooding from seas rising far faster than the global average.

One study published last year shows that from 2011 to 2015, sea level rose up to 5 inches — an inch per year — in some locales from North Carolina to Florida.

Given growing concerns over the flooding, scientists are now working to unravel the mystery of why some parts of the globe are experiencing so-called “sunny day” flooding that had not been expected for decades under conventional sea level rise projections.


https://e360.yale.edu/features/flooding ... east-coast
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Re: Trillion $ Coastal Property Bubble Ready To Burst

Unread postby KaiserJeep » Wed 25 Apr 2018, 16:20:43

At those rates, in a couple of centuries, I'll have beachfront property on Nantucket. But I think given historic SLR, about 500 years is more likely.

As for the water levels in the Great Lakes, those are being maintained within a few inches by the locks of the St Lawrence Seaway system. Those lakes are a very good place to own beachfront property.
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Re: Trillion $ Coastal Property Bubble Ready To Burst

Unread postby Tanada » Thu 26 Apr 2018, 08:39:05

KaiserJeep wrote:At those rates, in a couple of centuries, I'll have beachfront property on Nantucket. But I think given historic SLR, about 500 years is more likely.

As for the water levels in the Great Lakes, those are being maintained within a few inches by the locks of the St Lawrence Seaway system. Those lakes are a very good place to own beachfront property.


Actually it is the hydroelectric plants on the Niagara River that does the majority. The USA/Canada have an international treaty to maintain a set flow rate over the Niagara Falls for tourism reasons. We have had the technology since the 1950's to simply place a dam across the Niagara Canyon just down stream from the falls for close to a Century based on Hoover Dam that would let us capture all of the energy of the flowing Niagara river as hydroelectricity. In South America the Itaipu Dam on the Parana river between Paraguay and Brazil is an international river much like the Niagara river. Brazil and Paraguay made a deal to build the dam, flood roughly equal portions of each countries river valley, and split the electric output between the two nations. A dam with the same purpose on the Niagara could be built that would only flood the valley between the current waterfall and the first suitable location down stream about a mile total distance. The current hydro projects actually use diversion tunnels and canals to carry water from above the falls around to the hydro works in the canyon and those actually have the capacity that in winter time when the river is at low flow they could actually shut off the flow over the falls entirely by diverting the entire river. Hence the international treaty to maintain flow even in winter during daylight hours when Tourists are viewing the waterfall.
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Re: Trillion $ Coastal Property Bubble Ready To Burst

Unread postby Tanada » Thu 26 Apr 2018, 08:46:34

dohboi wrote:related, and an interesting question:

The Fighting Has Begun Over Who Owns Land Drowned by Climate Change


America’s coastal cities are preparing for legal battles over real estate that slips into the ocean.

https://www.bloomberg.com/news/features ... ate-change

A long read but really interesting. Another feast for the lawyers

(Thanks to ger and sig at asif for the above)


I am on the side of the current landowners for the simple reason that historically if you have a pond on your property the land under the pond is still your land and you still pay property taxes on that land. If you pay taxes on it then by golly you should have certain rights with respect to the property. On the other hand once those same folks stop paying the taxes the property reverts back to the government. Neat and simple.
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Re: Trillion $ Coastal Property Bubble Ready To Burst

Unread postby Newfie » Thu 26 Apr 2018, 10:46:14

Tanada,

You are discussing Raparian Rights.

As far as fresh or non-tidal waters go I believe they are managed I. A state by state basis.

As for tidal water I think that is managed federally.

What is interesting is water that was non- that dal that becomes tidal.

Not 100% sure of all the above. Just my understanding.
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Re: Trillion $ Coastal Property Bubble Ready To Burst

Unread postby Cog » Thu 26 Apr 2018, 10:57:05

A pond is not a navigable stream, river or ocean. With respect to ocean front property the government owns to the high tide line in most cases. Just as a homeowner would lose land with rising sea levels, they would gain land with dropping sea levels.

Riparian or water rights can become complicated quite quickly which makes me glad I did not have to deal with them much as a surveyor. There are firms that specialize in it.
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Re: Trillion $ Coastal Property Bubble Ready To Burst

Unread postby KaiserJeep » Thu 26 Apr 2018, 11:50:50

I can tell you that with changing high tide lines on Nantucket, the mean high tide line slowly moves in both directions. Some beaches are building out and away from existing property lines, others see the beach shrinking towards the existing property lines.

Ownership remains with the landowner, as the area shrinks. When the lower limit of 1/2 acre is surpassed, no further building permits can be issued to the property owners. If the structure gets undermined and falls into the sea, the real estate is a total loss. If the area increases, ownership remains with the existing owner, he is re-assessed for the increased land, and taxes go up. As the house itself gets further from the beach, it gets harder to sell, and some get moved closer to the surf, provided all the usual requirements for a building permit are met, including an environmental impact survey.

The extreme Western tip of Nantucket Island was torn off by Hurricane Esther in 1961, making 3 homes on the former Smith's Point worth about 6X the amount they were worth on the shore of the larger island. But by the same token, no more building permits could be issued, due to Federal wetlands regulations. Had any of the three septic systems on the "Esther's Island" been breached by the sea, the house would have been condemned and red-tagged for demolition at the expense of the landowner. This happens from time to time. In fact in the 1800's the small Island of Tuckernuck, about 250 acres, was accessible at low tide by wagon from Nantucket. The real estate on Tuckernuck is much more valuable now as that island is fully detached at low tide, and continues to be occupied.

Both Esther's Island and Tuckernuck were declared Bird Sanctuaries due to nesting areas for some endangered shore birds on the dunes. This status prevents new building permits from being issued, if storm damage occurs, the structures are tagged and must be demolished by the owners. For existing homeowners, electrical permits were issued for solar PV and wind turbine power systems over the last couple of decades, these homes are "off-grid". Some Tuckernuck residences have gasoline generators with no new ones being allowed, but replacements of the same or lesser rated capacity are OK.

https://capecodlife.com/the-changing-shape-of-esthers-island-tuckernuck-and-nantuckets-western-shore/
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Re: Trillion $ Coastal Property Bubble Ready To Burst

Unread postby yellowcanoe » Thu 26 Apr 2018, 12:37:56

KaiserJeep wrote:
As for the water levels in the Great Lakes, those are being maintained within a few inches by the locks of the St Lawrence Seaway system. Those lakes are a very good place to own beachfront property.


There are actually no man made facilities to control water levels on Lake Michigan, Lake Huron and Lake Erie. Even though there is a sizable amount of water taken from the Niagara river above Niagara Falls for hydroelectric generation, the water is diverted after it has already flowed someways down the Niagara River and therefore doesn't impact how much is flowing out of Lake Erie. Water levels on these lakes are entirely a function of average rainfall across the watershed. Over the last couple of decades we've experienced both extremes of unusually high or low water levels. I've paddled Georgian Bay when water levels were over a meter below norm and we had to stay far from shore because there were so many rock reefs exposed. More recently, high water levels have been a problem especially for cottagers on low lying land on Lake Erie. Last summer it was Lake Ontario that was suffering from high water levels and when we visited Sand Banks provincial park we found that the boardwalk trail through the sand dunes was covered with almost two feet of water in some sections!
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Re: Trillion $ Coastal Property Bubble Ready To Burst

Unread postby KaiserJeep » Thu 26 Apr 2018, 14:08:15

I understand your statement, and the diagram below shows what we are discussing.
Image
There are enough man-made locks, dams, hydropower ducts, and channels to effectively control lake levels in some areas, necessary to keep the locks functional and the freight boats moving. Beyond that, the system is subject to seaonal variations, weather effects, and rainfalls. But if lake levels threaten to change enough to halt freight transport, through drought, excessive rainfall, or system mechasnical issues, steps are taken which alter lake levels. In particular, the buypass channels of the Seaway have variable height dam spillways which are altered to maintain the water elevations needed for the locks:
Image
In any case, my main point was that SLR (Sea Level Rise) will not excessively impact the Great Lakes. The approximately 100 meter increase which will occur at the Climatic Optimum will flood the lower St. Lawrence river and eventually MAY alter Lake Ontario in the later stages of SLR, but everything higher than Niagra Falls is relatively stable.
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