Rising sea levels could cost homeowners $882 billion.
The journal “Nature reported that sea levels could rise more than 6 feet by the end of the century.
If this happened, Florida could lose 1 million homes. This would be 13 percent of the state’s housing stock. In addition the value of this loss would be $400 billion. The figure does not include commercial building. Neither does it account for public infrastructure or future appreciation in home values.
Government could build barriers to protect coastal communities from rising sea levels. However, there is no doubt that there will be major losses when waters move in.
Even a 2 foot increase in sea level would ultimately see a loss of $74 billion in home value. Especially relevant, Florida would lead the way with $17 billion losses in home value.
In a catastrophic 6 foot rise situation, New York City would lose about 32,000 homes at $27 billion in value. Newport Beach California could also lose homes values at $10 billion.
A small community lies in close proximity to the Puget Sound. The homeowners with mortgages have to carry flood insurance. Furthermore, the cost of that insurance is exorbitant.
Homeowners have been warned that flood insurance premiums are going to go up dramatically over the next few years.
Flood maps that FEMA use to determine flood risk and help insurance companies to calculate rates, have changed in Tacoma’s coastal area. Base flood elevation levels are however rising several feet. Approximately 280 homes are affected by the map changes.
Existing homes don’t have to be raised. However, any remodelling or additions must be rebuilt at the new height. This can be several feet higher.
FEMA said the agency is already phasing out flood insurance subsidies for homes. Homes in Titlow Beach and Salmon Beach need to get an elevation certificate. This costs $1000. Unless produced, flood insurance rates will thus increase by 25% per year.
When a potential buyer eventually finds out that they must have flood insurance it may have a further negative impact on home values.
Lenders may not want to offer mortgages where homes are below the base flood elevation. Most noteworthy, even with flood insurance, homeowners have been told that the policy would not unfortunately cover tidal overflow or flooding caused by high tides.