South Florida could see two feet or more of sea-level rise over the next 40 years. It’s alarming.
And there’s growing concern that the risk of rising seas could sink South Florida’s economy before the water even gets here.
The walls of Tadd Schwartz's home in south Coconut Grove are so thick that in some places, he can't get a wifi signal. His windows have glass that's impact-resistant to 150 miles per hour, and he's got a new roof hardened against storms.
But Schwartz still worries about what a hurricane could do to the house where he lives with his wife, Jen, and their two children, Siena, 6, and Sevi, 3. It's not just the property damage; it's also the uncertainty that comes with living in an area that's prone to storm surge from hurricanes and increasingly vulnerable to sea-level rise.
"When we saw Irma coming at us at 175 mph, that’s when I said, 'Hey, I’ve got two kids. I’m as protected as I can get, but I’m in a low-lying area. I’m getting the hell out of here,'" Schwartz said. "What’s going to happen? We’re going to have to start dealing with this year in and year out."
He's not quite ready to sell the house, in part because property values in his neighborhood are still rising. But Schwartz says he no longer thinks of his home as a place he’d pass down to his children or where he'll retire.
"What’s going to happen -- I mean, nobody knows,” he said.
Scientists say South Florida could face two feet of sea-level rise by 2060, and six feet or more by 2100. Rising seas mean more flooding during high tides and a greater threat from storm surge. The increasing flood threat means more risk for property owners, investors and insurers. In real estate and insurance circles, it's a growing public image problem that comes from being internationally known as “ground zero for sea-level rise.”
But it has real financial implications. Local leaders are worried that insurers and investors' perception of risk spells trouble for South Florida’s economy, driven as it is by real estate.
“You mostly hear today about the water -- the water in the streets, when is it coming, how long do we have,” said Wayne Pathman, chair of Miami’s sea-level rise committee, at a recent committee meeting. “But what’s already happening is risk and the economics are already changing.”
The concern is not just over how costs will rise for many homeowners (including people who are required to have flood insurance because of where they live). It's about how costs will rise for investors -- people from Latin America and Europe who buy condos in high-rises from Miami Beach to Sunny Isles to Fort Lauderdale and beyond -- and the credit ratings agencies and insurers who influence investors' decisions.
Particular attention is on an upcoming change to the National Flood Insurance Program, the federal program that subsidizes flood insurance for millions of homeowners -- the largest percentage of which are in Florida.
Currently, federal flood insurance costs don’t account for sea-level rise. That’s expected to change in less than two years, when the federal flood insurers update the way they assess property risk.
In an email, a FEMA spokesman confirmed a redesign of the National Flood Insurance Program will be released in 2020, intended “to better reflect the resilience and vulnerability of homes and other structures covered under the NFIP, addressing the range of possible flooding different communities face, such as variations from coastal risk, to riverine risk, to heavy precipitation and others.”
“Some people’s prices will go up; some people’s prices will go down,” said Roy Wright, who led the National Flood Insurance Program until leaving earlier this year for a non-partisan research organization, the Insurance Institute for Business and Home Safety. “What will be true is that the price will better reflect the risk of the structure.”
Because South Florida is so vulnerable to sea-level rise, the fear is that flood insurance costs are almost universally going to go up. That’s why Pathman and other leaders see the change to the NFIP as a “game changer” for the region.
But they point out that the agencies that guide investors, insurers and banks do take into account efforts communities make to reduce the risk from sea-level rise.
After all, the change to flood insurance costs has to do with risk: sea-level rise means higher flood risk and higher insurance rates.
If South Florida can reduce its risk, it can potentially prevent a significant increase in insurance prices and avoid a perception among investors that it's a risky place to buy property -- a perception reinforced by Hurricane Irma last September, where water from storm surge turned roads to rivers in areas including Miami's financial district.
— Joey Flechas (@joeflech) September 10, 2017
“We’re going to need to be able to respond with projects,” Jennifer Jurado, Broward County’s chief resilience officer, said at a recent roundtable meeting with officials and staff from Broward’s cities. She was among several leaders at the event who said adaptation efforts are critical to the future of South Florida’s economy.
Federal flood insurers have a program that offers insurance discounts of 5 to 45 percent for measures like floodplain mapping, stricter building regulations, improvements to stormwater management, and community education. Credit ratings agencies have said communities that don’t take steps for adaptation will suffer credit downgrades.
Pathman, from Miami’s sea-level rise committee, says there’s a precedent for adaptation reducing perceived risk and insurance costs.
“If you think back to 1992, we had Hurricane Andrew and it devastated a portion of our community, and insurance rates were going to skyrocket,” he said. “But the then-South Florida building code was changed and insurance rates did not skyrocket like in other parts of the country.
"We need to think like that going forward with sea-level rise and flooding."
This story was produced as part of the The Invading Sea, an editorial collaboration among The Miami Herald, The Sun-Sentinel and The Palm Beach Post, with reporting from WLRN, on the growing threat of sea level rise to South Florida.
You can find more coverage at theinvadingsea.com.