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Sunday, June 7th, 2015

How Your Taxes Help Inflate The Value Of Coastal Properties Threatened By Climate Change

Author:     Joe Romm
Source:     Climate Progress
Publication Date:    
Link: How Your Taxes Help Inflate The Value Of Coastal Properties Threatened By Climate Change
Stephan:   Here is another confirmation of a prediction about coastal real estate I first made in SR in 1991, and have reiterated numerous times since. We are rapidly approaching a collapse of the high value coastal real estate market, and it is going to produce devastating consequences. Note that the states with the highest value of real estate at risk are all Red value states that deny climate change is real or caused by humans.

Coastal Insurance-638x846Taxpayers are propping up wildly-inflated coastal property values. At some point, we’ll stop doing that, and coastal property values will crash.

Unless they have already crashed because Miami gets hit by its equivalent of Superstorm Sandy. Or because the smart money pulls out of coastal real estate ahead of time after realizing that our climate inaction has made the crash inevitable — due to a combination of faster-than-expected sea level rise and ever-worsening storm surges.

The main prop is the National Flood Insurance Program, which covers $484 billion in Florida property alone, “often at below market rates,” as Reuters has explained. Florida state officials denying the reality of climate change does not help either.

But a recent study, “Climate Adaptation and Policy-Induced Inflation of Coastal Property Value,” points out that taxpayer-subsidized beach sand replenishment programs are also inflating the bubble. The researchers found “that a sudden removal of federal nourishment subsidies, as has been proposed, could trigger a dramatic downward adjustment in coastal real estate, analogous to the bursting of a bubble.”

How big a crash would the subsidy removal […]

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