Property Values Don't Reflect Risk of Frequent Coastal Flooding

During the next three decades, the consequences of rising seas will strain many coastal real-estate markets, with potential reverberations throughout the national economy. (Union of Concerned Scientists)

During the next three decades, the consequences of rising seas will strain many coastal real-estate markets, with potential reverberations throughout the national economy. (Union of Concerned Scientists)

Massachusetts coastline particularly vulnerable to rising waters

By FRANK CARINI/ecoRI News staff

Along the nearly 13,000 miles of coastline of the contiguous United States, hundreds of thousands of buildings lie in the path of rising waters. Long before these properties and accompanying infrastructure are underwater, though, millions living in coastal communities will face more frequent flooding, as the tides inch higher and reach further inland.

Property values in most coastal real-estate markets, including in southern New England, however, don’t reflect this risk. These properties are routinely more expensive, even though their future is likely to be wet.

Accelerating sea-level rise, primarily driven by human activity, is projected to worsen tidal flooding in the United States, putting as many as 311,000 coastal homes in the lower 48 states, with a collective market value of nearly $118 billion, at risk of chronic flooding within the length of a typical mortgage, according to the Union of Concerned Scientists (UCS). Those 300,000-plus homes generate some $1.5 billion annually in property-tax revenue.

Another 14,000 or so coastal commercial properties assessed at a value of nearly $18.5 billion also are at risk during the next 30 years.

Although the Industrial Revolution began more than two and a half centuries ago, some 60 percent of industrial carbon dioxide emissions have been released since 1980, according to the Cambridge, Mass.-based nonprofit. Emissions from the extraction, manufacturing, and burning of products produced by 90 corporate cement manufacturers and fossil-fuel goliaths, such as Chevron, ExxonMobil, and Shell, contributed to nearly half of the global rise in surface temperature and about 30 percent of the rise in global sea level between 1880 and 2010.

By the end of this century, thanks in large part to decades of unrelenting climate emissions, 2.4 million homes and 107,000 commercial properties currently worth more than a combined $1 trillion could be underwater, according to UCS projections.

Many of the at-risk waterfront communities in Connecticut, Massachusetts, and Rhode Island, most notably underserved and marginalized communities — the South Providence and Washington Park neighborhoods in Providence, for example — are underprepared to deal with the many challenges climate change presents.

Currently, according to a 2018 UCS report, 940 properties in Connecticut, 2,405 in Massachusetts, and 278 in Rhode Island are at risk. By 2030, under the organization’s high scenario, those numbers jump to 2,540, 3,303, and 419. The high scenario is where climate change is trending.

The UCS analysis combined property data from the online real-estate company Zillow with peer-reviewed methodology developed by the nonprofit for assessing areas at risk of frequent flooding. Using three sea-level-rise scenarios developed by the National Oceanic and Atmospheric Administration and localized for this analysis, UCS determined how many residential and commercial properties along the entire lower 48 coastline are at risk of becoming chronically inundated from high tides — flooding on average 26 times annually or more, or the equivalent of once every other week — in the coming decades even in the absence of major storms.

Shana Udvardy, a climate resilience analyst with the UCS who co-authored last year’s report, recently spoke with ecoRI News about sea-level rise and the growing risks of chronic inundation.

“We put this together because a lot of potential homebuyers don’t necessarily know that their home is at risk of tidal flooding,” she said. “Or that things like home insurance doesn’t cover flooding, so you need flood insurance.”

The core results in the 2018 report are from the high sea-level-rise scenario — an appropriately conservative projection to use when estimating risk to homes, according to Udvardy. This scenario projects an average of 1.9 feet of sea-level rise for Massachusetts in 2045 and 6.9 feet in 2100. The analysis also projects how many properties might avoid such flooding if sea-level rise is constrained through the achievement of the long-term temperature goals of the Paris Agreement and if ice loss is limited.

The results for Massachusetts, in particular, are sobering. The analysis found that without additional measures to adapt to rising seas that:

By 2045, about 7,000 of today’s residential properties, currently home to roughly 14,000 people, are at risk of chronic inundation. The total number of at-risk residential properties jumps to nearly 90,000 — home to about 178,000 people — by 2100. While Massachusetts has a network of shoreline stabilization structures along its coast, few of these are designed to keep out higher tides.

By 2045, more than $4 billion worth of residential property — based on today’s values — is at risk of chronic flooding. The homes that would face this flooding at the end of the century are currently worth roughly $63 billion — an amount that would rank the state fifth nationally in 2100 for value of residential properties at risk.

The Massachusetts homes at risk in 2045 currently contribute about $37 million in annual property-tax revenue. The homes at risk by 2100 currently contribute roughly $413 million collectively in annual property-tax revenue.

By 2045, five Massachusetts communities are projected to have 600 or more at-risk homes: Revere, Marshfield, Quincy, Hull, and Salisbury. In Salisbury and Hull, these homes represent more than 10 percent of the local property-tax base.

Homes valued below the state median are disproportionately at risk of chronic inundation in the next 30 years. Revere, Saugus, and Winthrop — all working-class suburbs of Boston — have large clusters of at-risk homes.

Massachusetts ranks fourth in the nation for the most commercial properties at risk by the end of the century. By 2045, nearly 500 of today’s commercial properties in Massachusetts, currently assessed at more than $1 billion, would experience chronic inundation. In 2100, this number jumps to roughly 8,000 properties — assessed at about $35 billion today.

Coastal flooding, as seen here in March 2014 on Main Street in Warren, R.I., is being caused by more frequent and intense rains and storms. (ecoRI News)

Coastal flooding, as seen here in March 2014 on Main Street in Warren, R.I., is being caused by more frequent and intense rains and storms. (ecoRI News)

Market crash
Once market risk perceptions catch up with reality, the potential drop in coastal property values could have reverberations throughout the economy, according to the UCS, and could potentially trigger regional housing market crises.

Homeowners whose properties become chronically inundated may find themselves with mortgages that exceed the value of their homes, or face steeply rising flood insurance premiums. Lenders carrying large numbers of these risky mortgages could lose money or even become insolvent, with smaller banks concentrated in areas with high-flood risk being especially exposed. Coastal real-estate investors and developers may similarly experience financial losses in some coastal areas.

Udvardy noted that there are many federal, state, and local policies that, while originally well intentioned, mask risk and create incentives that reinforce the status quo or expose more people and property to risk. The market’s bias toward short-term decision-making and profits can also perpetuate risky development and investment choices. These flawed policies and incentives include incomplete or outdated flood-risk information, subsidized insurance, lax zoning and building codes, and incentives for business-as-usual development and rebuilding.

Identifying and improving the best policies and market drivers of risky coastal development is necessary to better protect communities, Udvardy said. She noted the importance of “climate-safe infrastructure.”

To use the UCS’s interactive mapping tool, click here. The map allows you to learn more about the impact of chronic inundation on properties, people, home values, and the tax base in specific states, communities, or ZIP codes. When you zoom in, the maps become more detailed. You can also click on a specific state or community for more details about it.

Udvardy encouraged municipal and state officials to use the report and UCS website as a climate-change tool.

“The need for action is now,” she said.

ecoRI News staffer Joanna Detz contributed to this report.