Buyers undaunted as climate change risks staggering number of US homes

Experts call for coordinated action to address dangers posed by flooding, fires and rising temperatures

(Getty Images)
(Getty Images)

Ian Solomon is just 24, but he has already faced some of the most severe consequences of climate change — from fires to floods.

Last year, sharing a house with four friends in Compton, California, he remembers struggling to breathe as wildfires turned the sky red and ashes fell around him. His sinuses constantly inflamed, he left before the next fire season, moving into a studio loft in Detroit, his hometown.

But the city’s aging infrastructure couldn’t withstand the frequent extreme weather. Storms swept through Detroit, flooding the hallways of his building and leaving thousands without power for days. Solomon built barricades and pondered his future.

“Being young at this point, I’m kind of looking at my life like, okay, how do I set it up for the next 10 years?” said Solomon, a photographer. “I’m trying to make a smart move for the future, and at this point it feels pretty uncertain.’’

Even as climate change threatens to destroy hundreds of thousands of homes in the coming decades, Solomon is one of relatively few Americans factoring it into decisions about where to live.

Americans’ romance with coastal living is headed for heartbreak as climate change threatens to make their beachfront homes unlivable. Mitigating the risks could be costly, and experts are urging the government to come up with a more coordinated plan for how to finance and address these issues before it’s too late. 

The answer may be a more coordinated use of voluntary buyouts, a relocation strategy used to reduce risk to individual properties and households. Such buyouts could be paired with managed retreat efforts, which involve relocating entire communities and demolishing housing, roads and other infrastructure that are left behind.  

“Our current buyout programs are not well positioned to rise to that challenge,” said Anna Weber, a policy analyst at the Natural Resources Defense Council. “In other words, managed retreat is what we don’t have a coordinated plan for, and that’s what’s scary. 

It’s an effort that could cost billions over the years, but could save trillions in the long run. 

What’s at stake?

Floods have caused more than $155 billion in property damage over the past decade, according to the Federal Emergency Management Agency. More than 300,000 of today’s coastal homes and commercial properties, worth roughly $136 billion, are at risk of chronic flooding by 2045, according to the Union of Concerned Scientists. Florida and New Jersey have the most to lose. 

Solomon has pretty much ruled out coastal cities in Florida and the Northeast because of rising sea levels, but there are still plenty of people rushing into those very places.  

“Any research that I’ve seen just shows that it’s not an ‘if’ but a ‘when’ situation,” Solomon said. “The oceans are going to be what’s really dangerous … as far as extreme weather.”

Yet populations in 50 U.S. counties with the most homes facing high-heat risk rose by 4.7 percent from 2016 to 2020, according to a recent Redfin analysis. Populations grew by 3.5 percent in the 50 counties with the largest share of homes at risk for drought, 3 percent in counties at risk for fire, nearly 2 percent for homes at risk for flooding and 0.4 percent for homes at risk for storms. 

In South Florida, sales of waterfront homes have surged despite the threat from extreme weather and rising insurance costs in the most flood-prone areas. Residential sales volume reached $33 billion in the tri-county region of South Florida, a 47 percent increase year-over-year, according to data from Analytics Miami. 

In Coconut Grove, a Miami neighborhood that experienced a storm surge during Hurricane Irma in 2017, a waterfront spec mansion recently sold for $65 million, breaking a record set earlier this year. Both properties had Flood Factor scores of either 9 or 10, meaning they were at the most risk of flooding. 

Sea level rise may have played a role in the deadly collapse of the Champlain Towers South, the condo tower in Surfside, Florida, that collapsed this summer, killing nearly 100 people. One report found that the oceanfront building had been sinking at a steady rate for years. 

Higher temperatures and drier conditions could make for longer, more intense wildfire seasons, with 2020 seeing roughly 10 million acres burned, the second-highest total in a year since 1960, according to the Congressional Research Service. A massive blaze in California destroyed more than 1,000 buildings — most of them homes —  just last month, the AP reported.  

Average sea level rise is expected to be 24-30 centimeters (9-12 inches) as soon as 2065 and will persist even if greenhouse gas emissions are stopped, according to the United Nations’ recent climate report.  

That means if you buy your dream home on the coast or in a fire zone today with a 30-year mortgage, it could burn or be washed away long before you even pay the loan off.

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“People think their houses are financial investments, but in some places that won’t be the case,” said A.R. Siders, a professor at the University of Delaware who focuses on climate change adaptation policies. “If floods get worse, homes in these areas may start to lose value, and owners need to be prepared for that.”

In Southeast Florida alone, higher tides could reduce property values by more than $4.2 billion by 2040, and a 10-year storm tide could result in $3.2 billion in property damage, according to the Urban Land Institute. 

Coordinated effort needed

To address the impacts of climate change on real estate, experts are calling for the federal government to come up with more coordinated use of buyouts and managed retreat to address relocation efforts as extreme weather rages across vulnerable coastal communities. 

Versions of managed retreat, which is funded by FEMA and other government agencies, have been around for decades.

Miami-Dade County, Florida, purchased a home after it flooded multiple times in 10 years, prompting the owner to file two insurance claims during that period. The county turned  the property into a “stormwater park” to help reduce flooding nearby. 

But funding of such projects has come from a patchwork of sources, and there has been little coordination between projects in different locations, Weber said. “It’s rare that a single funding source will cover an entire project, so if you have a community that wants to do buyouts, often they’ll have to mix and match these funding programs, which you can imagine gets pretty complicated,” Weber said. “Money is available at different amounts, different times, after a disaster, sometimes part of a program that’s not tied to any particular disaster.’’ 

As disasters proliferate, so does talk of managed retreat as the best response, despite the potentially astronomical costs. 

It would cost $180 billion for the government to remove just 1 million floodplain properties, a move that would save $1.16 trillion over a 100-year period, according to a 2020 government-backed report. It would avert property damage using federally subsidized flood insurance and other disaster programs, which cost roughly $17 billion a year.  

While most voluntary buyouts are for flooding disasters, climate resiliency specialists are suggesting that it could be a strategy applied to communities in wildfire-prone areas, too. 

“This topic has gained interest over the last two decades,” said Siders. “A lot of this could attribute to the number and size and just frequency of disasters that we’re seeing now.”

Seawalls and stilts

Without a coordinated strategy, homeowners and communities have mainly relied on more short-term measures. Building seawalls, installing levees and raising homes on stilts can mitigate risk, but the temporary payoffs have some questioning if they’re worth it. 

The $14 billion of levees and floodwalls in New Orleans, for example, are likely to be inadequate in the next two years as they sink below rising sea levels, Scientific American reported. The systems were challenged when Hurricane Ida slammed the coast late last month, causing some floodwalls and levees to fail around

As risks grow and the flood-impacted real estate loses its value, such investments become harder to justify. 

“Developers have control over the confines of their own parcels, but they could be faced with negative consequences from reduced investor interest and lack of financing and insurance,” wrote Urban Land Institute advisory board members Scott MacLaren and Greg West. “If this is the case, it may be too late to recover.” 

Though more people have headed to Florida in recent years, skyrocketing insurance costs and depreciating home values in at-risk areas already have some wealthy residents moving inland. Without financial support, lower-income families who can’t afford to move elsewhere are the ones often left in harm’s way. 

“There’s more of a recognition that our standard approach of ‘let’s build a levee’ or ‘let’s elevate the house’ isn’t necessarily working,” Siders said. “It’s not enough to deal with the frequency and severity of hazards we’re getting these days.”

Despite being young, Detroit resident Solomon still remembers how much the seasons he experienced as a child have changed from the seasons he’s experiencing now. These days, he’s been busy researching what types of disasters insurance covers, and to what extent. 

“It almost feels [over-]dramatic when you talk about it, but when you look at what’s actually happening and it’s like, oh, yeah, this is serious,” Solomon said.