Earlier this year, the National Centers for Environmental Information reported natural disasters caused more than $300 billion in damages during 2017, a record-setting year that encompassed several damaging hurricanes, as well as wildfires and mudslides in California. According to a new report by the Union of Concerned Scientists (UCS), however, the long-term risks from climate change-related flooding stands to become much worse by the end of the century.
The UCS report states that as many as 311,000 coastal homes will be at risk of chronic flooding within the next 30 years—coincidentally, as the report points out, the average lifespan of a mortgage. Those potentially affected homes are worth around $120 billion today. Nearly 14,000 coastal commercial properties will also be at risk of chronic flooding during that time frame, with an assessed value of around $18 billion. The potential economic damage will become much worse as we near the end of the century, the UCS reports.
By the end of this century, the UCS report estimates that homes and businesses worth a combined current value of more than $1 trillion could be at risk from chronic, climate-change-related flooding. How does that trillion break down? It works out to approximately 2.4 million homes, currently worth nearly $912 billion, and around 107,000 commercial properties, currently assessed at $152 billion.
To put that in further perspective, those 2.4 million homes are roughly the equivalent of every home in both Los Angeles and Houston combined. The UCS report defines “chronic flooding” as “flooding an average of 26 times per year or more.”
“What’s striking as we look along our coasts is that the significant risks of sea level rise to properties identified in our study often aren’t reflected in current home values in coastal real estate markets,” said Rachel Cleetus, an economist and policy director for the Climate and Energy Program at UCS, as well as a report co-author. “Unfortunately, in the years ahead many coastal communities will face declining property values as risk perceptions catch up with reality. In contrast with previous housing market crashes, values of properties chronically inundated due to sea level rise are unlikely to recover and will only continue to go further underwater, literally and figuratively.”
The UCS report explains that “the properties at risk by 2045 currently house roughly 550,000 people and contribute nearly $1.5 billion toward today’s property tax base. These numbers jump to about 4.7 million people and $12 billion by 2100.”
“For some communities, the potential hit to the local tax base could be staggering,” said Kristy Dahl, a senior climate scientist at UCS and report co-author. “Some smaller, more rural communities may see 30, 50, or even 70 percent of their property tax revenue at risk due to the number of chronically inundated homes. Tax base erosion could create particular challenges for communities already struggling with high poverty rates.”
Nor are these dangers strictly limited to decades down the road. A recently released CoreLogic report estimated that that 6.9 million homes could be at risk of hurricane storm surge damage in 2018, with more than $1.6 trillion in potential reconstruction costs at stake.