Coastal infrastructureSea level rise or not, coastal development in south Florida is booming
Miami and Miami Beach are both considered ground zero for the challenges posed by climate change, as both cities will experience considerable sea level rise by mid-century. Constant flooding will become the norm as high tides reach shores, posing a threat to property and human life. As discouraging as the future may seem for South Florida, residents, real estate investors, and companies are increasing their investments in the area.
Miami and Miami Beach are both considered ground zero for the challenges posed by climate change, as both cities will experience considerable sea level rise by mid-century. Constant flooding will become the norm as high tides reach shores, posing a threat to property and human life. Eventually, lower-lying areas of both cities will be uninhabitable, and according to Bloomberg Businessweek, the Biscayne Aquifer, where southeast Florida draws most of its drinking water, will be infiltrated with saltwater, a problem whose only solution may be billions of dollars invested in water treatment plants.
As discouraging as the future may seem for South Florida, residents, real estate investors, and companies are increasing their investments in the area. In the last two years, twenty-five new condo projects have been announced in the downtown Miami area. “We seem to be on the cusp of another boom,” said Peter Zalewski, a principal at Condo Vultures.
Residents and city planning officials have acknowledged the risk of sea level rise, but instead of sounding the alarm and risk discouraging real estate investors, the strategy seems to be to allow new property developments to continue as they will create more tax revenue which the city could use to fund public infrastructure that combats climate change.
Businessweeknotes that South Florida relies almost entirely on real estate taxes to fund public infrastructure, so if the threat of sea level rise diminishes property valuations, there will be less public money to address the risks posed by climate change. Simply put, the growth in area real estate will help the region better prepare for sea level rise.
“We have approximately $22 billion worth of property value in the seven square miles that make up Miami Beach,” Miami Beach Public Works director Eric Carpenter told Governing in September. “So when you’re looking at it from a perspective of having $22 billion in assets, coming up with half a billion dollars to become resilient becomes a little bit more manageable.”
Carpenter recently argued that the city should accelerate its investment in storm-water drainage improvements ($100 million now and $400 million planned) because the city has the tax base to afford it now- a position not guaranteed in the future.
On why some real estate developers continue to invest in the Miami region despite the threats of climate change and its potential effects on vulnerable properties, Businessweek explains that the short term gains from new property developments far outweigh the long term risks posed by climate change. Additionally, many of the buyers and investors in Miami’s new property developments are cash investors from Latin America, where the risks of Miami real estate remain small relative to similar investments back home.
