Coastal infrastructureMiami Beach luxury real estate market is booming in the face of rising sea levels

By 2100, sea levels could rise by as much as six feet. Miami Beach, with its dense population and low altitude, is on the list of U.S. cities at greatest risk. This recognition has not slowed down the region’s luxury real estate market.

“It is a great moment for Miami Beach, there are a lot of the projects, everything is selling very, very quickly,” said Harvey Daniels, vice president of development sales at One Sotheby’s Miami, who is selling condos at the Ritz-Carlton, 111 luxury homes from $1.8 million to $16 million.

Miami Beach, which sits on an island just off downtown Miami. Its real estate alone is valued at $2.7 billion, and the population of the city is expected to increase in the coming years. According to census estimates, Florida, already the third most populous U.S. state, is expected to grow as the U.S. baby boom generation heads into retirement.

Increasing population, rising sea levels, and several new property developments might seem like a mixture ideal for disaster, but city officials are betting that a property boom will fuel real estate tax coffers which will, in turn, fund big investments that deal with the effects of climate change. In 2014, Miami Beach collected $128 million in property taxes, up 8.8 percent from 2013.

“New development is good because it basically strengthens our tax base,” said Miami Beach Public Works director Eric Carpenter.

To help drain city streets during high tides and floods, Miami Beach is installing an eighty pumping system units expected to cost between $300 and $500 million. “You need to prepare for a rainy day while it’s still sunny outside,” said Carpenter, who is in charge of the pump project. He told Agence France-Presse that now is the time the city should be investing money into improving infrastructure “because we do have increasing tax-base coming in with these new developments.”

The city has already installed twenty-five pumps and the results from an October high tide are encouraging — sea water was almost kept out of the city entirely.

Many scientists, however, are skeptical of plans to solve the city’s flood and tackle sea level rise problem with pumps. They say pumping provides a short term solution, but it cannot turn back rising seas if the pace of sea level rise itself increases. Some climate change experts have suggested building and retrofitting some city infrastructure at higher levels. “If you spend it on the easy stuff, you’re not going to have any money left for the hard stuff,” said Florida International University geologist Peter Harlem, who uses models to forecast sea-level rise. “So my concern is the longer-term sea level rise that’s going to get real expensive — and if we’re all broke because we blew all that money saving a few places that should have been moved” (see “$500 million, 5-year plan to help Miami Beach withstand sea-level rise,” HSNW, 6 April 2015; and “Miami Beach to raise West Avenue in the face of sea-level rise,” HSNW, 26 January 2015).

Luxury property developers and buyers seem to have faith in Miami Beach’s promise to find a solution to the effects of climate change, as talk of sea-levels rising has not discouraged property sales. “People are coming in and paying top-dollar for units, record-breaking prices, higher than ever before,” said One Sotheby’s Daniels. Sea-level rise is “definitely something that I think will have some type of impact far in the future, but the city of Miami Beach is taking major precautions,” he said.

“It certainly hasn’t affected our sales or slowed down our sales. We haven’t lost any deals because of it. And I don’t anticipate we will.”