When Hurricane Michael touched down in mid-October, it destroyed rows of homes in the Florida Panhandle, leaving behind just a few surviving structures. In Mexico Beach, Florida, only one oceanfront home was left fully intact: a two-story property made of concrete and steel cables.

Unlike other structures in the area, the miracle home – known as Sand Palace – had been built to withstand winds of up to 250 mph. Its owners, Russell King and Lebron Lackey, outfitted the structure with elevated pillars and breakaway walls that would detach in the event of a storm.

“We wanted to build it for the big one,” Lackey told the New York Times. “We just never knew we’d find the big one so fast.”

Like his home, Lackey is somewhat of an anomaly. Though architects in recent years have developed methods for protecting against floods and heavy winds, few homeowners have adopted these innovations. According to the US Census Bureau, only 8% of the 800,000 single-family homes built last year (around 64,000) used concrete frames – a feature that protects against hurricanes.

All the while, the threat of a disaster looms large.

Buyers still love living by the water

When Hurricane Sandy swept the coast of New York and New Jersey in 2012, entire communities were forced to rebuild. In the seven years since, government-sponsored initiatives like the US Army Corps of Engineers and NYC Build it Back have done a remarkable job of cleaning up these communities – so remarkable, in fact, that many seem to have forgotten about the devastation.

In the immediate aftermath of the storm, Sandy was at the forefront of buyers’ minds.

“They wanted specifics,” said Christina DeCurtis, a broker in Queens. “Were they required to have flood insurance? How did [flooding] affect the common charges? Was there an assessment?”

Years later, these questions have all but dissipated. Property values have continued to climb in tune with national and statewide trends. The market is hot – and coastal homes are seen as a top commodity.

This is true not only in Queens, but also in wealthy enclaves like the Hamptons.

“There’s oceanfront in the Hamptons and then there’s everything else,” said Matt Breitenbach, a local real estate broker. In recent years, he said, the area’s buyers have transitioned from old-money families to “late 30s private equity guys” who value location over square footage. Instead of seeking out the typical Hamptons McMansion, they’re on the hunt for Malibu-style beach homes – the closer to the water, the better.

Breitenbach said that waterfront properties could go for ten, even twenty, times more than the rest of Hamptons real estate.

Many of these buyers are unaware of the fact that $3.6 billion worth of Southampton housing could be flooded by 2045, the second-highest amount among coastal communities in the US. Miami Beach is first, with $6.5 billion worth of homes at risk, while Ocean City, New Jersey, ranks third.

Here are the coastal communities with the highest property values at risk of flooding:

1. Miami Beach, Florida

2. Southampton, New York

3. Ocean City, New Jersey

4. Central Coast, California

5. San Jose, California

6. San Mateo, California

7. Miami, Florida

8. Long Beach, New Jersey

9. Upper Keys, Florida

10. Bradenton, Florida

Despite its urban location, Queens makes the top 25, with $1.2 billion worth of homes – or more than 2,700 residences – likely to experience flooding by 2045. In the Rockaways and Howard Beach, many homes are still boarded up from Sandy, with owners fighting over insurance claims or struggling to afford the cost of reconstruction.

But DeCurtis said that residents haven’t drawn a connection between the devastation of the past and the threat of future damage.

“It went from people’s mind relatively quickly,” she said. “People don’t think about it until they’re much closer to it actually being a probability.”

The same goes for Hamptons buyers, who might consider rising sea levels, but won’t let it inform their purchase.

“It’s not going to come up in an offer or dissuade them from purchasing a home,” said Breitenbach. “If you want to be on the ocean, you want to be on the ocean.”

Who should be worried about flooding?

Two years ago, DeCurtis worked on a Long Island City development that built its electrical grid on the ground level, despite being located directly along a flood zone.

“I remember thinking to myself that it probably should have been moved up higher in the event that something ever happened again,” she said. But there were no requirements that prepared the building for rising sea levels.

A year after Sandy, New York introduced a climate resiliency plan that included new building codes and $335 million worth of upgrades to Manhattan’s storm defenses. Both the costs and the guidelines are still being weighed.

In the wake of Hurricane Michael, many have identified the need for similar upgrades. While Florida’s building codes were updated in 2007 to include safe construction elements like shatterproof windows, buttressed roofs, and stable concrete pillars, these regulations only applied to new construction within a mile of the shore. This meant that coastal structures that were either slightly inland or built prior to 2007 were ill-equipped to weather the storm.

According to Albert Slap, the president of Coastal Risk Consulting, most building codes “are backward-looking” when it comes to flood risk. One prominent exception, he said, is Miami Beach, which recently updated its code to require buildings to be elevated more than seven feet above the flood line.

Many of Miami’s existing structures will have to be torn down and rebuilt to comply with the new rule. Over the next five to twenty years, Slap said, the city’s entire building stock will become more resilient, and its market value could increase. That is, until rising sea levels threaten to submerge the entire community.

While Miami is able to rely on tourism and tax revenue to help fund its reconstruction, other cities are less fortunate. Slap said he’s particularly worried about Savannah, Charleston, Annapolis, and the Jersey Shore, which have a high flood risk, but fewer resources.

“Having communities that are entirely devastated because we don’t want to bite the bullet and put in building code requirements at a higher cost does not serve us well in the long term,” said Lisa Lindsay, the executive director of the nonprofit Private Risk Management Association.

The climate bubble is the new housing bubble

As in the housing bubble pre-2008, many buyers and sellers aren’t aware that there is a problem.

“You really have to look for information [about flooding and sea level rise],” said DeCurtis. “It’s not really being drilled into the consumer’s head.”

Not even flood maps from the Federal Emergency Management Agency (FEMA) tell the full picture.

“If you take Hurricane Harvey, Hurricane Florence, and now Hurricane Michael, people who relied on FEMA flood maps to make decisions were tragically surprised when storm surge and other types of flooding reached them,” said Slap.

Prior to Hurricane Michael, owners of many damaged homes in Mexico Beach had been told they didn’t need flood insurance. A 2018 study from the University of Bristol finds that 41 million Americans are at risk of flooding from rivers, yet only 5 million Americans are protected by an insurance policy.

As a broker, DeCurtis said it’s not her place to warn buyers about potential climate-related disasters.

“There’s probability in this,” she said. “We can’t say it’s guaranteed that the sea level will rise, so us real estate professionals have to be really careful.”

At the very least, said Lindsay, coastal communities should be able to depend on local leaders and insurance workers. There might even be a domino effect between the two: If insurance companies required homeowners to have storm shutters or hurricane straps on their roofs, she said, it could force governments to adopt more stringent building codes.

But that could take years, allowing more time for hurricanes and other disasters to wreak havoc on coastal communities.

“It’s going to be a long process,” said Slap. “Some areas and neighborhoods are going to fall by the wayside.”

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