bobby1933 (bobby1933) wrote,
bobby1933
bobby1933

Rising Sea Levels, Plummeting Waterfront Property Values? - CityLab

"Englander draws the analogy between coastal real estate and the mortgage-backed securities that precipitated crisis on Wall Street when they were suddenly discovered to be worth a fraction of their stated value. Coastal land, he argues, is similar. “We assume it’s going to be there as long as Colorado will be there, and now we know it won’t."

This isn’t to guarantee that waterfront property values have a 2008-style meltdown coming.

Englander cites two reasons for possible gradual decline: One is that the wealthy may be willing to invest in the best waterfront properties "even if there is a risk of them disappearing in the coming decades." Another: that people tend to rationalize real estate investments over a 30-50 year period.

But he adds that contributing to the potential decline are rising insurance rates. The New York Times reported Monday that Sandy will rank as the nation’s second-worst storm, after Katrina, in terms of claims paid out by the National Flood Insurance Program.

The federally backed, nationwide flood insurance program offers policies that private providers largely refuse to write. It’s also drowning in $18 billion of red ink, and a series of rate increases are on the way.

"Inevitably, governments will not be able to compensate everyone for the risk of assets exposed to rising sea level," Englander writes. "The key questions are when that will happen, how m
Rising Sea Levels, Plummeting Waterfront Property Values? - CityLab


But will they throw billions away on worthless property to convince us that we are wrong in worrying about climate change?
Tags: economy, power
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