Miami Real Estate Investors Not Deterred by Rising Sea-Level

Miami Real Estate Investors Not Deterred by Rising Sea-Level

Amid the current Miami real estate boom, naysayers are questioning more than a possible “bubble burst” as experienced in recent years. There is a very real potential for a much greater issue to dampen the rapidly growing market (pun absolutely intended). According to a recent Yahoo News article, scientists are claiming that rising seas could overtake much of the area as soon as the end of the century. Yet despite this impending doom, millions of dollars are being spent on some of the world’s most luxurious residences and investors are scooping them up in droves. On one hand, many believe that the boost in property tax dollars will help offset the looming cost of preparations for the effects of climate change. But on the other, some scientists doubt that enough can be done in time to hold the water at bay.

Florida is the third most populated state in the U.S., and its 20 million residents are all vying for their own spot on one of the many sandy beaches. And experts agree, with baby boomers quickly approaching retirement, that number will only go up.  While most who live there (especially in Miami Beach) have gotten used to seeing the streets flooded with seawater at times, city planners acknowledge that it will take major work to protect the coastline of the state whose mean elevation is just 100 feet above sea-level. In Miami Beach alone, $300-500 million is needed to install a pumping system to help remove the standing water. Miami Beach Public Works director, Eric Carpenter is in charge of the project and stated that “new development is good because it basically strengthens our tax base. You need to prepare for a rainy day while it’s still sunny outside.” In 2014, the city collected $128 million in property taxes alone, up 8.8% from 2013, and has already installed 25 of the 80 massive pumps in its current plans. And it appears the pumps are working. The tide is at a highest stage during the month of October and the system helped keep the sea water almost completely out.

While recent success is encouraging, authorities warn that pumping is just a short-term fix. It can not fight (and defeat) a quickly rising sea-level. But something has to be done. Miami Beach’s real estate is valued at more than $27 billion alone. Experts are predicting that by 2100, the sea-level could rise as much as six feet, which would put about ⅔ of Miami Beach underwater. Peter Harlem, geologist at Florida International University,  warns that the current strategy won’t save the city. He stated that “if you spend it on the easy stuff, you’re not going to have any money left for the hard stuff.” One possible solution that is being considered involves building and retrofitting some city infrastructure at higher levels, which would not be cheap. But if all of the tax revenue is spent on short-term fixes, both time and funds will have been spent, and impending doom would face the area.

Despite all of the doom and gloom, the sunshine state is still experiencing a phenomenal boom in real estate sales. “People are coming in and paying top-dollar for units, record-breaking prices, higher than ever before,” said Harvey Daniels, vice president of development sales at One Sotheby’s Miami. It’s obvious that both investors and developers are optimistic about the future of South Florida, despite sea-level predictions. “It 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,” Daniels added.

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