There is a growing scientific consensus that climate change and the resulting rise in sea level will cause Miami to be physically underwater by the early part of the next century. In spite of this reality, Miami’s real estate market has been undergoing a major resurgence in recent years with little-to-no precautions being taken to ensure long-term viability. No matter how you view it, the situation is a real problem that demands attention. This post sheds light on the dichotomy between the apparent appeal of Miami real estate, and the environmental situation that threatens to render much of the city uninhabitable.
Two years ago, 62.9% of the Miami real estate market consisted of distressed real estate. As the subprime mortgage crisis fades, Miami’s real estate market is making significant strides. Known for its nightlife and year-round warm weather, the southern tip of the United States has been the target of widespread development, a massive influx of foreign investment, and record-breaking sales. In 2012, an anonymous Russian buyer purchased a compound in Indian Creek for 47 million dollars. It was an all-cash deal that broke the previous record for Miami-Dade County which had been set just a few months prior; yet notably, properties in the area at all price points have been experiencing marked growth in recent years.
Although Miami’s real estate market appears to be on an upward trajectory, an article released in Rolling Stone earlier this year sought to grapple with and warn of Miami’s impending nautical demise. An increasing number of scientists are researching and understanding the potential impacts of climate change, with some estimating the rise in sea level over the next 100 years will range from a few to ten or more feet. A city situated at sea level, like Miami, could be devastated by even the most conservative of these estimates. Moreover, as postulated in the Rolling Stone article, that process may not be a gradual one if, for example, a severe hurricane were to accelerate the rise in water levels by inundating the area with heavy rainfall.
The city of Miami is being confronted with a serious problem, but it is by no means a problem that could not be solved if developers and politicians addressed it head-on. L’acqua alta, or “high water” is a phenomenon that affects Venice, Italy, where the high tide causes flooding over much of the city. As Venice has adapted to and is accustomed to the phenomenon, l’acqua alta is perhaps less dangerous than snow-covered streets in the northeastern United States during the winter months. Miami must prepare itself for a similar reality.
As a native Floridian, I am excited that Miami’s real estate market is undergoing a major resurgence, and that development projects such as the Porsche Design Tower, and the billion dollar Brickell CitiCentre are reshaping the Miami cityscape. However, it is concerning that none of the development plans seemingly account for the impending rise in sea level. Investing in real estate is about looking into the long-term viability of a property or project. More developers ought to remind themselves of this well-established principle, and consider how underwater their mortgages will be when the city of Miami is literally under a few feet of water.