Housing Market Response to Sea-Level Rise in Florida

Coastal Research Library Volume 37 Series Editor Charles W. Finkl, Department of Geosciences, Florida Atlantic University, Boca Raton, FL, USA The aim of this book series is to disseminate information to the coastal research community. The Series covers all aspects of coastal research including but not limited to relevant aspects of geological sciences, biology (incl. ecology and coastal marine ecosystems), geomorphology (physical geography), climate, littoral oceanography, coastal hydraulics, environmental (resource) management, engineering, and remote sensing. Policy, coastal law, and relevant issues such as conflict resolution and risk management would also be covered by the Series. The scope of the Series is broad and with a unique cross-disciplinary nature. The Series would tend to focus on topics that are of current interest and which carry some import as opposed to traditional titles that are esoteric and non-controversial. Monographs as well as contributed volumes are welcomed. Charles W. Finkl, Coastal Education & Research Foundation, USA Email: cfi[email protected] More information about this series at http://www.springer.com/series/8795 Risa Palm • Toby Bolsen Housing Market Response to Sea-Level Rise in Florida Risa Palm Urban Studies Institute Georgia State University Atlanta, GA, USA Toby Bolsen Political Science Department Georgia State University Atlanta, GA, USA ISSN 2211-0577 ISSN 2211-0585 (electronic) Coastal Research Library ISBN 978-3-030-88434-5 ISBN 978-3-030-88435-2 (eBook) https://doi.org/10.1007/978-3-030-88435-2 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland To Eliot, Emma, Justin, and Katelyn Acknowledgments The authors would like to thank Georgia State University for providing funding to support graduate student assistants and the costs of acquiring survey responses. We thank Justin Kingsland, December Weir, and Chelsea Johnson for their help in data collection, cleaning, analysis, text editing, and the creation of several of the figures in this book. We appreciate Laura Villo’s assistance in handling the Amazon gift cards for the real estate agent participants. We thank Jeremy Craig for his careful review of the manuscript and his suggested changes. We thank the First Street Foundation for permission to use images from Flood Factor. We are grateful for the helpful suggestions from several colleagues including Donald Reitzes, Jan Nijman, Ann-Margaret Esnard, Nancy Marlin, and David Greenland. Jeremy Kopkas provided both editorial advice and prepared the manuscript following the publisher’s guidelines for electronic submission. Of course, any errors should be attributed to the authors. vii Contents 1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 5 2 The Development of Vulnerable Real Estate in South Florida . . . . 2.1 A Legacy of Vulnerability . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2 Do Florida Residents Perceive Their Homes as Vulnerable to the Impacts of Climate Change? . . . . . . . . . . . . . . . . . . . . . 2.3 Resolving the Conflict: A Survey of Real Estate Agents . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 10 . . . 14 15 17 House Price Trends in Coastal US Cities . . . . . . . . . . . . . . . . . . . . 3.1 The Coast as an Amenity in the Pricing of Houses . . . . . . . . . 3.2 Flood Insurance as an Additional Cost in Coastal or Riverine Flood-Prone Areas . . . . . . . . . . . . . . . . . . . . . . . . 3.3 Flood Insurance in Florida . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.4 Does the Cost of Flood Insurance Influence Home Buyer Behavior or House Prices? . . . . . . . . . . . . . . . . . . . . . . 3.5 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 22 . . 23 25 . . . 28 33 34 . . . . 39 40 42 43 . . . 45 46 47 3 4 Effective Communication About Climate Change and Sea-Level Rise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1 Beliefs About Climate Change and Sea-Level Rise . . . . . . . . . 4.2 How the Concept of Climate Change Became Polarized . . . . . 4.3 Using Visual Imagery to Convey Risks of Sea-Level Rise . . . . 4.4 The Addition of Visual Imagery About Flood Hazards to realtor.com . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.5 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix x Contents The Role of the Real Estate Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1 The Real Estate Sales Profession . . . . . . . . . . . . . . . . . . . . . . . 5.2 Real Estate Agents in Florida . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3 How Real Estate Agents Influence the Search for a New Home . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4 The Duty to Disclose by the Seller and the Real Estate Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.5 Are Florida Homebuyers Concerned with Flood Risk? . . . . . . . . 5.6 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 60 62 63 6 Methodology: Survey of South Florida Realtors . . . . . . . . . . . . . . 6.1 Respondent Characteristics . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2 Submarket Differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.3 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 70 71 72 73 7 Information About Sea-Level Rise and Its Effects on Home Search Behavior . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1 Information Available to Homebuyers About Flood Risk . . . . . . 7.1.1 Familiarity with the Area: Most Homebuyers Are Local . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1.2 Information from Federal and Local Government . . . . . . 7.1.3 Elevation Certificate in the Process of Purchasing Flood Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1.4 Information from the Real Estate Industry . . . . . . . . . . . 7.2 Response of Buyers and Sellers . . . . . . . . . . . . . . . . . . . . . . . . 7.3 Realtor® Support for the New Website . . . . . . . . . . . . . . . . . . . 7.4 Do Prospective Buyers Avoid Seeking Property in Low-Lying Coastal Areas? . . . . . . . . . . . . . . . . . . . . . . . . . . 7.5 Do Investors Differ from Owner-Occupiers? . . . . . . . . . . . . . . . 7.6 Do Buyers of Less Expensive Houses Avoid Low Elevation Property More Frequently? . . . . . . . . . . . . . . . . . . . . 7.7 Real Estate Agent Characteristics and Opinions About Buyer Behavior and Flood Factor . . . . . . . . . . . . . . . . . . . . . . . 7.8 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 8 The Housing Market in Coastal South Florida from the Perspective of the Real Estate Agent . . . . . . . . . . . . . . . . . . . . 8.1 Has the Threat of Sea-Level Rise Affected Florida House Prices? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.2 Do Lenders Consider Flood-Risk in Their Home Mortgage Decisions? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.3 Do Appraisers Consider Elevation or Susceptibility to Flooding in Their Assessment of Value? . . . . . . . . . . . . . . . . . . . . 53 54 56 57 75 76 76 77 77 80 82 82 83 86 88 88 90 92 . 95 . 96 . 97 . 99 Contents What Do Real Estate Agents Predict for the Next 5–10 Years? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.5 In Their Words . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.6 Impact of Demographic, Locational and Attitudinal Characteristics on Responses . . . . . . . . . . . . . . . . . . . . . . . 8.7 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xi 8.4 . . . 101 . . . 103 . . . 108 . . . 111 . . . 112 9 Four Communities: Vulnerable by Design . . . . . . . . . . . . . . . . . . . 9.1 Apollo Beach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.2 Cape Coral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.3 Hollywood . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.4 Punta Gorda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.5 Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 116 119 120 123 124 126 10 Implications of Housing Market Response to Sea-Level Rise in South Florida . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.1 Key Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.2 Looking to the Future . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129 130 132 136 Appendices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Appendix 1: Questionnaire . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Appendix 2: Survey Experiment . . . . . . . . . . . . . . . . . . . . . . . . . . . Appendix 3: Predictors of Views About SLR and Climate Change . . . . . . . 139 139 145 147 List of Figures Fig. 1.1 Florida beach. (Source: iStock photo) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fig. 2.1 Henry Plant’s Tampa Bay Hotel. (Source: Flickr Creative Commons) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Opa-Locka City Hall built in 1926. (Source: Creative Commons Attribution-Share Alike 4.0 International. https:// commons.wikimedia.org/wiki/File:City_Hall_(Opa-Locka, _Florida)_1.jpg) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Aladdin City, Florida. (Source: Clarke Historical Library, Central Michigan University, https://commons.wikimedia.org/wiki/File: Aladdin_City_Flordia_Land_Boom.jpg) . . . . . . . . .. . . . . . . . . . . . . .. . . . . Advertisement for Golden Gate Estates, Florida. (Source: Unknown author, Public domain, via Wikimedia Commons, https://commons.wikimedia.org/wiki/File:Golden_Gate_Estates, _Florida_-_Real_Estate_Sales_Brochure_Front.jpg) . . . . . . . . . .. . . . . Housing submarkets in the real estate agent survey . . .. . . .. . .. . . .. . Fig. 2.2 Fig. 2.3 Fig. 2.4 Fig. 2.5 Fig. 4.1 2 8 11 11 13 17 Projected flooding in Cape Coral, Florida. Area colored in purple would have 3 or more feet of floodwater. (Source: Flood risk data is provided by Flood Factor®, a product of First Street Foundation®) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 Fig. 6.1 Fig. 6.2 Experience, residency and sales volume . . . . . . . . . . . . . . . . . . . . . . . . . . . . Political identification by submarket . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 72 Fig. 7.1 Pinellas County storm surge. (Source: Pinellascounty.org) The depth of floodwaters for the house indicated with the red dot is shown in the picture above, along with information about evacuation from that location . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Elevation certificate required for Flood Insurance. (Source: FEMA.gov) . . . . . . . . .. . . . . . . . . . . .. . . . . . . . . . .. . . . . . . . . . .. . . . . . . . . . .. . . . . . Fig. 7.2 78 79 xiii xiv Fig. 7.3 Fig. 7.4 Fig. 8.1 Fig. 8.2 Fig. 8.3 Fig. 8.4 Fig. 8.5 Fig. 8.6 Fig. 8.7 Fig. 9.1 Fig. 9.2 Fig. 9.3 Fig. 9.4 Fig. 9.5 Fig. 9.6 List of Figures Detail from FloodIQ.com link in 2018. (Source: Flood risk data is provided by Flood Factor®, a product of First Street Foundation®) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Are buyers avoiding low-elevation coastal property? . . . . . . . . . . . . . . Are house prices for “at risk” properties “falling or not rising as rapidly”? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Are Mortgage loans affected? . . . . . . .. . . . . . . . .. . . . . . . . . .. . . . . . . . .. . . . . Does elevation impact appraised value? . . . . . . . . . . . . . . . . . . . . . . . . . . . . Properties listed for sale in April 2021 at prices of $5 million or more . . . .. . . . . . . .. . . . . . . . .. . . . . . . .. . . . . . . .. . . . . . . . .. . . . . . . .. . . . . . . .. . . . . . Impact of flooding on property market over next 5–10 years for full sample . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Future effect of flooding by submarket . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Example of an elevated dwelling. (Source: FEMA, Coastal Construction Manual) . . . .. . .. . .. . . .. . .. . .. . . .. . .. . .. . . .. . .. . .. . . .. . .. . Properties at a 1% risk of flooding in 30 years. Areas shaded in purple represent 3 or more feet of flooding. (Source: Flood risk data is provided by Flood Factor®, a product of First Street Foundation®) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Apollo Beach . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . Cape Coral . . .. . . . .. . . . .. . . . .. . . . .. . . . .. . . . .. . . . .. . . . .. . . . .. . . . .. . . . .. . . Hollywood, Florida . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Punta Gorda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Real estate agent responses from four vulnerable communities . . . 80 84 96 97 101 102 103 104 111 117 118 121 122 125 126 Fig. 10.1 Projections of rising sea-levels compared to historical trends. (Source: Southeast Florida Climate Compact) . . . .. . . . . . . .. . . . . . .. . . 133 Fig. A.1 Response to flood factor by treatment . . .. . . . . .. . . . . . .. . . . . .. . . . . .. . . 146 List of Tables Table 3.1 Table 5.1 Table 7.1 Table 7.2 Table 7.3 Table 7.4 Table 7.5 January 2021 FEMA flood insurance rates for Special Flood Hazard Zones . .. . . .. . .. . .. . .. . . .. . .. . .. . . .. . .. . .. . .. . . .. . .. . .. . .. . . .. . 27 Real estate agent rankings of the relative importance of neighborhood characteristics for homebuyers . . . . . . . . . . . . . . . . . . . . . 61 ® Realtor support for NAR’s decision and likelihood will recommend to others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Submarket responses to avoiding low-elevation coastal property . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Investors, second homebuyers, and owner-occupiers with respect to avoiding low elevation coastal property . . . . . . . . . . . . . . . . . . . . . . . . Avoiding low elevation property by submarket and property use by buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Real estate agents’ Characteristics and Beliefs about Buyer Behavior and Flood Factor . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . 82 85 87 87 91 Table 8.1 Real estate agents’ characteristics and beliefs about house prices falling, lender response and appraiser response to Property at risk of flooding . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . .. . . . . . . 109 Table 9.1 Table 9.2 Table 9.3 Table 9.4 Apollo Beach . .. . . . . .. . . . . .. . . . .. . . . . .. . . . . .. . . . . .. . . . . .. . . . . .. . . . . .. . Cape Coral .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . .. . . .. Hollywood Florida . . . . . . .. . . . . . . .. . . . . . . .. . . . . . . .. . . . . . . .. . . . . . . .. . . . Punta Gorda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Table A.1 Difference in support for NAS decision and likelihood of recommending between control vs. treatment . . . . . . . . . . . . . . . . . . . . . 146 Predictors of response to “sea-level scale” . . . . . . . . . . . . . . . . . . . . . . . . 148 Table A.2 119 120 123 124 xv About the Authors Risa Palm is the author of 14 books and monographs as well as numerous scholarly articles and invited book chapters. Among her previous books are textbooks for introductory human geography courses (An Invitation to Geography, McGraw-Hill, 2 editions), upper division courses in American cities (Geography of American Cities, Oxford University Press), and natural hazards (Natural Hazards: An Integrative Framework for Research and Planning, Johns Hopkins University Press). She has also published three monographs on earthquake hazards with Westview Press (now part of Harper Collins) including Earthquake Insurance: A longitudinal study, Earthquake Insurance in California: Environmental policy and Individual DecisionMaking, and Illusions of Safety: Culture and Earthquake Hazard Response in the US and Japan, and another monograph on earthquake hazards with The University of Chicago Press Geography Research Papers (After a California Earthquake: Attitude and Behavior Change). She has received research honors from the American Association of Geographers and served as president of this association. Toby Bolsen is the author of over 40 scholarly articles and book chapters. His research focuses on the study of political behavior, public opinion formation, political communication, experimental methods, and US energy and climate policy. He has published research in numerous high-impact journals such as the American Journal of Political Science, Political Behavior, Public Opinion Quarterly, Journal of Communication, Political Communication, Climatic Change, Science Communication, Energy Policy, Environmental Communication, and many other outlets. He has received several best paper awards for published work presented at academic conferences. xvii