Climate change and sea level rising have had huge impacts on coastal cities across the United States. Everywhere from the tip of Texas up to New Jersey have felt the effects of increased storm intensity, rising tides, erosion, and issues with sewer systems. Damage from hurricanes alone over the past 40 years is $997.3 billion. Anything that comes with that high of a price tag is serious business.
While Miami's real estate market is on fire, its longtime battle with flooding has threatened the future of the city. That's why the U.S. Army Corps of Engineers is doing a feasibility study to help buffer and protect Miami from the flooding, sea level rise, and storm damage that is slowly seeping into the city. Find out how the wall might impact real estate in Miami with this gargantuan project proposal.
The sea wall proposal
The U.S. Army Corps of Engineers just released their proposal to mitigate water issues in Miami, and it was not greeted with anything close to enthusiasm. After research, public input, and feasibility studies, they announced their proposal to build a massive seawall that will run through the city, neighborhoods, and Biscayne Bay.
The sea wall is estimated to cost $6 billion, and construction wouldn't start until 2026 at the earliest. Although the wall, which could be up to 20 feet high in certain places, will be beautified, it will literally be cutting neighborhoods in half and running directly along the waterfront, ruining a huge draw to businesses and real estate along the water.
How will the wall affect real estate?
Real estate investors, real estate agents, and businesses are upset about the impacts the proposed wall could have. Home values will likely dip, even with the proposed lifting of a portion of the affected houses.
This brings up another sticking point: There is concern that lifting will only go toward higher-value real estate, leaving those in less privileged neighborhoods with less protection or homes that decrease in value. And without the picturesque views of the waterfront or beaches, many of the shops, restaurants, and bars will get less foot traffic.
When people are looking for a view of white, sandy beaches with palm trees and instead are faced with a wall, that's just not going to cut it. Environmentalists are also up in arms about the ecological impact of cutting off Biscayne Bay and other surge barriers in various waterways.
How will it play out?
The public has indicated that they would rather see less obtrusive options, such as fortifying sewer plants and emergency service buildings or installing surge barriers around the major waterways. The city could also potentially elevate the businesses and houses that would most likely be impacted.
Additionally, planting mangroves, reestablishing sand dunes, and growing coral reefs would not only help naturally reduce erosion and storm surge but would also have additional environmental benefits and eco-tourism opportunities.
None of these solutions are foolproof, and all of them are incredibly costly. But when the average cost of a single hurricane event is around $19.2 billion and the real estate the sea wall is proposed to protect is valued at around $40 billion, it will really just be a matter of paying it forward -- hopefully with less devastation than would currently occur. The current sea wall proposal at $6 billion seems like chump change in comparison.
That number only takes into account the construction, not the secondary costs associated with decreased home values and less desirable commercial businesses. Whatever is decided, there will be impacts within the real estate market, so keeping an eye on the project is well worth investors' time.