South Florida Real Estate Boom Not Dampened By Sea Level Rise

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While Florida was hit by flooding this year, it hasn’t impacted the industry as hard as previously predicted.

 

For many businesses around the United States, especially those in the coastal areas, this time of the year can be quite challenging.

According to experts, this year’s hurricane season can be a sneak peek of the future. Scientists believe that the world is most likely to experience stronger hurricanes and heavier rains in the next few years. With ice sheets melting and sea levels rising faster than anyone can imagine, floods in low-lying areas, such as cities like Miami and the rest of South Florida, will become commonplace.

In South Florida, where it is warm and humid during most of the year, the alarming news of rising sea levels and more powerful storms does not do much to bring its booming real estate industry down.

While leading a group of 20 tourists and potential condo buyers past luxury high-rise condominium towers, Peter Zalewski, real estate consultant and bus tour operator says, “Right-hand side, we have the Bond at Brickell. Left-hand side, we have the 1100 Millicento.  Straight ahead where you see cranes, we have the Brickell Flatiron.”

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Despite the recent downturn of Miami’s condo industry, which is mostly because of President Trump’s immigration policies that have made foreign investors uncertain about the market, according to Zalewski, the market is still quite hot.

In Miami alone, around 20,000 condominium units are in various stages of completion.

Zalewski shows potential buyers various investment opportunities around the metropolis. He tours the group into Brickell, a financial district and one of Miami’s hottest neighborhoods.

He says, “You’re going to have about 6,000 units right here on this street.”

“That’s why I call this the belly of the beast.”

As the tour bus takes the visitors and potential condo buyers around, Zalewski also discusses market conditions, property taxes, and maintenance fees. But he doesn’t delve on the topic about the potential increase in flooding in the city.

Michael Montalvan, a property manager to foreign investors and one of the people in the group led by Zalewski, said it’s not something that a client has ever brought up to him.

“For people who come invest in a condo, they really don’t care,” he says. “You know, I’ve never seen an investor come talk to me about it at all.”

Zalewski says a lot of the foreigners who come to Miami to invest in condo units aren’t thinking about what the city would look like in 40 years’ time.

He says, “Chances are, they’re not going to be in here long-term. Basically, they’re looking to invest their money, look for a little uptick in the pricing and then dump it, take the profit and move on to the next play.”

But for residents in South Florida, the increase in sea level is hard to brush under the rug.

In Miami alone, a few neighborhoods experienced more flood on a regular basis, especially when there is a new or full moon during a high tide or what they call king tides. This does not include unfortunate events brought about by heavy rainstorms and hurricanes.

The storm surge during Hurricane Irma in 2005 caused great flooding in Brickell, which is the neighborhood at the heart of Miami’s condo boom. Thankfully, the city’s stringent building codes and elevation requirements, there was no substantial damage when the storm surge hit.

Jane Gilbert, Miami’s Chief Resilience Officer said, “What was most impressive about Brickell was how quickly it drained and people were back in business.”

“Two days later I was walking down Brickell and I could have just hung out on the street at a table at a café and enjoyed my cafecito.”

The local government of Florida predicted a rise in sea level by as much as two feet by 2060.

The city of Miami continues to take the necessary steps to protect its neighborhoods from regular flooding. One of the last projects of Tomas Regalado, who just completed two terms as Miami mayor, was to complete a referendum that will allocate $200 million for flood protection and preparation for sea level rise, including additional pumps and stronger seawall structure.

Resilience Officer Jane Gilbert says that building a stormwater master plan that is resilient and would last until 2060 can be expensive but will be done as it becomes necessary.

Gilbert says “If you’re already resilient to something that’s going to be a foot, you’re probably OK for a good 25 years over time… The sea is rising and it is rising at an increasing rate. But it’s still rising at a relatively slow rate. So there’s time for planning.”

 

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