Flooding due to climate change-related sea level rising, the erosion of natural barriers and long-periods of rain pose substantial economic risks to Florida, particularly to the value of FloridaSouth real estate, according to two new reports released last week.
For years, Florida lawmakers mostly ignored climate change under then-Gov. Rick Scott, who is now a U.S. Senator. But GOP Gov. Ron DeSantis has taken a more aggressive stance at tackling the issue, although environmentalists want him to do more.
Based on past trends, losses from flooding in Florida could devalue vulnerable homes by $30 billion to $80 billion, or about 15% to 35%, by 2050, according to a report from McKinsey Global Institute.
Average annual losses for residential real estate due to storm surge from hurricanes amount to $2 billion today, but that projection could increase to about $3 billion to $4.5 billion by 2050, the McKinsey report said.
“Flooding in Florida could not only damage housing but also raise insurance costs, affect property values of exposed homes, and in turn reduce property tax revenues for communities,” the McKinsey report said.
Furthermore, the impact of a 100-year-storm event could be even more devastating over time, going from $35 billion today to between $50 billion and $75 billion by 2050, the McKinsey report said.
A separate report from the climate-risk analytics firm Jupiter Intelligence said the percentage of vulnerable oceanfront properties affected by extreme flooding will rise in Miami-Dade County from 5% in 2019 to 98% by 2050.
By 2050, annual flooding damage county-wide in Miami-Dade County is expected to roughly double, leading to shortages in affordable insurance coverage
source: INSURANCE JOURNAL
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