Housing Market Impairment from Future Sea-level Rise Inundation

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RWP 20-05, July 2020; updated November 2011

The rate of future global sea-level rise will likely increase due to elevated ocean temperatures and land-ice loss. Coastal properties are expected to become more prone to coastal flooding in coming decades due to relative sea-level rise caused by both global and local factors. Translating sea-level rise projections into lost physical and economic value is critical for companies, governments, and regulators. We use probability distributions of local sea-level rise projections, National Oceanic and Atmospheric Administration (NOAA) coastal digital elevation models, and CoreLogic housing data to estimate the timing of future sea-level rise inundation and a range of housing market impairments in four U.S. coastal cities (Atlantic City, NJ; Miami, FL; Galveston, TX; and Newport - San Pedro, CA) for a series of climate scenarios. We implement a novel methodology, refining estimates for the timing for future inundation, considering both housing properties' elevation above the tidal datum (Mean Higher High Water -- MHHW) and hydrologic connectivity to the ocean -- a critical consideration where natural or human-built features alter the relationship between sea levels and inundation. The unique risk factors in our four cities (housing market, topography, and local sea-level) illustrate how our methods are applicable across geographies and scales of observation. Our results provide an important perspective on the timing of future losses, the associated uncertainty, and highlight positive (high-skewed) asymmetry of risk from sea-level rise inundation. This information can aid planners, policy makers, and investors, in cost-benefit decision-making related to mitigation, adaptation, and remediation at the local and national level.

JEL Classification: Q54, R3, D89

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