Billions in Hamptons Real Estate at Risk on Shore
A recent study of the impact of sea level rise on coastal communities in the continental United States predicted that, by the year 2045, billions of dollars of East End real estate will be at risk of severe flooding. The report, conducted by the Union of Concerned Scientists, a nonprofit science-advocacy group, laid out a dire domino-effect of repercussions that could befall at-risk regions, envisioning “persistent high-tide flooding of homes, yards, roads, and business districts” that would lead to “effectively unlivable” neighborhoods.
“The long-term risk of sea level rise has been flying under the radar and we wanted to make homeowners and communities aware of it,” said Kristina Dahl, a senior climate scientist with the Union of Concerned Scientists. “We are also advocating for a change in policies at the local, state, and national levels.”
The authors of the report based their research on three sea level rise scenarios of varying degrees of severity that were developed for the federal government’s 2014 National Climate Assessment. They localized the data, including results from a 2017 survey of areas prone to chronic flooding, and applied property values amassed by Zillow, the online real estate database, to their findings.
In Southampton Town, they found that, in the most extreme scenario — one that assumes a continued increase in carbon emissions, ongoing loss of the Antarctic ice sheet due to global warming, and sea level rise of two feet — more than $3.5 billion worth of property would be in danger of chronic flooding by 2045. The real estate loss estimates in East Hampton Town, however, were, surprisingly, far lower, amounting to just over $2 million within the same time frame.
Addressing the discrepancy, Ms. Dahl said that the group’s research found far fewer houses at risk in East Hampton Town than in Southampton Town, but she added that since the study was national in scope, errors in local home pricing or chronic flood risk were possible.
The report’s projected amount of real estate loss in East Hampton Town seemed particularly egregious in comparison to a 2017 survey, conducted as part of the town’s coastal assessment resiliency plan, which foresaw much more high-value damage. In that study, a firm of engineers and scientists assessed the market value of East Hampton Town properties at risk from sea level rise and storm surges. Its findings showed that sea level rise will have a greater impact on bayside properties, including areas such as Accabonac Harbor, Northwest Harbor, and the north side of Lake Montauk. The estimated market value of real estate at risk along the shoreline of Gardiner’s Bay in Springs, for example, came to $538 million; for the north of Lake Montauk it was $493 million.
In terms of storm surge damage, the firm’s data showed that East Hampton Village and Napeague “have the highest exposed dollar value, both in the short term and over the next 50 to 60 years.” The value of such properties along the shore in East Hampton Village was estimated at $1.5 billion, and along Napeague it was $2.1 billion.
The analysis was based on projections adopted by the New York State Department of Environmental Conservation, which, using the most extreme forecast, estimated that sea level would rise two and a half feet by 2050 and six feet by 2100.
Kim Shaw, the town’s director of natural resources, said that a second phase of the study will begin this fall. “We’ve retained another engineering firm to wrap up the rest of the report,” she said, adding that the town is pondering what code changes need to be made in order to mitigate damage from sea level rise. “We’re looking to other coast states to see how they’re dealing with the issue and what we can implement,” she said.
Earlier this year, the consultants who conducted the recent hamlet studies for East Hampton Town recommended that Montauk undergo a coastal retreat by relocating downtown shorefront businesses further inland.
The report by the Union of Concerned Scientists warns that an increasing number of properties prone to chronic flooding could have a devastating effect on an at-risk region’s real estate market. A housing market crash could emerge, it says, and unlike with previous crashes, after which home prices ultimately rebounded, “properties chronically inundated by rising seas” will continue to decrease in value.
The availability of insurance currently provides a hedge against buying a house in danger of flooding. “I don’t think people are going to stop buying waterfront property as long as they get flood insurance,” said AnnMarie Pallister, vice president and East End liaison of the Long Island Board of Realtors, as well as an agent with Douglas Elliman.
Likewise, mortgage lenders rely on insurance to offset their risk. “A mortgage company doesn’t care if you buy a house on the water or in the water as long as you’ve got flood insurance,” said William Wright, an owner of the Par East Mortgage Company.
Ms. Dahl cautioned, however, that an increase in chronic flooding could lead to high-cost insurance premiums, and pointed out that the Federal Emergency Management Agency, which creates the maps on which flood insurance is based, is not currently providing home buyers with all the information they need to make a sound investment decision. “They’re not figuring sea level rise into their flood maps, which is very meaningful when you have a 30-year mortgage,” she said.
Laying out the worst-case scenario for the housing market, the Union of Concerned Scientists’ study posits that as chronic flooding worsens, “homeowners will begin to find themselves with mortgages that exceed the value of their homes.” Finding themselves stuck with houses that are unlivable and difficult to insure, it says, could lead owners to simply abandon the houses.
Even those who are not homeowners could be affected by the crisis, the report states, as a diminishing property tax base could lead to a reduction in funding for a community’s public schools, emergency services, and infrastructure repair.
In addition to raising awareness, “we’re encouraging people to put pressure on elected officials to get FEMA to update the flood insurance maps to incorporate sea level rise,” said Ms. Dahl. “When the risks are known, communities can have conversations about their options and what it means to live on the water.”