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“Climate Gentrification” Could Add Value To Elevation In Real Estate

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Homes at higher elevations in Miami are gaining value at a faster clip than those closer to sea level.

It’s an accelerating trend, and it has residents and real estate agents — in Miami and other coastal communities — asking whether “climate gentrification” has arrived. The term, which only recently entered the lexicon, describes the role of climate change in recalibrating land values, a phenomenon that ultimately could displace low-income and minority residents in a similar fashion as urban gentrification. As sea levels rise and flooding persists, the thinking goes in the case of Miami, waterfront property will lose some of its luster and higher-situated neighborhoods like Little Haiti and Little Havana will become more attractive.

The professor who was first to publish research using the phrase “climate gentrification” isn’t convinced that’s the main culprit in Miami. At least not yet. Jesse M. Keenan, a researcher on urban development and climate adaptation at Harvard’s Graduate School of Design, tracked the rate of price appreciation since 1971 for more than 250,000 residential properties in Miami-Dade County, and compared those figures to elevation. Keenan found that properties at high elevations have long appreciated faster in Miami, mostly because of nonclimate factors.

However, since 2000, the correlation between elevation and price appreciation has grown stronger, which Keenan, in an interview with CBS MoneyWatch, suggested may be “early signaling” of preference for properties at higher elevations and a reaction to persistent nuisance flooding in lower areas.

His prediction: Over the next 10 years, climate change will become a more significant factor in the real estate market for many cities. He expects a “slow burn” toward a tipping point — similar to the foreclosure crisis — when all of a sudden values drop precipitously for high-risk properties.

“This is real,” Keenan said. “There are actual people spending lots of money thinking about how to make money from climate change. We have to come to terms with this sooner than later.”

Keenan tracks at least three “pathways” to climate gentrification, and the variations stem in part from the “location, location, location” mantra of real estate. The three scenarios:

  • Low-risk properties surge in value, fueling a migration from high-exposure areas, causing displacement. This isn’t just a sea-level issue: California’s wildfires, for instance, are likely to lead to significant changes in how real estate is valued. “Anything related to climate change,” Keenan explained. “Low exposure is the determinate.”
  • Living in high-exposure areas gets so expensive (think taxes, insurance, etc) that only rich people can live there, pushing historically mixed-income areas (such as Miami Beach, Florida, and Hampton Roads, Virginia) to become more exclusive.
  • Government investments in resilience have the unintended consequence of boosting land and property values that wind up displacing populations. Sea-level fortifications on the Lower East Side of Manhattan could have this affect, Keenan said.

What’s at stake?

“People’s lives, their livelihoods and their culture,” said Mustafa Santiago Ali, senior vice president of climate, environmental justice and community revitalization for the Hip Hop Caucus, a nonprofit that connects the Hip Hop community to civic life.

Ali, who previously spent 24 years in various roles at the Environmental Protection Agency, said it’s fairly easy to predict who the winners will be as climate gentrification takes hold — led both by one-time events such as hurricanes and the more gradual process of sea-level rise. The answer, of course, is wealthier people.

“Who has the resources? Who has the access?” Ali asked in an interview with MoneyWatch. “Who has the education to understand what’s coming and navigate that?”

One key to ensuring a more equitable outcome is making sure communities are heard, are involved in development, including “adaptation” measures to accommodate climate change, and have avenues to take advantage of rising property values, Ali said. In fact, climate will be a focus area of a new initiative of the Hip Hop Caucus set for launch in spring that targets vulnerable communities.

In Miami, residents of some inland coastal neighborhoods that sit at comparatively high elevations, including Little Haiti, worry that rising property values fueled by sea-level increases could price them out, as PRI reported last week.

Developers have proposed three new projects in the Little Haiti neighborhood that could push immigrants and people of color out, activist Valencia Gunder told PRI.

“In Miami, historically because of racism, redlining and segregation, all of the brown and black people were forced to live in the center of the city, which also happens to be the high elevated areas,” she told PRI. “So, they pushed us here because they didn’t want us on the beach.”

For some buyers these days, the beach looks like a better place to visit than to live. And it’s not just coastal areas that could face consequences of “climate gentrification.” Coastal residents are likely to flock to inland cities in droves — with Austin, Texas; Orlando, Florida; and Atlanta likely to gain the most new residents, according to a study by Mathew Hauer published by the journal Nature in April.

The study, which considers a sea-level rise of about six feet by the year 2100, forecasts a migration of as many as 13 million people (double the total of the Great Migration), with more than 2.5 million fleeing the region that includes Miami, Fort Lauderdale and West Palm Beach. New Orleans would lose about 500,000 people, the study predicts, and the New York City area would lose 50,000 people.

That doesn’t mean coastal areas would empty out. History shows people will always want to live near the water, noted Joel Myers, founder and president of commercial weather service AccuWeather Inc.

Sea levels have been rising for thousands of years, he added, and even as that rise accelerates, the other side of the coin is there’s less waterfront land available to purchase. A simple formula of supply and demand.

Click here to view the CBS MoneyWatch video ‘Climate Gentrification Could Add Value To Elevation In Real Estate’

 

Source: CBS News

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Experts: Miami Beach Property Values May Fall As Sea Levels Rise

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Rising Sea Levels

Parts of Miami Beach could be inundated with flood waters in as little as 15 years, and property values may slide amid the rising tide, according to nearly two dozen university heads and climate change experts who were on hand to answer questions on the effects of sea-level rise on South Florida during a Miami Beach Chamber of Commerce event at the W Hotel.

Flooding in Miami Beach

Flooding in Miami Beach

The purpose of the recent event, organized by land use and environmental attorney Wayne Pathman, was to warn business owners, developers, and contractors that the effects of sea-level rise will be impacting the property values fairly soon. Already, media around the globe are publicizing the fact that South Florida is “ground zero” for the adverse economic impact of sea-level rise, Pathman argued. Unfortunately, the region is still behind in preparing its infrastructure for the future.

“All eyes are upon us and South Florida isn’t ready,” said Pathman, co-founder of the Downtown Miami-based law firm of Pathman Lewis LLP and future chairman of the Miami Beach Chamber of Commerce.

Thanks to a slowing gulfstream, warming oceans, and ice flows submerging beneath the ocean from Greenland and Antarctica, the oceans are rising faster than ever, said Keren Bolter, research coordinator for Florida Atlantic University Center for the Environmental Studies. This has caused an increase in flooding events in recent years and it will only get worse. By 2100, the oceans are projected to increase by seven feet, Bolter added. At that level, The Keys, along with large chunks of Miami-Dade and Broward counties, will be inundated with sea water at high tide, destroying fresh water reserves, compromising underground sewage lines and septic tanks, and creating a host of other problems.

But you don’t have to wait 84-years to see the adverse effects of sea-level rise. Bolter said that in as little as 15 years, flooding in Belle Isle will grow much worse, especially at Island Terrace, a 16-story condo built in 1967. “It’s coming up not just at the sides,” she said while showing Lidar maps depicting future sea-level rise at Island Terrace and Belle Isle.

“It comes up from underground. That’s partly because the limestone that South Florida land is predominately made of us is extremely porous. Because of this, not even sea walls will stop the flow of water,” Bolter said.  “By 2060 the oceans are projected to rise by two feet. At that level, “the western half of Miami Beach is under water.”

“As the oceans rise, the cost of insurance will skyrocket,” Pathman said.  “Meanwhile, in an attempt to cope with the new reality, community leaders will raise taxes while property taxes are declining. As for the infrastructure of future residential and commercial projects, Miami Mayor Tomas Regalado recently declared on a radio show that the financial burden will fall on developers. However, at least some of the negative impacts of sea level rise can be mitigated if the business community takes a leadership role now. Many places around the world have already started adapting.”

Among the invited guests at the chamber event were Florida International University President Mark Rosenberg, Florida Atlantic University President John Kelly, and University of Miami’s Rosenstiel School of Marine and Atmospheric Science Dean Roni Avissar. They argued that their respective colleges are already training scientists and engineers who are not only studying the future effects of climate change, but also figuring out solutions on how communities like South Florida can adapt.

“We are very fortunate that we have a strong university system and a strong system of public education,” argued Matthew Welker, principal of MAST Academy at Florida International University’s Biscayne Bay campus. “That’s a very valuable resource.”

Josh Sawislak, global director of resilience for the Los Angeles-based engineering firm AECOM, said Miami could even replace Amsterdam as the true innovator of anti-flooding solutions.

“The brand can be, ‘This is a resilient city… Don’t go to Amsterdam to see how to prevent from being cut off by the sea, although they’ve got tasty cheeses. Come to Miami and see how to live with water,’” Sawislak declared.

One innovative idea has already been hatched in Miami. Rather than fight sea level rise, Bolter of FAU pointed out that “one student from the University of Miami” came up with the idea of simply making western Miami Beach “floodable” with the creation of new bays and living shorelines along with new boardwalks and flood-adapted buildings. (The UM student in question who developed that plan is Isaac Stein, who now works for the urban planning and landscape firm West 8.)

Besides speeches from experts, the event included an hour-long breakout session where business leaders sat at tables and asked questions to the assembled experts, some of whom flew in from other parts of the country to be there. The media, however, was ushered away from the session. Upon hearing that reporters were even present at the event, Donald Kipnis, founder and CEO of Brickell-based Development Service Solutions, walked out. Dozens of other chamber members left before the session even ended.

Harold Wanless, chair of the Department of Geological Sciences at the University of Miami, didn’t think the breakout session was long enough. Experts barely had 10 minutes to answer business leaders’ questions or lay out what needs to be done.

“We need to be planning, that is the bottom line,” said Wanless, who has long studied past sea-level rise events in Florida.

Following the breakout session, Jessica Goldman Srebnick, CEO of Goldman Properties, applauded the panel’s efforts. She also urged some restraint. Showing slides that show Miami Beach being submerged is what “gets picked up by the news.”

“We have to be very… strategic about how we discuss the reality of sea level rise,” Goldman said.

Pathman said the purpose of the event was just to “whet everyone’s appetite.” On September 14, the chamber plans to hold a roundtable discussion with “leading political and civic leaders about current and future strategies for sea level rise in South Florida” at a location to be announced.

 

Source: The Real Deal

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Miami Has A $10 Million Plan To Reopen Toxic Parks

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It began with lead and arsenic in the soil at a small Coconut Grove dog park. Then elevated levels of barium and copper beneath a sloping lawn near residential Coral Gables. Followed by antimony and iron around the playing courts of Douglas Park.

One by one, the city of Miami shut down a series of parks starting last September after tests showed elevated levels of toxins in the soil. The closures alarmed residents and embarrassed city officials, who’d known for years about contamination concerns linked to an old West Grove incinerator.

All 112 of Miami’s parks were tested, and portions or all of seven closed for clean-up. One year later, the city is prepared to spend an estimated $11 million — more than triple initial projections — to remediate and reopen the tainted parks. Their plan is simple, though to some disconcerting: leave the contaminated soil in place and bury it two feet below the surface. “This two-foot option is not only an option we’re applying at all our parks, it’s the option that the county applies itself at their parks that get remediated,” said Deputy City Manager Alice Bravo. “This is the standard in South Florida.”

Under the plan, two feet of clean fill will be placed over contaminated soil. If the fill is less than two feet thick, a liner is also spread between the soil and the clean fill, explained Wilbur Mayorga, chief of the county’s Division of Environmental Monitoring and Restoration. New grass, artificial turf or recycled rubber mulch or mats top the fill, although those options are purely aesthetic, he said. Plans can vary from park to park, depending on the terrain and type of structures in place. “The approach is not new,” Mayorga said, explaining that both federal and state environmental rules allow clean-up methods that “rely on a cap or a barrier to eliminate any exposure to contaminated soil.”

Some parks, like Blanche Park, a small neighborhood park popular with tots and dogs, and Curtis Park, a much larger sprawling sports complex north of the Miami River, will have wells to monitor groundwater and ensure contamination doesn’t spread. At Merrie Christmas Park on South LeJeune Road in Coconut Grove, the city plans to move between a foot and two feet of contaminated soil from one area to another to level the park according to new design plans, Mayorga said.

Working with county regulators, the city has to continue to conduct inspections of the parks after reopening them. Covenants will also be attached to the land to warn future generations of the contamination, Mayorga said. “But at the end of the day, all contaminated soil in the park will have the required and approved engineering controls on top,” he said.

To date, the city has reopened only Blanche Park and has had its plans approved by the county for Merrie Christmas Park, half of which is still closed. Plans for Curtis, Douglas, Billie Rolle, Southside and Bayfront parks still need the county’s approval. But the city has surveyed the extent of the contamination at most parks, perhaps marking the end of a long period of uncertainty about the city’s problems.

Concerns about toxins and contamination first arose in 2011, when the city discovered contaminated soil at a firefighter training facility located at an old, defunct Jefferson Street incinerator dubbed Old Smokey by residents in the West Grove. County regulators ordered the city to find out exactly what was polluting the soil and address it, but it took two years to issue a report, which showed elevated levels of arsenic and other heavy metals like barium and lead. Even then, the contamination only became public knowledge after a University of Miami graduate student stumbled upon it.

Under intensified scrutiny from the university, residents and county regulators, Miami officials began sampling soils in a one-mile radius. When contaminants were discovered at nearby Blanche Park and then Merrie Christmas Park, the county ordered the city to test all its parks, setting off the discovery of five other contaminated sites.

The city’s slow response has fostered cynicism from residents near the parks and activists, who continue to distrust Miami’s handling of the matter. A group of residents around Merrie Christmas Park is protesting plans to redistribute some of the toxic soil beneath the park’s surface, and say they only learned about the details from the city’s contractor.

Anthony Alfieri, a UM law professor whose Environmental Justice Project unearthed contamination concerns, said the city continues to keep residents in the dark about its plans and actions. The city, by designating its contaminated parks as “Brownfields” this July in order to receive reimbursement from the federal government for clean-up efforts, increased its obligation to seek public input. But Alfieri said it doesn’t appear the city has done any outreach. “The city and the county are clearly committed to a policy of non-accountability,” Alfieri said. “And they ensure that by failing to reach out to the community and inform the community.”

Ken Russell, a woodcarver who lives next to Merrie Christmas Park, has loudly criticized the city’s plan and says he worries about the health of his three children, ages 12, 2 and 5 months. He says he understands that capping toxic soil is safe but is frustrated that the city’s plans will move contaminated material from the western edge of the park to some depressed areas that are currently closed off to the public but apparently untainted.

Another issue for Russell is the county has marked his home as being located within a quarter-mile of a contamination site, which he and other neighbors worry lowers their property values. He said if the city is digging up soil, it ought to simply remove it. “The city did this dumping. Even though it was 50 years ago, it’s their doing and it’s their responsibility to clean it up,” he said. “We want a clean-up, not a cover-up.”

Bravo stressed that the city’s plans are safe and sound, and she said the cost of removing toxic soils is simply too steep. Bravo said estimates put the price of removing soil at Merrie Christmas Park at $3million, though the city isn’t sure about the depth of the tainted soil.

By designating six closed parks as Brownfields — Blanche Park, the first to close, was reopened months ago — the city can apply for reimbursement of expenses up to $500,000 for each park. The city is also hoping that dredge from the port tunnel dig can be used as fill if it’s left over from a bond-funded project at Virginia Key. But even then, the final price tag for clean-up could be in the millions, and Bravo said the city doesn’t have the money to remove the tainted soil. “When this material is removed it has to be taken to a certain dump site approved by the county,” said Bravo. “The disposal is very expensive.”

Russell has in recent weeks gone back and forth with Commissioner Marc Sarnoff over the city’s plans. Sarnoff, who lives across the street from Blanche Park, defended the city’s handling of the closed parks. He said he has talked at least a dozen times with homeowners groups about what the city is doing to address clean-up issues, and said the city held two public hearings with scientists in attendance to answer questions when concerns were first raised.

Sarnoff said he understands fretting about real estate values — his home is also marked as being next to a contaminated site — but believes they’re overblown. He and Bravo say the city has done its best to publicize the issue, but are trying to schedule another meeting to explain what’s happening with its closed parks. “I guess you can always do more,” said Sarnoff. “But is the city doing the job it should be doing? In my estimation it’s doing a credible job.”

The Parks

Blanche Park, 3045 Shipping Ave.: The neighborhood playground and dog park remained open after contaminated soil was found in September 2013 because it was almost entirely covered with astro turf. Workers paved a parking area and installed monitoring wells to test groundwater, although no drinking wells are in the neighborhood. Total Cost: $700,000.

Merrie Christmas Park, South Le Jeune Road and Barbarossa Avenue: City workers reopened part of the park in February. Clean-up plans now underway call for digging up a foot to two feet of contaminated soil in the western half of the park where toxic metals are concentrated and using the soil to regrade part of the bowl-shaped park under new design plans. The city also plans to excavate contaminated soil around trees and install rubber mulch and lay recycled rubber mats on playground areas. Any area with contaminated soil will be covered with a liner or two feet of clean fill. Projected Cost: $1.5million.

Curtis Park, 1901 NW 24th Ave.: The city reopened part of the large sports complex, including basketball courts, in June, but has kept areas where contaminated soil is exposed fenced. A clean-up plan was due Sept.17, but has not yet been submitted. Estimated Cost: $4million.

Douglas Park, 2795 SW 37th Ave.: The third park closed after contamination was found at Blanche and Merrie Christmas, the 10-acre park near Coral Gables had high levels of toxic metals from ash in two areas. The city, which will discuss funding clean-up efforts at the park Monday, must submit clean-up plans to the county by Oct.5. The city must also test soil off site to determine the extent of contamination. Projected Cost: $3.5million.

Billy Rolle Domino Park, 3400 Grand Ave.: A neighborhood hangout with shady domino tables, the city is considering installing a liner and new soil as well as a monitoring well. A plan for the clean-up is due Sept.30. Estimated Cost: $250,000.

Southside Park, 100 SW 11th St.: A pocket park near downtown, the city still needs to finish mapping the boundaries of the contamination. A clean-up plan is due Sept.30. Estimated Cost: $1million.

Bayfront Park, 301 Biscayne Blvd.: Part of the downtown park remains fenced, but addressing contamination in the park may be complicated by its terraced design. A clean-up plan is due Oct.6. No cost estimate available.

 

Source: Miami Herald

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