Regardless of its causes, climate change poses real problems for Florida businesses. When it comes to sea level rise, Miami is the 9th most at-risk city in the world. (Source: OECD)
The cost of keeping the iconic south Florida city above water is expensive. Flood-prone Alton Road in Miami Beach is currently undergoing a $400 million renovation. The Guardian reports that a total of about $1.5 billion will be invested in flood-prevention measures city-wide.
According to FEMA, the effects of climate change include more intense storms, frequent heavy precipitation, heat waves, drought, extreme flooding, and higher sea levels. “The challenges posed by climate change… could significantly alter the types and magnitudes of hazards faced by communities,” states FEMA’s website. Elevation Certificates are one way that FEMA assesses flood risks.
When should we start to worry?
Attorney Boyer predicts issues with insurance coverage, property damage and less bank lending. Flood insurance will become mandatory to receive a mortgage on at-risk areas, if it isn’t already. However, the cost of that insurance will be greatly inflated due to the likelihood of water damage. Without insurance, banks will refuse to give loans for these properties. Thus, property taxes will plummet in these areas, leaving the owners of these buildings stuck with an unsellable, depreciating asset.
Biscayne Bay and the Everglades also pose unique flooding problems.
Don’t rely on your average real estate agent to keep your long-term security in mind. They just want to receive commission and get rid of the property as fast as possible. Before making a real estate purchase in coastal areas of south Florida, be sure to consider the building’s elevation.
Boyer Law Firm, P.L. offers advising on commercial real estate issues like new construction, building improvements, lease negotiation/agreements, and more. Contact us here.