Harvey flooded Houston, but it is likely to put America’s entire real estate market in turmoil. In an article by Richard Luscombe in The Guardian, he reports on the trend that factors in “environmental threats and climate change to land and property values [which] looks certain to become the standard nationwide as Houston begins to mop up from the misery of Harvey.”
Millions of property owners in both coastal and low-lying areas will be faced with a difficult reassessment of risk, and of cost-benefit. Hurricane Katrina and Super Storm Sandy may have been shrugged off as anomalies, once-in-a-century perfect storms, but Harvey, the third recent mega storm, establishes a pattern. It sets the new normal. It forces a reevaluation. For sure, insurance companies will alter their risk-assessment models to incorporate the new reality. Then they will revise their rates, the premiums they charge property-owners for providing flood insurance. Sharply higher rates will force many property-owners to face difficult choices: stay or go, pay or pray, rebuild or relocate? Towns and cities will face similar decisions: How much adaptation and mitigation can we afford? How much can we raise taxes? Can this or that neighborhood be saved? Lower-lying areas will deteriorate, won’t be rebuilt quickly if ever, higher-altitude areas will gentrify, gain in value. Legislatures at state and federal levels will have to reform flood insurance programs, tightening coverage requirements and enforcement mechanisms. People’s outcries will be deafening, the anguish and pain will be real. As usual, the poor will pay the most, but so widespread will be the effects of the great-real-estate-new-reality-check, that politicians will have to pass reforms. A vast reshuffling of property values, of living patterns, and to some extent, political power, will all flow from Harvey, a slow-moving wave that will take years to ripple through America. Post-Harvey America will be much more climate-change-aware and climate-attuned, safer, saner, re-urbanized, still stratified, but a little less unequal and a little more community-oriented. Thanks, Harvey.