Coastal Real Estate Challenges

‍Fifth Wall Newsletter: https://mailchi.mp/fifthwall/solving-challenges-for-coastal-real-estate 

Buyouts for coastal properties: Two beach front properties sold in North Carolina for $700,000. The buyer? It was the National Park Service. The plan is to tear down the homes and turn the land into a public access beach, the Washington Post reports. The two homes were made unlivable by erosion and sea level rise—a common problem for many coastal properties across the United States.

• What isn't so common is having the federal government purchase the properties just to tear them down. Homeowners are usually faced with the grim options of losing their homes or spending a fortune to move them.
• The NPS used money from the Land and Water Conservation Fund for the buyout, which was appropriate in this case, because the removal of the homes made the beach safer for both people and wildlife.
  

Why it matters: State or federal buyouts for the two homes described above are far and few between. So having a successful case like this can serves as an important model for others to follow, said one professor who studies developed shorelines. This kind of creative financing can offer another option for real estate owners already facing a worst-case scenario.

Bigger picture: Even with all the risks, more Americans are moving into homes that face high climate risk, according to a Brookings Institute study.

• The pandemic had a hand in accelerating this—pushing people away from dense, expensive housing markets and into places like coastal Florida or suburban Phoenix.

Even so: Cities have already started to reject development proposed for areas prone to flooding, wildfires, and other extreme weather.

• And there are plenty of preventative measures being tested like incorporating climate risk into mortgage pricing, subsidizing development in low-risk areas, or adopting stricter building codes.