Tampa and Rising Sea Levels

Tampa, Florida
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Tampa and Rising Sea Levels

Aaron Dixon
New to Real Estate · Bay Area, CA · Member since 2022 · 28 posts · 19 votes

Hey All,

A family friend of mine has instilled the fear of Tampa as a whole being a poor long term investment due to Sea Level Rise (SLR). It seems without a significant investment into preventative measures Tampa and the surrounding area will lose much of its value amongst other things. 

While I bought my first property in Riverview this time last year I’m now hesitant to even continue analyzing properties. Simply looking to get others thoughts on the matter. 

Thanks to all!

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James Hamling
Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
3y
Quote from @Marcus Auerbach:
Quote from @Michael Masters:

Hey Aaron,

My day job is as an actuary.  Specifically, I am a Chief Pricing Actuary which means its my job to manage the team that prices insurance risk.  I do not price based on politics, I price based on facts and hard data.  My company is a specialty insurer, which means we sell policies where others fear to tread.  As you may guess, we do a lot of business covering Florida property.

Follow this link to insured losses since 1970:

https://www.swissre.com/media/...

Look at the left side of the chart then compare it to the right.  Clearly the risk of catastrophe losses has greatly increased and continues to increase.  Even after adjusting for items such as inflation this is clear.  Premiums for Florida are currently blowing up.  Companies are being forced to increase deductibles while paying twice last year's premium.  Those who own individual homes may not see the bite as Florida insurance regulators protect them from such increases, but these additional costs will eventually make their way through to those policies as well.

Count me as one of the few who considers global warming in my real estate purchases.  As an example, the city of Boston put out a report showing which neighborhoods would be impacted by various increases in sea level, I used this to decide which areas to stay away from.  I do this because I have a buy-and-die strategy, which means I hold it until it passes on to the next generation.  If I was only in it for the short term I may not care about these climate changes.

Again, I couldn't care less about the politics, facts are facts.


 here is the chart from your link for everyone to see:


My entire life I have worked in 4 "trades"; Farming, Finance, Real Estate and ENGINEERING. 

In Engineering we have this lovely thing called "Confirmation Bias Fallacy".    A persons sees the $-amount of insured payouts increasing and says "SEE, there it is, PROOF climate change is getting us!". BUT.... that's Confirmation Bias Fallacy. 

As this chart shows the increase in payout since 1981, let me ask how much does renovations costs today vs 1981? Is a roof the same price today as 1981? How has the prices of labor and materials in real market terms adjusted vs cpi? Because JUST doing an inflation adjusted chart does NOT mean it's adjusted against the market price inflation. 

Or how about density? Has density changed since 1981? An area could get the exact same hurricanes as it has for 14,000 years but if you ADD 10,000 properties per year, increasing density, yup, your going to get MORE damage each time. No change in hurricanes, just how many things we are putting in the path of them. 

This 1 chart/data-point alone says NOTHING. One data-point alone can ONLY feed Confirmation Bias Fallacy. 

If we look at data NOT skewed by this factor of us/humans simply putting more things in the area of known hurricane activity (that's all this chart actually says, were are idiots and build in stupid places) like hurrican powers, guess what we see. 

Most powerful hurricanes: 1924, 1932, 1935, 1944, 1955, 1961, 1961, 1969...... Before Climate Change science existed, we had MORE powerful hurricanes. So BY THE DATA it turns out hurricanes are no different over last 100 years. What's different is the stuff we have built in the path of such. And like morons we now want to wail and say it's the climates fault...... 

People 100+ yrs back were just smarter, to not build in those places. If you try putting a shed on a train-tracks who's fault is it when it's repeatedly destroyed? Are we to freak out saying there is an issue with trains hitting sheds? Or with idiots putting shed's on train tracks? 

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  • Jonathan Taylor SmithBusiness Member
    Rental Property Investor · Durham / Raleigh (Triangle), NC · Member since 2015 · 840 posts · 801 votes
    3y

    I never know what to actually think about "global warming", "global cooling", "climate change", "sea level rise", etc... Is it all a hoax? Or are those who think it's a hoax all fools? And memes like this don't help me to know which side to land on...

    Regardless, I love the Tampa Bay area, and it is one of a few places that I target for investment, including desiring beachfront property. And I'm willing to bet that if SLR does put it all under water at some point, there will be any number of COVID style bailout programs coming from the government. But if SLR is a hoax (or just greatly overestimated in impact), then I'll also be good when the areas continue to appreciate, and I own lots of properties there.

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  • Raymond J. RodriguesBusiness Member
    Lender · Miami, FL · Member since 2017 · 1k+ posts · 797 votes
    3y

    I doubt we'll ever see the effects of SLR in our lifetime, in the Tampa Bay area. Just my two cents. 

    [email protected]619-456-8311
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  • Katherine Blazer
    Lender · Tampa/St. Petersburg/Sarasota FL and Knoxville/Sevierville/Maryville, TN · Member since 2018 · 361 posts · 178 votes
    3y

    I am in St Pete. I will tell you that some areas of Tampa see flooding but it's more because of the way the city was originally developed, similar to Charleton, SC. The city is working to correct the issues. I don't see us losing a lot of value because of higher tides as you see in the Outer Banks. You may see a loss of value in missed rental income as those continue to climb in our area. But that is just my opinion. 

    2Reply
  • Stephen Dispensa
    Real Estate Professional · Tampa, FL · Member since 2015 · 176 posts · 252 votes
    3y

    I lived through Hurricane Sandy and the cleanup/redevelopment effort that followed it. I've also now worked in real estate/development/construction in Tampa for the past 6 years. Here's my take:

    I have a hard time taking a lot of the global climate change discussion seriously, because it seems most of the legislation past to combat it conveniently raises the price of fossil fuels. I'm not saying the data is false, but I question the impartiality of the source. 

    However, hurricanes and flooding ARE a real threat. South Tampa is a Peninsula surrounded by Tampa Bay and Hillsborough Bay. In the event a major storm ever got into Tampa Bay, we could see a major floodwater event that would make what just happened in Fort Myers look like childs play. 

    Luckily, the unique geography of Tampa Bay have prevented Tampa from taking a direct hit. Pinellas County was hit directly 100 years ago and the damage was substantial. A hurricane would need to take a VERY specific path to hit Tampa directly. However, any Gulf storm that pushes water into Tampa Bay has the possibility of causing devastating floods. 

    The problem I see in Tampa, is that we are not building high enough in these flood prone areas. After Sandy, NY State and FEMA instituted a program that allowed homeowners to receive pre-storm value for their destroyed homes. These homes were then resold at auction to developers who had to either demolish them and rebuild elevated homes, or actually LIFT the houses on a new foundation. These new foundations needed to be FEMA compliant (rebar reinforced block, flood vents, no living space in the "wet" basement, electrical outlets and wiring raised up, etc.)

    I still firmly believe Tampa to be an excellent investment. However, it will probably take a major storm event to get people to wake up to the dangers of flooding. Most of the housing inventory in South Tampa are single story slab-on-grade homes built in the 1950s. These will all be WRECKED if we ever have major storm flooding. Sad truth is the real money in Tampa won't be made until AFTER that storm hits.

    6Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    3y
    Quote from @Aaron Dixon:

    Hey All,

    A family friend of mine has instilled the fear of Tampa as a whole being a poor long term investment due to Sea Level Rise (SLR). It seems without a significant investment into preventative measures Tampa and the surrounding area will lose much of its value amongst other things. 

    While I bought my first property in Riverview this time last year I’m now hesitant to even continue analyzing properties. Simply looking to get others thoughts on the matter. 

    Thanks to all!

     Your kidding right? Left wing BS, If there really was an issue would the banks be doing 30 year loans? Banks, and Insurance co rule the world, BTW I live on the beach in Jensen , should I be concerned ?

    Good luck 

    10Reply
  • Marcus Auerbach
    Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
    3y

    The answer you get depends on people's ideology. I would say follow the money: private insurance companies are retreating from FL and don't want to offer flood insurance anymore, so the state government is now the biggest insurance provider. The 20ft seawall the Army Corps of Engineering is planning in Biscayne Bay / Miami will cost 4.6B - if it stays on budget. They will have to pull out 4 million septic tanks because they will flat to the surface like bobbers if flooded and pollute the area. Nobody spends this kind of money on a hoax.. 

    It is in human nature to not wanting to believe in unpleasant outlooks - take the 2007 crash. Apparently nobody saw it coming, even though when you look at the chart and at the rate inventory was rising after 2004, you have to wonder if they were blind or just in disbelieve.

    The issue with real estate values is that they are based on perception. Once the first row of houses gets damaged in a storm surge and the second row starts to put up for sale signs you can watch what will happen to prices.

    13Reply
  • Doug Smith
    Lender · Tampa, FL · Member since 2013 · 2k+ posts · 2k+ votes
    3y

    We're full steam ahead in the Tampa market. 

    5Reply
  • Travis TimmonsPro Member
    Rental Property Investor · Ellsworth, ME · Member since 2021 · 1k+ posts · 2k+ votes
    3y

    I don't know and neither does pretty much every individual posting on a real estate forum. I'll give some anecdotal thoughts...being ignorant on a topic clearly does not disqualify one from having an opinion on the internet.

    I live in Houston and own property in Maine...like way up there, basically Canada, Maine. I've seen hotter summers and more violent storms in Houston and a few years in a row of very mild winters in Maine. It's starting to become the norm. Forgive my lack of exact detail here, but something like 3 of the mildest winters on record have happened in the last 4-5 years up there. I don't know what that looks like in 20-30 years, but I feel much better about owning property in New England than in Houston from a climate and flooding perspective. I have no idea if that has any tangible impact on property value, migration patterns, industry, etc., but the trend line is in the direction of unpredictable and instable patterns that, at worst, cause a significant problem, and at best, increase flood risk and insurance costs.

    It's probably a "nothing is ever as good or as bad as people say it is" situation as it is hard to interpret who has an agenda to push and who does not...I wouldn't go so far as to say don't invest in parts of FL or TX on account of it, but it's certainly a thought to keep in mind if you plan on owning property in those areas for another 20+ years. 

    8Reply
  • Scott Mac
    Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes
    3y

    Well, if you decide you want to believe this stuff, you could always by in Denver, or along the Arizona Bay.

    3Reply
  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    3y

    This is the second post on this same subject in a matter of weeks. Must be scare tactics in play...?

    The weather is constantly changing everywhere....the causes are up for debate. I would just do my due diligence as per usual and buy where it makes sense dollar-wise and seems relatively safe (given that there is never a surety of safety).

    Business as usual.....

    2Reply
  • Jim Duncan
    Banker · Tampa, FL · Member since 2023 · 39 posts · 19 votes
    3y

    Being based in Tampa, that's one of those variables I'd put in the "meteor strike" category. Is it possible?  ...sure. Do we understand enough about when, where, and how much it will impact things to make any decisions on it right now? Nope.

    Personally, I'd imagine there are many other cyclical, and short-term macro-economic events between now and then could make you rich or bankrupt in real estate many times over, before the water rises enough to impact your plans.
     

    3Reply
  • Frederick Wenger
    Roofer and handyman · Chicago, IL · Member since 2015 · 13 posts · 7 votes
    3y

    @Aaron Dixon, I saw a clip from Dan Pena addressing this succinctly. He clearly stated that if SLR was an issue, no bank would give penny one to finance a single project. It would be fiduciary suicide.

    3Reply
  • Travis Hatch
    Investor · Denver, CO · Member since 2019 · 41 posts · 17 votes
    3y
    Quote from @Scott Mac:

    Well, if you decide you want to believe this stuff, you could always by in Denver, or along the Arizona Bay.

     @Scott Mac just curious, why Denver / Arizona Bay?

    0Reply
  • Obed Calixte
    Real Estate Agent · St Petersburg, FL · Member since 2019 · 320 posts · 182 votes
    3y

    They should warn all the South Florida homeowners as well!

    Sure there is a possibility of it occurring, but the likelihood is small. 

    1Reply
  • Ran Iarovich
    Real Estate Agent · WA · Member since 2021 · 254 posts · 173 votes
    3y

    There is always a risk...

    0Reply
  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    3y
    Quote from @Travis Hatch:
    Quote from @Scott Mac:

    Well, if you decide you want to believe this stuff, you could always by in Denver, or along the Arizona Bay.

     @Scott Mac just curious, why Denver / Arizona Bay?


    I'm guessing because the Pacific Ocean will rise and make those areas beachfront......;-)

    2Reply
  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    3y
    Quote from @Aaron Dixon:

    Hey All,

    A family friend of mine has instilled the fear of Tampa as a whole being a poor long term investment due to Sea Level Rise (SLR). It seems without a significant investment into preventative measures Tampa and the surrounding area will lose much of its value amongst other things. 

    While I bought my first property in Riverview this time last year I’m now hesitant to even continue analyzing properties. Simply looking to get others thoughts on the matter. 

    Thanks to all!


     in hawaii the answer is rising the sea wall, the netherland is living under sea wall for century LOL

    0Reply
  • Scott Mac
    Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes
    3y
    Quote from @Travis Hatch:
    Quote from @Scott Mac:

    Well, if you decide you want to believe this stuff, you could always by in Denver, or along the Arizona Bay.

     @Scott Mac just curious, why Denver / Arizona Bay?


     Denver is 5,276 feet above current sea level.

    Some believe California will have an earthquake and slide into the ocean, making Arizona have ocean front property.

    The lowest point in Arizona is 70 feet above sea level. The highest point is 12,633 feet above sea level near beautiful Flagstaff.

    And if you see an old bearded guy building a boat full of animal stalls--well then--just yah.

    2Reply
  • Doug McVinuaPro Member
    Property Manager · Queen Creek, AZ · Member since 2016 · 608 posts · 426 votes
    3y

    @Aaron Dixon If Global Warming is a real issue, why did Obama purchase a beachfront house at nearly Sea Level? His purchase of a sea-level home tells you all you need to know about the sea actually rising enough to be a real issue.

    [email protected]602-751-7577
    6Reply
  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    3y
    Quote from @Doug McVinua:

    @Aaron Dixon If Global Warming is a real issue, why did Obama purchase a beachfront house at nearly Sea Level? His purchase of a sea-level home tells you all you need to know about the sea actually rising enough to be a real issue.


    Not to mention the current President too. Rehoboth, Delaware, right on the beach.....

    5Reply
  • David CaradonnaPro Member
    Investor · Tampa, FL · Member since 2022 · 19 posts · 16 votes
    3y

    Will this happen before or after California breaks off from the U.S. as well which was another rumor wasn't it? But in all seriousness:

    A. People are moving and investing here faster than I can refresh my MLS page.

    B. Banks and Lenders that have A TON more to lose than us would not be lending if they thought there was a significant risk and I promise they will do a lot more research to protect their money than you and I could ever dream of. 

    C. Same goes for insurance companies who are raising their prices, but still covering. 

    As a local investor in Tampa I'm inclined to tell you to avoid it all costs to avoid competition however I've never been more sure of the Tampa market since I've been here. There will always be 100 people telling you how wrong you are for every move you make. You need to learn how to tone out the ones who are uneducated in the matter. 

    2Reply
  • Manco Snead
    Investor · Spokane, WA · Member since 2015 · 238 posts · 133 votes
    3y

    There is science then there is junk science. Junk science is obviously junk. True science is derived from our unbiased scientific, largely academic, institutions. These institutions are the ones that create models for weather, climate change etc., and are based on available factual evidence. They are peer reviewed. If you choose to not believe them then you are free come up with whatever beliefs you wish. Our job is to distinguish the true science from the junk science.

    3Reply
  • Matt Devincenzo
    Investor · Clairemont, CA · Member since 2011 · 3k+ posts · 2k+ votes
    3y

    @Aaron Dixon how long are you planning to hold these units? No matter whether there is or is not a sea level rise, your investment will be unimpacted in your lifetime. Most units aren't owned for more than 7-10 years by an individual investor, so it won't have a measurable impact on you within that time horizon. 

    0Reply
  • Jay C.
    Walnut Creek, CA · Member since 2018 · 40 posts · 29 votes
    3y

    No one knows for sure but I am in the “not in my lifetime camp for sure.” I will say though that using the argument if “banks are smart enough to loan on it” isn’t the best argument at the moment 😂

    3Reply
  • Michael Masters
    Rental Property Investor · Westport, CT · Member since 2017 · 176 posts · 183 votes
    3y

    Hey Aaron,

    My day job is as an actuary.  Specifically, I am a Chief Pricing Actuary which means its my job to manage the team that prices insurance risk.  I do not price based on politics, I price based on facts and hard data.  My company is a specialty insurer, which means we sell policies where others fear to tread.  As you may guess, we do a lot of business covering Florida property.

    Follow this link to insured losses since 1970:

    https://www.swissre.com/media/...

    Look at the left side of the chart then compare it to the right.  Clearly the risk of catastrophe losses has greatly increased and continues to increase.  Even after adjusting for items such as inflation this is clear.  Premiums for Florida are currently blowing up.  Companies are being forced to increase deductibles while paying twice last year's premium.  Those who own individual homes may not see the bite as Florida insurance regulators protect them from such increases, but these additional costs will eventually make their way through to those policies as well.

    Count me as one of the few who considers global warming in my real estate purchases.  As an example, the city of Boston put out a report showing which neighborhoods would be impacted by various increases in sea level, I used this to decide which areas to stay away from.  I do this because I have a buy-and-die strategy, which means I hold it until it passes on to the next generation.  If I was only in it for the short term I may not care about these climate changes.

    Again, I couldn't care less about the politics, facts are facts.

    8Reply
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