Climate Change and its Impact on Gulf Coast Housing Markets

By Cam Napier, Columnist

On February 23, 2021, President Joe Biden’s newly appointed Special Presidential Envoy for Climate, John Kerry, spoke to the U.N. Security Council on the existential threat climate change poses to global security. More specifically, he spoke about climate migration’s dire consequences, including humanitarian crises, undermined peace, and shattered local and national economies. This marked a historic point, as no such federal official had previously addressed climate migration directly. Kerry’s remarks follow Biden’s new executive plan, which directs federal agencies to conduct a report on climate migration.

The U.S. has long been subjected to an array of natural disasters, but strong evidence indicates that climate change significantly exacerbates them. For example, during hurricanes along the Gulf Coast, scientists have recorded a 10% increase in wind speeds and a 10%-15% increase in precipitation, both of which are directly attributed to rising surface water temperatures from climate change. For cities like New Orleans and Miami, the consequences that Kerry outlined to the U.N. are already materializing.

The Specific Threat to the Gulf

In the U.S., perhaps the most vulnerable region for hurricane-related damages is the Gulf of Mexico. Each year during hurricane season, 10 tropical depressions materialize over the Atlantic Ocean, Caribbean Sea, and the Gulf of Mexico. Many of these remain over the ocean. However, about five hurricanes land on the U.S. Gulf Coast every three years. As a result, the Gulf and Atlantic coastlines have noticeably higher property losses from natural disasters such as hurricanes than other regions. In fact, six strong hurricanes have struck Louisiana alone in the last 16 years, and only 10 zip codes in the state account for 11% of the country’s losses from natural disasters between 2002 and 2017.

This high concentration of damages has placed a heavy burden on residents of the Gulf region and led many to leave the area or find new housing arrangements at higher elevations that are more resilient to increasing storm damages. A study by the University of Georgia predicted that 500,000 people will leave the seven-parish New Orleans area by 2100 due to sea-level rise and the disasters that come with it, like intense flooding and hurricanes.

How the Housing Market is Failing Climate Migrants

As this migration begins, the housing market has already started to feel its repercussions, leading to the displacement of many citizens within Gulf cities like New Orleans. For example, the Miami-Dade region of Florida is likely to suffer 5 to 6 feet of sea-level rise by 2100, which would physically displace some 800,000 residents — nearly a third of the current population. 

Climate change and its effects, like the increasing intensity of hurricanes along the Gulf Coast, have caused an influx of investments to improve climate resilience. The movement to redevelop or build new properties that can weather the impacts of intensifying hurricanes and the flooding/sea-level rise that follows poses new threats, especially to low-income communities of color. This series of chain reactions has emerged differently in each of the Gulf’s coastal cities but with similar negative results. The shifting demand in housing markets in the Gulf has been fueled mainly by one hot commodity: elevation.

Increasingly, high-income households and property managers are moving away from coastal properties to avoid threats like high-intensity hurricanes, flooding, and wind damage. According to the Natural Resources Defense Council’s Senior Program Advocate, Sasha Forbes, “the lurking impacts of the climate crisis are pushing people inland onto higher-elevation communities that have been rooted there and have endured disinvestment, racism, and inequality and are now under the threat of gentrification and displacement.”

Cities like New Orleans have felt this shift in demand the most for properties in zones with higher elevations. In New Orleans, many of the previously undervalued homes in the city were located in working-class neighborhoods perched on higher ground along inland areas of the Mississippi River. Home values have skyrocketed in regions like the Lower Ninth Ward, Uptown, and Mid-City, pushing out majority-minority populations that built the area. Properties in higher elevation areas away from Lake Pontchartrain flooding zones, like Uptown, saw an almost 280% increase in value over just five years beginning in 2015.

Plans For Change

To keep citizens placed in the neighborhoods they grew up in, Gulf cities could implement property tax restrictions to combat gentrifying forces. If long-time locals were free from the threat of soaring property tax hikes, they might stand a better chance financially at staying in their communities. In Austin, Texas, where property redevelopment is growing quickly, the local government passed a 20% homestead exemption on property taxes that shifted a $25-million tax burden off homeowners in the city. This policy ultimately helped restrain development in the surrounding area from pushing property taxes into unaffordable thresholds for incumbent residents. An increase in property tax exemptions for cities like New Orleans and Miami could help ease the rising pressures homeowners face due to redevelopment and the commodification of their home’s elevation.

Whether Gulf cities weigh the possibility of new property tax exemption policies or another economic solution, any research for policies to prevent climate migration should consider the multitude of studies proving that climate migrants widely prefer to reside within their original communities.

Featured Image from Pixabay.

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