The Economic Effects of Climate Change Adaptation Measures: Evidence from Miami-Dade County and New York City

Abstract

This research examines the economic impact of climate change adaptation measures on the housing markets of two representative coastal cities in the United States located along the Atlantic Ocean. The results shed light on how adaptation measures and investments influence housing values and local real estate markets with respect to their place-based and local forms of implementation. Numerous quantitative approaches, with the use of geospatial data, panel-data hedonic regressions, and difference-in-differences analyses, are used to examine changes in property values associated with climate adaptation measures and the dynamics of risk perception. The results also signal how risk perception and hurricane characteristics are reflected in housing markets, thereby shedding light on the effects of anticipatory and reactive adaptation strategies on property values in these coastal communities. Collectively, the study suggests which adaptation strategies and characteristics can contribute to maximizing both community resilience and economic benefits against the weather extremes caused by climate change.

The implication of the increase in storm frequency and intensity to coastal housing markets

“…Due to the higher flood probability caused by the low Base Flood Elevations (BFEs) in the 100-year floodplain, it is highly possible that the local government has implemented stronger flood adaptation measures in those areas. Consequently, the real flood risks, inherently associated with the spatial characteristics, might have been altered by the flood adaptation measures which influence homeowner's risk perception (Kim, 2020). Furthermore, property owners in the 100-year floodplain of the study area are required to purchase flood insurance, and this mandatory insurance policy can also affect homeowners' risk perception.…”

Bibliometric Analysis of Urban Coastal Development: Strategies for Climate-Resilient Timber Housing

“…Early work in this area warned that a sea-level rise could reduce 2800 km 2 of wetlands, requiring a protection cost of USD 43.6 billion (1990) [53]. Therefore, recent decades have seen work showing numerous alternatives for protecting wetlands and coastal infrastructure [26,57,64,74,81], as shown in Figure 12. All of these flood control strategies described above were subjected to a cost-b analysis to assess the economic feasibility of their implementation [82].…”

“…These measures are aimed at protecting individual property, while artificial wetlands, which correspond to land reclaimed from the sea (through sand reclamation) [81], and the different types of flood resilient housing, which, according to the U.S. Federal Emergency Management Agency and the Canadian Building Design Council, for a home to be less vulnerable to coastal flooding, it must have certain characteristics [37,38], like height; the dwelling should be built to an adequate height to prevent floodwater from entering the house.…”

An Assessment Methodology for the Evaluation of the Impacts of the COVID-19 Pandemic on the Italian Housing Market Demand

“…In this sense, the DD method allows an assessment of the level of information of the population on a given risk, and the extent to which this affects the dynamics of the residential property market. In fact, if the population is informed about the consequences of a seismic or a meteorological event, the residential real estate market suffers the effects of an overestimation of the damage resulting from the event, with effects on selling prices [23,36,[40][41][42]. Specifically, Belasen and Polachek [23], and Kim [42] have applied this technique to identify and quantify the effects of hurricanes in the USA residential market, and Rehse et al, 2019 [43] have used it for estimating the effects of environmental disasters of various natures.…”

“…In fact, if the population is informed about the consequences of a seismic or a meteorological event, the residential real estate market suffers the effects of an overestimation of the damage resulting from the event, with effects on selling prices [23,36,[40][41][42]. Specifically, Belasen and Polachek [23], and Kim [42] have applied this technique to identify and quantify the effects of hurricanes in the USA residential market, and Rehse et al, 2019 [43] have used it for estimating the effects of environmental disasters of various natures. Keskin et al [44], instead, have implemented a multilevel approach, capable of integrating several techniques simultaneously, to obtain a more effective assessment of the earthquake effects on the real estate market.…”