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Adaptation, Sea Level Rise, and Property Prices in the Chesapeake Bay Watershed

Author

Listed:
  • Patrick J. Walsh
  • Charles Griffiths
  • Dennis Guignet
  • Heather Klemick

Abstract

While the mean global sea level has climbed by an average of 3.2 mm/year since 1993—and is projected to increase another 0.18 – 0.82 meters by 2100—coastal populations have continued to expand. Coastal communities may be compelled to adapt to these competing forces, and at an increasing frequency in the near future. This paper explores the property price impact of several adaptation structures that can help bolster the shoreline and protect homes from sea level rise (SLR) in Anne Arundel County, MD. Our study uses a novel dataset on coastal features that is very spatially explicit, and contains the location of all adaptation structures. We also use maps of SLR zones to explore how property price impacts vary depending on vulnerability to sea level rise. Results indicate that sea level rise and adaption structures, such as bulkheads and rip-raps, can have a significant impact on waterfront home prices, with the impact varying across risks and type of adaption structure. A home located in the most threatened SLR zone that is unprotected by an adaptation structure sells for 19-23% less, on average. On the other hand, homes in threatened SLR zones with certain adaptation structures see a 21% increase in property price, approximately compensating for the threatened location. Since sea level in the Chesapeake Bay is projected to rise approximately two feet over the next century, the results here suggest that property markets are incorporating this information. Our results should be useful to policy makers, developers, insurers, and other parties involved in coastal management, who trade off the costs and benefits of development and adaptation.

Suggested Citation

  • Patrick J. Walsh & Charles Griffiths & Dennis Guignet & Heather Klemick, 2015. "Adaptation, Sea Level Rise, and Property Prices in the Chesapeake Bay Watershed," NCEE Working Paper Series 201502, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Feb 2015.
  • Handle: RePEc:nev:wpaper:wp201502
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    Cited by:

    1. Olga Filippova & Cuong Nguyen & Ilan Noy & Michael Rehm, 2020. "Who Cares? Future Sea Level Rise and House Prices," Land Economics, University of Wisconsin Press, vol. 96(2), pages 207-224.
    2. Hashida, Yukiko & Dundas, Steven J., 2023. "The effects of a voluntary property buyout and acquisition program on coastal housing markets: Evidence from New York," Journal of Environmental Economics and Management, Elsevier, vol. 121(C).
    3. Nori Tarui & Seth Urbanski & Quang Loc Lam & Makena Coffman & Conrad Newfield, 2023. "Sea level rise risk interactions with coastal property values: a case study of O‘ahu, Hawai‘i," Climatic Change, Springer, vol. 176(9), pages 1-21, September.
    4. Seung Kyum Kim & James K. Hammitt, 2022. "Hurricane risk perceptions and housing market responses: the pricing effects of risk-perception factors and hurricane characteristics," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 114(3), pages 3743-3761, December.
    5. Liu, Xian & Noonan, Douglas, 2022. "Building underwater: Effects of community-scale flood management on housing development," Journal of Housing Economics, Elsevier, vol. 57(C).
    6. Beasley, W. Jason & Dundas, Steven J., 2021. "Hold the line: Modeling private coastal adaptation through shoreline armoring decisions," Journal of Environmental Economics and Management, Elsevier, vol. 105(C).
    7. Marie Lautrup & Lasse Læbo Matthiesen & Jette Bredahl Jacobsen & Toke Emil Panduro, 2023. "Welfare Effects and the Immaterial Costs of Coastal Flooding," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 85(2), pages 415-441, June.
    8. Johnson Ankrah & Ana Monteiro & Helena Madureira, 2023. "Geospatiality of sea level rise impacts and communities’ adaptation: a bibliometric analysis and systematic review," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 116(1), pages 1-31, March.
    9. Bruno, Ellen & Van Dop Sears, Molly & Hanemann, Michael, 2020. "Groundwater Quality and Crop Choice: Implications for the Cost of Seawater Intrusion," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304340, Agricultural and Applied Economics Association.
    10. Parton, Lee C. & Dundas, Steven J., 2020. "Fall in the sea, eventually? A green paradox in climate adaptation for coastal housing markets," Journal of Environmental Economics and Management, Elsevier, vol. 104(C).

    More about this item

    Keywords

    sea level rise; hedonic regression; coastal resources; environmental economics; benefit-cost analysis; valuation;
    All these keywords.

    JEL classification:

    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q26 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Recreational Aspects of Natural Resources
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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