Flood damage is a growing concern for property owners throughout the United States, but a new report from CBRE shows South Florida in particular needs to be wary of rising tides.
The report, authored by CBRE’s Quinn Eddins, shows that the tri-county region has $366 billion worth of properties at risk for flood damage. That makes South Florida the region with the most to lose, ahead of even the New York metropolitan area with $266 billion at risk and New Orleans with $143 billion.
Together, those three metros make up roughly 74 percent of the country’s potential losses during a 100-year flood.
Quinn Eddins, director of research and analysis at CBRE
The 100-year flood is a statistical term describing a water surge that has a 1 percent chance of occurring. It’s frequently used to determine risks for property damage or flood insurance.
On an annual scale, the Miami metropolitan area stands to lose a projected $672 million due to flooding.
Eddins said that number will likely increase as Miami-Dade, Broward and Palm Beach counties continue to urbanize and develop coastal territory.
“Losses from flooding during hurricanes are already potentially huge in Miami and they’re only going to get bigger,” he said.
The report said by 2050, if no changes are made, the Miami metro could be looking at $7.3 billion in potential losses. And that’s assuming the current probability of a flood stays the same, even though it will likely increase.
The U.S. could lose more than $200 billion annually if nothing is done, according to the report. That’s roughly the same as two Hurricane Katrinas making landfall each year.
Eddins said property owners and developers should be wary of where they choose to build, and they shouldn’t just rely on public infrastructure to protect themselves.
Investing in pumps, flood insurance and locations outside of heavy flood zones could help real estate professionals save bundles from potential damage.
“We can’t afford to do nothing,” Eddins said.
Information used for the CBRE report draws on a 2013 article by Stephane Hallegatte of the World Bank. The report also cites data from the National Flood Insurance Program.