Joshua Schreiber and his family have never been city people. When they moved from Sacramento, California, to the Sierra Nevada foothills, they were thrilled to exchange cramped urban lots for a “jaw-dropping” vista and 5 acres that backed onto public land.
“It was insanely gorgeous and very affordable,” the social worker said.
But after four years, they sold and moved 27 miles west to the far edges of the state capital's suburbs. As much as they loved their home, it was no longer tenable. Wildfires became more frequent, torching nearby ridgelines and inspiring dread.
“Every year it got drier and drier. We just didn’t feel safe living there anymore,” Schreiber said of the home in Pollock Pines they left. “We got tired of being on standby in the summer to evacuate.”
This month, the 221,000-acre Caldor fire came within a mile from their former town, so close it singed two friends' houses and melted the vinyl windows of another, but sparing the one they used to live in. Still, only 76% contained, it has burned for 43 days across three counties, destroying 1,003 structures.
Climate change – and the ever more extreme weather it brings – is changing real estate equations. American dreams are increasingly running into weather nightmares, raising pressing questions about where it makes sense to live.
“There are just some places that are too dangerous to occupy,” said Chad Berginnis, executive director for the Association of State Floodplain Managers. “It’s like a freight train coming at us but politicians and citizens aren’t ready to hear that yet.”
Wild weather events, such as stronger storms, flooding, droughts and fires, are expected to worsen and become more frequent in the coming years, according to last month’s report by the United Nations' Intergovernmental Panel on Climate Change.
Last year equaled 2016 as the hottest year on record. And this year will likely be one of the coldest of the coming century. The heating up of the Earth’s atmosphere and accompanying dramatic climate swings are having an impact on life on its surface and the homes of people who live there.
Nearly 6 million more homes and commercial properties are at risk than identified on the Federal Emergency Management Agency’s floodplain maps, according to a recent analysis by the nonprofit First Street Foundation. That's by 2050, within the 30-year mortgage window. Similarly, more homes face extreme risk of wildfires than current projections by the USDA Forest Service, the First Street Foundation said.
So far this year, wildfires have burned more than 5.7 million acres nationally across 10 states, according to the National Interagency Fire Center. Sixty-three large fires were active as of Saturday.
Last year, the United States experienced 22 separate billion-dollar weather and climate disasters, according to the National Oceanic and Atmospheric Administration. The horrific collapse of Champlain Towers in Surfside, Florida, brought home to many the potential danger of saltwater intrusion as sea levels rise.
On Aug. 31, Hurricane Ida, one of the strongest storms to ever hit the mainland U.S., ripped ashore in Louisiana before slamming into the Northeast. It killed more than 60 people. Insured property losses could range from $17 billion to $25 billion, according to AIR Worldwide, a catastrophe modeling company.
Torrential rains in Tennessee last month killed 20 people and left dozens missing. Global warming is causing more of these kinds of extreme rain events, with the amount of precipitation in the southeastern United States increasing by a third between 1958 and 2016, according to the U.S. National Climate Assessment.
On Sept. 7, President Joe Biden declared a "code red" on climate change, saying "we're living through it now. We don't have any more time." He hopes that Congress will approve his $1 trillion infrastructure plan, which includes several items to tackle global warming.
No adult in the room
Federal infrastructure programs take time. For now, despite the increasing number of Americans living in danger zones, federal, state, or local governments do little to stand in their way.
"The ball is essentially in homebuyers hands, said Zhong-Ren Peng, director of the International Center for Adaptation Planning at Design at the University of Florida.
Zoning is a local matter, and politicians are mostly interested in keeping property values high and increasing the tax base with more building, he said. Mortgage companies continue to sell in risky areas. Insurers raise rates or cease offering insurance at all, which prompts cries for federal programs.
There are solutions, say experts, but they require political and economic backbone to stop building in danger zones or at least insist on expensive adaptations.
"And adaptation means some places should not be developed at all," said Peng.
Asking individuals to make those decisions when they seldom have access to all the facts is unfair, said Jesse Keenan, a professor of real estate who researches climate change adaptation, economics and regulation at Tulane University in New Orleans.
"There's a climate intelligence arms race," he said. "The private sector is moving quietly to uncover these emergent risks but as a general proposition we just don't have good disclosure."
Thomas Ruppert, a coastal planning specialist at Florida Sea Grant and the University of Florida Extension, isn't confident anyone's going to be "the adult in the room” when it comes to making decisions about where is safe to build.
“There's no one at this point who has sufficient political or economic reason to stand up and say these things loud enough,” he said.
The money’s coming out of everyone’s pocket
Not only those who live in harm’s way pay. The costs end up on everyone’s shoulders.
The National Flood Insurance Program is a federally subsidized insurance program that provides more than 95% of flood insurance in the United States. It’s $20 billion in debt, which falls on taxpayers.
There's no national fire insurance program, though some are calling for one. California has the California Fair Access to Insurance Requirements Plan, a state-mandated insurance pool that sells basic fire insurance for high-risk properties where traditional insurance will not.
In California, the cost of fire insurance has begun to go up as more fires hit every summer. No standard insurance companies would sell fire insurance to the Schreibers in the area they used to live. “We had to go through Lloyds of London. It was almost like another mortgage payment,” Schreiber said. It was one reason they moved.
So far in 2021, almost 2 million acres of the state have burned and 3,050 structures have been damaged or destroyed according to CalFire. Last year it was 4.2 million acres burned and 10,488 structures. Such events result in higher insurance premiums for everyone.
The California Department of Insurance last Monday issued a temporary moratorium on insurance companies dropping customers in 22 counties who live next to or in the perimeter of a declared wildfire disaster. It was the third time such a moratorium had been declared since the law was first passed in 2018.
Property insurance, especially when it's federally subsidized, can create what experts call a moral hazard, encouraging continuing risky behavior because there’s less downside.
Homeowners benefit from an implicit subsidy, Keenan said. "They aren't taking the risk, the government and the taxpayers are."
Insurance companies walk a fine line between being affordable and being rational. Consumers want cheaper insurance but that can result in bad choices.
Insurers are working to collect the data they need to properly price policies in risk-prone areas, said Karen Collins, assistant vice president for policy, research and international with the American Property Casualty Insurance Association. “We’re starting to see a tipping point in California,” she said. “There’s discussion of putting the brakes on new development.”
Any changes will need to be gradual, said Cooper Martin, director of sustainability and solutions at the National League of Cities.
"It's not to say you can't price risk, but you can't go from the system that we set up in the 1970s, fast-forward 40 years and just make those changes all at once," he said.
It might seem that lenders wouldn't want to buy a mortgage on a home that might not survive for 30 years. But there’s no incentive for them to stop providing mortgages in high-risk areas when they can easily unload them, said Keenan.
Banks are disproportionately selling such home loans to the secondary market and not keeping them on their books, his research found.
"It's like musical chairs," said Lee Reiners, executive director of the Global Financial Markets Center at Duke University law school. "Lenders are still willing to knowingly make loans in areas that are at risk of climate change-related losses because they’re just going to sell it on."
This could change. In January, the Federal Housing Finance Agency put out a request for comment on a plan to have Fannie Mae and Freddie Mac's pricing reflect climate change risk.
Or it could not. There's powerful political pressure not to do so "because there are a lot of hands in this cookie jar," Reiners said. "If you say people are going to have to pay higher interest rates or higher insurance premiums, their congressmen are going to hear from them."
An equity issue
Some areas have instituted buyout programs for homes hit with repetitive losses, usually due to flooding. Louisiana has a state Watershed Initiative which includes a buyout program for flood-prone areas aimed especially at low- to moderate-income residents.
But most buyout programs favor the wealthy and all do nothing for the 36% of American households who rent, said A.R. Siders, a professor of climate change adaptation policies at the University of Delaware.
No matter how many homes are bought out, the amount of land being developed in danger zones and the size of those zones continue to grow. In many areas, far from pulling back from vulnerable lots development is expanding – and not just on the sandy Florida coast.
A 2019 Zillow and Climate Central analysis found that Connecticut is developing in flood risk zones three times faster than safer locations. In Delaware, Mississippi, New Jersey and Rhode Island, building is twice as fast than in areas less prone to flooding. New Jersey, Florida, and North Carolina have allowed the most homes built in risky zones.
The risk all too often ends up transferred to those who can least afford it when owners move out after floods or fires because the risk is too great and lower-income renters move in.
"This is a huge problem," said Tulane's Keenan. "What do you do about the people who come in and fill the void in these transitions?”
The adaptation paradox
An alternative to leaving danger zones is adapting to the coming changes. If sea levels are rising, build a sea wall. If wildfires loom, create buffer areas and fire harden buildings. If increasing rains cause flooding, raise houses and beef up sewer systems.
But sometimes protection can backfire. It's called "the safe development paradox."
“When people see a seawall, they have the false conception that they’re living somewhere safe, so they don’t even want to buy insurance,” said Peng.
Making better land-use choices now would be cheaper in the long run, but there’s little incentive for towns to do that because it doesn't add to the tax base.
Sometimes, even adaptation is impossible, as climate scientist Klaus Hans Jacob discovered when his wife fell in love with a house in Piermont, New York, in the Hudson River's tidal estuary. From decades of research, he knew rising sea levels would make the neighborhood even more prone to storm surges and flooding.
Jacob struck a deal with her. They’d buy it, but only if he could lift the foundation six feet.
“So we handed in the plans to our local government and they said, ‘That’s all good and forward-looking, but you can’t raise it more than two and a half feet because you’ll exceed the zoning height limitation,’” said Jacob, a professor of climate risk at Columbia University’s Lamont Observatory.
They asked for a variance and were told no “because it would set a precedent.”
When Hurricane Sandy hit in 2012, the couple had two and a half feet of mud in their living room. “A week after Sandy, I get a letter in the mail. It said, ‘Now you can raise it up.’”
If you tell them, maybe they won’t come
It might seem no one would buy or rent a house in an area experts say is likely to flood or burn, but that’s only true if the potential residents know.
Organizations like the First Street Foundation and ClimateCheck have created detailed maps to show the climate-related risks of specific properties. A Flood Factor tool already exists and has been incorporated into the Redfin and Realtor.com sites, and a wildfire tool is coming this year.
"Our mission is to democratize the information," said First Street's Michael Lopes. "Banks have this information, insurance companies have it, the government has it. Often (the buyer) is the last person to know."
In 21 states there’s no requirement for full disclosure of threats when properties are sold. Out of the 10 states with the highest risk of severe floods over the next 100 years, only two have strong flood risk disclosure laws – California, and Louisiana, according to data from the Natural Resources Defense Council.
In New York state, for example, there is a requirement that sellers disclose whether a property is located in a designated floodplain and whether there have been previous flooding problems. But sellers can opt out of the requirement by paying a $500 fine.
The argument by homeowners, real estate agents and some cities has been that making risk information available could cause some houses to lose value.
“But think about the alternative,” Siders said. “We’re tricking buyers by not giving them information in order to get them to pay more in order to live in a risk-prone area.”
Solutions won’t be easy.
According to experts, zoning must be tightened to stop building in highly vulnerable areas. Building codes must be strengthened so what's built can withstand what's coming. Sellers and landlords must be required to reveal known threats to would-be buyers and renters. Insurance premiums need to be more in line with known and anticipated risks. Government buyout programs must expand so homeowners and renters have an out.
Not everyone can move, so some kind of adaptation will be necessary, said Cooper Martin, director of Sustainability and Solutions for the National League of Cities.
"We can't just pick up and move thousands and thousands of people, whether it's supported by the government or not," he said.
Broadly, it will take rethinking the way housing and development have been structured since the Second World War. Take Florida, which was built on a culture of urban sprawl development, said Florida's Ruppert.
“In order to pay for today we need new development to inject more money into the economy to pay the bills to support areas that we’ve already built,” he said.
Making existing towns denser and easier to protect from rising waters would save money because the tax base would increase with the existing infrastructure. Density can be cheaper to maintain and can produce the highest value per acre, said the National League of Cities' Martin.
"Cities are starting to talk about a combination of climate, housing and transportation planning all in one, instead of keeping those things separate," he said.
Breaking the cycle is difficult but to survive economically communities much change, Ruppert said.
“The way we live is not inevitable, it’s the product of the choices we’ve made,” he said. “If we learn that, we can start to rethink those choices and create the world we want to live in.”
This article originally appeared on USA TODAY: Future of housing in US uncertain as climate change disasters increase