Session 5B: Real Estate Markets & Economic Aspects of Retreat

well welcome everybody this morning thank you for coming to this panel we'll start right at 11:00 that clock is about thirty seconds slow but we have a tight schedule today we have a lot of great presenters who are joining us I think one of our presenters gets the award for coming the greatest distance from Wellington so thank you for joining us really thank you all if I had been asked if we do not sit in the aisles please for purposes of building codes and fire officials so if you could not sit in the aisle it would be greatly appreciated let's see I think we're largely full but but please feel free to come and go in the back as you see fit we have a got a lot of great presenters for the presenters please turn off your cell phones so we don't get any disturbance there then let's go ahead and get started decommodification and managed to retreat we will have a variety of law and economics driving our discourse this morning and so I'm very excited to have everybody yes I'm sorry okay great thank you very much all right let's welcome Mike Pappas from the University of Maryland who's gonna get started for us good morning everyone thank you for coming thank you for having me today and today I'm presenting a project that I'm working on with a colleague Victor flat from the University of Houston Law Center Victor's very sorry he can't be here to co-present he would want me to say that if you have any criticisms please direct them to him and and credit to me and so the goal of the project that we're working on is to apply some property law concepts regarding commodification that are gonna give hopefully some theoretically useful and some practically useful contributions to the toolkit of managed retreat and in particular here are the two practical things that I think we can take away from and hopefully this presentation will build to that first is thinking about commodification concepts and I will define what we mean by that can help us frame when we want to trigger manage retreat and I'm gonna use the term we as a catch-all because this framework is agnostic as to who we who the decision maker is and we'll come back to that in a second right so one it can provide a framework for when man retreat and then possibly more importantly or at least more practically it can also offer some approaches as to how to accomplish the goals of managed retreat assuming there are goals and we'll return to that in a second but now let me talk about what we mean when we talk about commodification and I do promise to advance from this slide eventually but not yet so commodification as we are considering it and as the property law literature sort of talks about it is whether we treat something as a commodity that is freely transferable between willing buyer and willing seller and freely transferable for a whole range of uses right so the idea of dica modifying can mean either making something not fully transferable not transferable at all even if there is willing buyer and willing seller or cutting off some uses that are connected typically to property ownership from being transferred right and so we're used to talking about limits on property use like land use control like zoning like that kind of thing when we're talking about decommodification we're talking about something further right certain aspects of control of property being taken away out of the market either temporarily or permanently such that the ultimate uses of the property are limited okay so in applying that what we want to highlight is the long term management aspects of managed retreat right and how property law and policy can contribute to that so that retreat isn't this isolated event of people going somewhere else but what happens to that land that is retreated from in the long term look at some property tools in terms of planning that and in terms of how if we really want to direct that we might remove it from the market sphere because the market doesn't have any inherent direction there are outcomes but not necessarily a direction so if we want to impose some kind of goal or direction that may involve some long-term planning in terms of property okay so now as we build to that we'll start in the obvious place which is sneakers and let's talk a little bit about the idea of commodification at least as we're talking about it so sneakers are a commodity and these sneakers in particular are the impossible-to-find nike XJ crew kill shot number two I want to draw it a couple of things from this slide this is just a screenshot of an article that was in Esquire it came out in May 7th 2018 and what it documents for us is this sneaker which as it happens has all the clean lines and easy colors you would want as summer approaches right this particular sneaker was incredibly popular so much so that prior to this article right the sneaker was unavailable because it was backordered and this article documents it's back May 7th it's back but buy it now because some colors are already back ordered until late August ok so why start here this is a commodity I mean sneakers are as commodified as you can imagine we have two major retailers participating here these are sophisticated market participants and we have a product that's backordered and so this highlights that markets take time to adjust I don't think anyone's arguing that the sneaker market is broken right or that we have incredible market failures here we have a pretty well-functioning market it takes time to adjust because that's the nature of market so if you look at an economic model right where eventually markets come into equilibrium because those lines will cross what that doesn't capture is the time it takes in this case for months backorder and so what viktor flat and i have done in previous work is identify is that five minutes down or five minutes left five minutes left wow i got to talk fast i thought i had more than that um what we've identified is markets take time to adjust and we've labeled that adjustment failure cost there are costs associated with that time in this case your inability to get the easy spring colors that you were looking for in a sneaker or maybe you're paying more for them in a secondary market on ebay so this is a picture of a large cat it's a particularly cat it's a jaguar and endangered species throughout its range in the united states there's a big difference between Jaguars and sneakers right Jaguars if we had a market for Jaguars the adjustment failure costs are incredibly high the time it might take a market to equilibrate for Jaguars if say their survival was dependent on it the cost over that time is incredibly high because backorder for Jaguars is extinction right so we don't have that as a commodified entity we don't treat Jaguars as property and what we suggest in our work is this is descriptive of generally how law and policy treats commodification when adjustment failure costs are relatively low we're happy to have things become modified when they're relatively high we don't bear commodification so how does this apply to managed retreat land has been a commodity for a long time we call it real estate this is actually coastal property though you can't tell because there's no evidence of in the picture right we might think of this a map you may have seen from new york times and it's not just flood it's all kinds of disaster costs as a map of how there are different adjustment failure costs for land across the United States right so the cost of the market coming into equilibrium as risks get incorporated into the cost or value of real estate might be different in different places it costs more for markets to adjust in these areas I mean bearing that in mind here's how this commodification framework might inform manage retreat one way of looking at it is when to institute managed retreat when we can identify adjustment failure costs as being too high right this is going to give us a justification for for pre-empting market dynamics for intervention and then again maybe more practically how to do it if we want to serve continuing goals other than the outcomes unpredictable outcomes of a market or sequential long term losses from markets right and we may want to use tools of commodification for managed retreat planning and this also allows us to tap into experience with decommodification in other contexts certain cultural patrimony is d commodified right national parks rd commodified trust property long-term trust is in some ways d commodified so it allows us to tap into existing management strategies so this allows for some choices and i mentioned before we're agnostic to a number of these choices but i want to point out that when we think in terms of the commodification it allows for some planning choices in terms of when who decides to d commodify it could be at the individual level could be the community level it could be at the government level and if we opted for the philosopher-king i don't want that if we do the philosopher-king could decide that as well and this allows for a pluralist approach to how are we gonna calculate these adjustment costs what's going to be included how much subjective value etc but it gives a framework for trading off costs and benefits in a way that's a little less ad hoc going forward how to impose decommodification one ways to structure it into a buyback program or a disaster relief program right if this program takes effect then this property is going to be in some way d commodified what does that mean to be d commodified in some ways it could be permanent it could be temporary it could be treated like a national park it could be treated like some kind of temporary limitation on the ability to sell or the ability to engage in permanent structural change or permanent relatively permanent habitation right we could look at the extent what level of use is going to be allowed and we could look at how is it going to be enforced how do we prevent spill overs how do we prevent re commodification and so just in the final seconds this is a picture of houston during hurricane harvey 2018 right after and question going forward is if we think about this in terms of managed retreat what do the adjustment failure costs look like here in this which used to be underwater 125 billion in damages right but now according to the Houston Chronicle 13.5 billion in potential development right there's already been 10 million in buyouts there and so if there's this risk of sequential high and regressive going down economic opportunity levels adjustment failure costs might we go from the model of now the areas that flooded have largely been bought out maybe disaster capitalism put up for rent to something and please note my manipulation of the graphics I'm rather proud of it right to something where we're gonna think about this property fundamentally differently thank you very much now while we switch the slides very quickly does anybody have one question one question yes in Texas like Florida everything is property tax based and so I think the struggle in Houston is that they have this enormous glut of these older buildings in Harris County at 40 50 thousand of them and all these rental companies have come in and bottom up not understanding that the flood insurance is increasing on them and so they pay too much for them they're gonna run them to death with renting them out for 10 years until the insurance equals the cost of the building and then the city's going to inherit 40,000 or 30,000 worthless buildings and they're going to close schools and fire policemen and have no road maintenance so it's a it's a huge huge issue thank you all right now for professor Linda she one of my favorite cited authors and talk about one of my favorite subjects Laney so welcome and thank you being on a panel about real estate and economic development but this research is motivated by the fact that as we see a number of cities beginning to plan for adaptation becoming adaptation leaders doing all the vulnerability assessments that we say they need to be doing if you dig down deep into any of these cities as Joel OGG body showed yesterday whether it's in Legos or Manila they're doing adaptation planning and at the same time at the same time they are doing land reclamation on the coast in Florida you've got the great well touted South East Florida climate compact and all the purple blue and green buildings are either recently completed planned or under construction buildings in Southeast Florida in Boston almost all of these municipalities that you see outline and gray have done vulnerability assessments adaptation plans and they have in their same development proposals cited all of the major new development in the region on waterfront regions that they know are currently in the floodplain and will certainly be under chronically and undated with six feet of sea level rise so why is it that we seem to know better and then continue to do more bad why do we keep losing even more and ciders yesterday from the from Harvard was talking about we urgently need to stop making the situation worse why are we still in this process and so I think that if we were thinking about from the perspective of a municipality acting as a planner what is it that the planner the councillor the mayor is thinking about they have to manage a municipality which has a budget and I don't want to underestimate the importance of growth coalitions about corruption about why it is I mean growth at least including elected officials are pro-growth but the reality is that municipalities in much of the world including internationally are very dependent on property taxes and under fiscal austerity which is what we've been experiencing for 30 40 50 years where you have declining federal transfers to States decreasing state transfers to municipalities cities have to increasingly rely on property taxes and with any kind of property tax cap that states implement whether that's prop 13 or prop two-and-a-half the more it is important then that municipalities need to grow the base or grow the the unit value which is gentrification of their property in order to make the services that you want in any place pencil out so in the u.s. 30 percent of municipalities on average rely on sorry municipalities on average in the United States depend 30 percent of their budgets come from taxes in Massachusetts that's 40 percent in coastal Massachusetts at 60 percent and in the municipality so I'm going to talk about today that's 70 to 80 percent especially true for residential municipalities where this is a primary tax base so we did a study I mean I think it's interesting that with all the vulnerability assessments that we've done social vulnerability damages physical vulnerability we haven't brought it back to the unit after we care about here is governments local governments we keep saying cities are supposed to be the ones making a change what is the impact of fiscal to their fiscal tax budget and I want to recognize that Union of Concerned Scientists came out last year with a big study for the national government on this and I'll reference their data later although in this particular analysis we have different methods and happy to talk and Q&A about that but this data comes from municipal government and land values in Massachusetts and what you can see is as a percentage of total revenues sea level rise at 6 feet could threaten up to 10 in the darkest colors 10 to 25% of total budgets if it's a percentage of the tax levy which is the own source revenues that municipalities control irrespective of federal and state policy it's even higher going up to as high as twenty to forty three percent in the darkest colors but what we also see here is that it's very uneven there are some places many places for even at six feet of sea level rise it's very low impact and they're gonna do fine in terms of climate impacts to their their picture right so left unaddressed what we're seeing a sorry what we're seeing right now in terms of advocacy of what we should do is a UCS report is that most of the financing options for cities continue to rely on them growing bonds you have to pay back bronze property taxes you have to have property tax people there to pay those resilience fees depends on you people coming in so all of these things kind of require growth either stay or to expand in the future to pay this back or we're talking about market instruments to align risk to inform property up buyers that this is gonna be at risks and form developers so that they don't come that changes the picture for people leaving or coming back but in a way it would accelerate the dire fiscal picture for municipalities which is that any change to their property tax base is going to affect their ability to provide the services but most of that services being schools water sewers roads and any decline in their ability to provide those services will simply exacerbate that cycle driving more people to leave and the impoverishment of those municipalities so within this kind of framework it is actually very logical that what you're seeing cities do is they are continuing to build in the very last spaces in dutch' post-industrial waterfronts any of this waterfront that they have build it more resilient get more growth get more taxable dollars to service and these that they have today to provide the things that we say we want affordable housing open space any of that stuff that means those places that are relatively underdeveloped low-income communities lower value economic value communities are going to become more of interest the gentrify errs and sometimes the municipalities will want that because they get rid of low-income communities that they never never really wanted to cater to perhaps they get wealthier land owners they get more property taxes and in places that are not of interest to urbanization or to development you're going to see more foreclosures and what does that mean for municipalities so I want to say that you know it's not necessarily about the moral imperative or the leadership qualities of our cities that are driving them to keep developing and low ink are in low-lying places this is how our structure of fiscal policy and land-use policy in this entry drives all of our municipalities to make these very rational choices and if we want to do something different we need to do something different so what do we do this is where as a teacher and I'm sorry Jessie I thought I had 15 minutes I'm just gonna let you know I will do I will do my best to talk quickly so what do we do I also face a struggle that a lot of our scenario planning was a pretty narrow bandwidth and that did not include things like retreat or even accommodation so in this workshop class we worked with Metropolitan Area Planning Council which is the cog for Metro Boston and we had a class and we worked with three towns that Kaitlyn spent yesterday presented very eloquently how this whole spring they've been doing a vulnerability assessment social vulnerability assessment with this town of Hull which you see here it's a peninsula that juts into the ocean and they're in despite the very clear data they presented they showed how none of the people locally we're talking about managed retreat and so simultaneous to that process we engaged the town plan of the town manager of Hall as well as a Planning directors of two adjoining municipalities Hingham and Cohasset to think about what might be the alternative scenarios and you can see them here here's Boston in the distance Hall as the stretch of land going here and the very wealthy communities are joining them so hull historically was a Native American hunting and fishing grounds when certain settlers came here it was continued to be a fishing ground slowly it became the pleasure grounds of vacationers from Boston it has the largest beach for Metro Boston and over time as a housing market accelerated in Boston and heated up this became more permanent housing and it is for the recent decades mostly working-class blue-collar ninety-six percent white average household income $75,000 so a bit wealthier but not super wealthy but that's changing as more professionals start to buy up this cheaper housing close to Boston their values are they want to raise families they want to be able to age in place and grow old here they want to have high services in schools they want affordable housing that they can stay and they want to be somewhere where they can see and fuel the beauty of nature they want a strong sense of community you get this from the planning documents these are the values that people have and so our challenge was what adaptation futures could provide the things that people are looking for here so and this is their reality this is from the UCS data if you look at inundation chronic inundation twice a month underwater by 2100 is most of this place and so our valuation it doesn't you know if you're in gray on Highland we still count that as viable in reality if you can't access it it's even less viable so we did a whole process of analyzing a bunch of different kinds of data geographical GIS fiscal budgets planning documents here's the Town Manager talking with one of our students we did tours and then we looked at what are the different possible scenarios moving forward well the base one is do nothing and by 2100 this would be the kind of impact to the budgets potentially and the impacts of the services of these municipalities and that's not a picture that you want to have what if we build a giant wall this has been proposed for Boston and they have found UMass Boston said this is not feasible at the moment so okay that's out what if we do local protection sea walls of different kinds and Massachusetts is no longer permitting the sea walls and sand dunes at six feet how much can a sand dune protect also you've got groundwater pushing up so your roads and all your infrastructure is sitting in the water so that one that we focus on three different scenarios and these are to elevate we quantified and I'm side on time to show that quantification this students there which is an excellent piece of work one of the students is here in the back Audrey walks so they quantified this Audrey scenario elevate all the houses and the road to protect all the seats the infrastructure nourish the beaches this is what residents may want right this is what they may want we want to stay here what if we read trenched we bought out we retreated from the coast we identified we built towers within the remaining land or we move to other towns what then what what's the costs and benefits and what if we bought those flooded communities out or we bought the entire town out and made this part of a new park site or yesterday's TED talk you know what if we have a new National Seashore that's public amenities elsewhere and you can think as planners this is the ideal solution move people out of harm's way let's have a beautiful National Park and are the data is this why this is so challenging so if we build a wall you get everything to keep the same but there's no funding necessarily and maybe Boston they're big enough they're gonna get that funding most places up and down the coast New York Times just reported we're not gonna have funding to pay everybody to have a seawall what if we elevated if you have you know three to six hundred dollars opinion dollars depending on your discount rates but six hundred million dollars without discounting is what you would be spending to elevate everything and not including your electricity and your water pipelines to get to basically Ground Zero in 2100 because then you have another batch to elevate here and even though though people may want this because they think they can stay in place actually because of the increasing costs only wealthier homeowners are going to be able to afford this and so the people who right now want to stay they are going to be financially displaced even though this strategy seems like you can stay and is this how we want to spend our money if we want to retreat if you're retreating to other places you can actually add to than that revenue of the region but if you've lost half the people in your town you still have to provide those services but with half the budgets what municipality is going to do that it's not just about the buyouts it's about leaving the schools and the services behind but if you're talking about buying out the whole place we're talking about two billion dollars to buy it out and restore this and much less isn't that legal right now we don't have the funding for it this is it is very very difficult to get at the kind of an ideal future so I come back to this you know we don't want regional inequality the creation of new enclaves the creation of new climate slums but what do we do to get there so in the US and our fragmented governance structure perhaps one way is to get towards more regional planning regional analysis to show these dynamics but really about regional governance to then implement where you you're gonna ask other municipalities or change their land-use practices to accommodate this you're gonna ask the region's to pay for this we don't have the structures to do that right now but this is also a really hopeful opportunity because the same kind of fragmentation and municipal barriers were put up to enforce segregation to enforce exclusion and are there ways of rethinking the drawing of these boundaries that would actually also address greater social inclusion and integration here we have to fundamentally think about fiscal policy that is driving the fiscalization of land use and the reliance on property taxes and again not thinking about the elites here but if municipalities didn't stand to benefit whether they built up or not do we get the same dynamic I'm not sure that we would and finally we may think about decommodification very differently but this is all predicated on the fiscalization of property and if we we've had so many indigenous conversations here thinking about differently about what we've out how we value property how we decolonize our governance structures that comes with the decommodification of land as a base property value so looking forward to our discussion as we make the transition does anybody have a question quite a single question yep yep please please one of the things that we're looking at is this very question of where the money comes from and and I think that your your argument sort of suggests that as broad a base of funding as possible is perhaps the best way to equitably provide funding sources to do any number of things in the coastal zone so I'm wondering if you can maybe respond to that whether that's sort of right from your experience but also what what do we mean by changing our officials physical structure and where would it come from if not property taxes those are really great questions and I don't profess to have answers to those kinds of questions and in some ways this is a provocation to get many many spark people thinking about those exact questions I don't know I actually don't know but yes having broader basis and it's not just about taxing industry because if you want to tax the big corporations you require the corporation's to be around to tax so it's a real fundamental question if we try maddy colonizing like what does that mean dee commodifying what does that mean and I think that's a really big space for discussion great thank you very much welcome professor Tedesco joins us here from Lamont thank you so so I this is what you're gonna see it's what happens when you take a polar scientist like me who spends part of his time camping on the ice and study the melting of the ice sheets becoming interested in these topics and I started this collaboration about years ago with people like Richard Moss is sitting here Geoffrey Hill and the School of Economics and people from a first-rate Foundation which is a foundation here in Brooklyn who provided the data I did I'm gonna tell to you the original title of course was pretentious I'm gonna show you some results it I think are very interesting but we're gonna move towards something that it's heavily applied but I hope is gonna stir up a lot of conversation and I'll be around most of the day to you know if you guys want to talk about it I'm gonna focus on hurricane Florence I most of you know details of course I just wanted to remind there was about forty twenty four billion dollars in an estimated damage and about fifty fifty four fatalities and I really like to be honest or one thing that the aspect of the gentleman carry on the woman I think it really exemplifies a lot the situations that could occur and will occur in it's it's extremely powerful as as a message so the outline is really I'm wondering what are the tools that we can use to capture what is the maximum flood extent right so we want a really captured at the maximum flood extent we want to know how far the water reached which properties were attached and how do we do that do we have the tools nowadays after many years and I'm personally I started as a remote sensing person I'd be looking for liquid water into snow packs in in Canada into ice in Greenland so I I decided why not look into water standing on the Carolinas then I'm gonna talk to you about the potential impact of property values by Florence and then I'm gonna move back and doing some sort of time series analysis yeah I think it's extremely powerful and I hope you'll find it interesting so there is a very powerful tool to look at flaws data now and it's Sentinel radar data the European Space Agency has launched two sensors or basket twin sensors they are radar they can see through clouds they can help us mapping the the flood when it happens and ISA has a very strongly targeted program trying to to focus on extreme events when they occur one aspect you see here for example is one thing that you see here is really this is the water that was detected by the Sentinel radar data and this is the one of the images from the ni P doing in Florence you can really see there is a very good matching of course there are problems and issues but the radar that is really the most powerful currently the most powerful sensor to provide observational data during the flood events and especially because you think about it you can have optical data but there's so many clouds that you don't see through things so the one aspect that we looked at is also how can we capture the maximum foulest and what you see there here it's basically this is a time series of a high emitters from from a gauge and and the two vertical lines are the acquisition time of the radar so as you can see we clearly missed the the maximum flaw the maximum height point and this is another point here where actually the peak here is on September 14th but this is the is actually a river gauge where the peak occurred on the 19th and I will show you that I can tell you right now there's some of the tools that FEMA uses of course we're able to capture this peak but they did not capture this so I can see a strong complementary information between the FEMA maps and what radars telling us and so we look at the fema maximum water stand it's a very simple and still elegant technique they take all the tigers and River gauge data they do interpolation they use a hydrodynamic model and they come out with with bass it was estimated to be the maximum flood extent you can download it as a shape file or gdb file and then put it on your GIS software and try to do some analysis right so this is how things look like when you combine the FEMA maps and the radar data the blue is what the radar the red is what famous is and on the right on the top left those are the footprint of your satellite data collecting your images during and before the data just to let you know their radar there is available from 14th to the 19th and you can see there in some regions FEMA is especially in these areas here is not projecting any extent and the reason is because those are mostly rural and agricultural areas the FEMA map is also based on watermarks so people go there and they collect data on where the water height was so they put everything into this hazard model and they come out with with extent so in case you don't have data of water height or somebody wasn't there or the water you know leave any mark like for example agricultural fields you cannot have the kind of information and that's what we're missing so the results you're gonna see are gonna be or they'll be obtained by combining these two information try to maximize the the benefit of using the two the two sensors so this is how and this is what I got from and this is to me as a climate scientist and polar scientists who go there and collect his own data I was very puzzled about the old misconception misinformation and and lack of availability of property value data so if I had to give a shout out here is let's work together to make it more available especially publicly and and those companies who were commercially on this I think there's a lot of room for them to still make profit which is okay but also work together to make the data more available which i think is a basic principle for a scientific democratic decision which is what we are looking for so I also relate the footprint of the hurricane just to give you an idea of how many properties where along the the bullseye when the hurricane Florence arrived and this is telling you the number of properties here along the y axis versus how much they value and this is a very nice normal distribution annoys I'm sorry it's a power-law distribution and it reflects the way things evolved in the most natural way and you'll see that there is a reason why I'm showing this so now the good thing about the data set that i inherited is that they do have also stored the year when the property was built which to me sounds even more interesting than the value itself so this is how the affected area was looking like between 1800 and 1900 there's nothing to be to be surprised this is how things expanded between 1900 and 1950 already World War 2 is over boom so 1950 2000 there's a huge expansion with really no specific direction if you do mean actually you can really it's very funny you can match the expansion of the cities with the lights that the satellite at night they give you it's it's very powerful tool and this is what happens sorry maybe and am I getting a bonus okay and okay and this is what happened between 2008 to 2018 now you might say the time series is much shorter so you have less buildings less properties I'll come back to this in a second now I think the file it might be too heavy for her so one thing that actually we find out is that despite I'm gonna give you the breaking news before okay so this is just a given idea also the distribution of properties over a middle Beach where hurricane Florence arrived between 1800 1900 and X 50 and 50 years and then 2010 18 the dark blue is the permanent water bodies and the light blue is the inundated areas by from our maps and you see clearly that there is a lot of development that was actually built with the recent years before Florence hit on the areas that were being flooded now this is one of the most important slides of that presentation so what I did you take the property values and you assume what will happen if Florence would have occurred in 1900 1920 1930 and so on so in the blue area what really I wanted to see in those two means I got left is the property value expressed in billions of dollars of what is the exposed fairly property value to the flooded by Florence and we go from about a value about 10 billion dollars he started in the 40s it goes up up to about fifty two billion dollars this represents about 11% of the total value of the properties in our database which is about four hundred and fifty billion dollars now of course this related to the new buildings and the constructions and you see here in the top right this is the number of properties built along the different decades you see there is a incredibly exponential field R square is about point ninety eight and then there is a halt here around 2010 I assume the property the house market collapse basically had a play a large role and you have a strong drop between 2010 and 2011 about in the pre-war pre-world War Two in terms of number of buildings still building less doesn't mean less exposure and why if you look at this plot this tells you the total property values as a distance from the ocean in this case but things don't change if you capture they're just at the distance from permanent water bodies in general and you can see for the different periods which are the different curves there is a threshold value of about a thousand meters 1500 meters about which there is no impact anymore and Florence actually the house values impacted by Florence they were up to ten kilometer from the closest permanent body waters and this is also driven strongly by the hard rain's they were falling after after the hurricane but what you see really interesting here is this line which is the property value between 2010 in 2018 even after you cross del Valle you see that the property bed exposed continues to increase even when you reach out those thresholds what does it mean basically in simple terms this implies that even though there were less buildings less properties built between the 2010 2018 period they were all built in proximity of waters and and permanent body water them made them exposure much higher than the buildings that were there before so bottom line greater space board ana it is actually very helpful to to capture the extent of water we cannot capture the maximum water extent but there are this is the only observational tool that will allow us to build a data set that can be used either through machine learning combination with FEMA products to actually build where the flood areas occurred there was a total about fifty four billion dollar value of property exposed during Florence and this value increased from about ten billion dollars in the mid 40s because of new properties built around the ears and also the slowdown of properties after the house crisis in 2008 it really did not help to make the exposure of these properties a less a smaller issue because they were all built nearby the body waters and this made him actually more vulnerable to to the flood I'm happy to learn more from you I hope this is going to be helpful thank you so much for me and thank you again as we make the transition we've one question to lead us off one question yes please thank you very much and please welcome professor also have the observation we need better data even in New York City it's hard to get the good enough data to home values and damage functions to two good computations my collaborator second collaborator is an economist I'm more of a motion scientist physical oceanographer but heck bond is at RAND Corporation and this is funded by NOAA and the title is modeling urban shoreline protection versus retreat across ecosystem services and monetary and human risk I'll only speak briefly about the human risk part but I'll summarize a presentation yesterday that went into that topic so the motivation is that natural capital and ecosystem services that it provides has traditionally been undervalued in the coastal zone benefit cost analysis can include valuation of a range of ecosystems services but typically it's limited to storm damage reduction and that's definitely the case with the Corps of Engineers who struggles to include co-benefits other than storm damage reduction and in the New York City area New York New Jersey area after Hurricane sandy that's been a huge movement toward and a lot of demand for flood mitigation since Hurricane sandy and one thing that seems to be winning out is cross estuary storm surge barriers such as was the case with Boston in the earlier presentation that's being studied there it actually didn't went out there and I study but in New York City for Jamaica Bay New York that's one the one chosen in a draft study by the quarters in here's a storm surge barrier across the inlet was chosen as the best cost most cost-effective solution for flooding retreat was eliminated in that study and now also in a follow-up study it's looking at the whole region so the Jamaica Bay study actually sort of the storm surge barrier solution got punted to a much larger scale regional study so it still isn't planned to be built or funded but it was initially the preferred choice there in this Harbor and tributary study regional for New Jersey New York Harbor area retreat was eliminated early on also or it's not being studied yet and they say that it may be studied in the next phase the goal of our work is to explore and improve methods for incorporating non protective ecosystem service values into these benefit cost analyses hoping for in a wider use in decision-making such as by the Corps just to summarize yesterday's mortality risk reduction paper it's very relevant for the study of retreat it was an idealized modeling study it's a chapter in a dissertation by Fung Lynn Jang my PhD student and and one of the interesting conclusions was just that studying retreat from monthly tidal flooding which we quantify with the hydrodynamic modeling we we see in an idealized landscape with a small neighborhood and then high ground people were treating the high ground that is a better scenario for it's about similar amount of risk reduction to having a berm that blocks the flooding entire up to a certain return period of flood and in the long run the berm just it's not if it's not raised continually with sea level rise then it becomes it becomes less cost less of a solution for mortality risk whereas retreat if it's dynamically occurring in response to increased monthly tidal flooding then that has a long-term benefit that continues if you have that program in place so those that hasn't been applied yet it's it's in draft form with this today's study that I'm going to show the mortality risk component so I won't talk about that more in this presentation an overview of today's presentation we're developing methods for bio economic valuation of natural and nature based features and their interest some services and applying these to a suite of flood adaptation scenarios from other studies for Jamaica Bay in New York City I'm only going to show a few of those scenarios today that make my main points but we've also applied it through other scenarios about six to eight in total we apply simple value transfer methods from other studies and then we also use modeling to have a deeper dive into a few ecosystem services that we know are of a high value in a urban Lindt setting like New York City and these are flood mitigation and hypoxia mitigation and then a work-in-progress that I won't talk about today is today I'm just gonna look at 20 the present-day and 50 years from now I'm not gonna do the full benefit cost analysis or integrating over time into the future but I'm not gonna get into cost but we're just gonna look at benefits today and and in 2065 so the adaptation scenarios I'll show today come from a study that we called in short integrated modeling because it included dynamic modeling of land cover change such as wetland response to sea level rise we look at a 50 year time frame out to 2066 this the two cases from this study were a control creature without action also and then two adaptation concepts which I'll show next it was a very participatory climate adaptation study so the first one is this tentatively selected plan from the draft full report that I mentioned which includes a storm surge barrier as its as its main component for protection or flood risk reduction and also levee systems out to Coney Island and around around Rockaway Peninsula which aren't shown in this map and then there were also rest restoration features that's something the core commonly does it's not including ecosystem service benefit in making the decision here but it does sprinkle them on top of the flood risk reduction plan that comes from gray solutions like surge barriers or levees and then the Attic we in this collaborative study with communities and with with New York City government we also came up with this nature based alternative for consideration which included restoring the wetlands of the bay to in 1974 footprint and also restoring a narrower Inlet which existed in the 1800s and this has this reduces flooding somewhat but isn't you know nothing like the protection of the surge barrier and it also improves water quality so it has multiple benefits in addition to the wetlands being of high value in an urban landscape and so the managed retreat scenario also I'll look at its retreat from monthly tidal flooding if you have high end sea-level rise in this case at twenty sixty six so but one challenge is that there's polluted that we've learned about Jamaica Bay in New York City is there's contaminated soils in all these landfill areas so these areas that require managed retreat in the red dots and basically all the fringing areas including JFK Airport here are built on top of former open water or wetlands and so they're very low-lying and the landfill is contaminated so it's not so easy to say you know let's have retreat and restore and so so it's a it's a big challenge for for urban landscapes we look at a 50-year climate change scenario which is used for the flood risk the wetland mitigation and hypoxia modeling and that's based on work from New York City Panel on Climate Change in particular Radley Hortons work and I'll just keep moving quickly since I have less time than I expected ecosystem so one thing I'm not talking about today is vision maker this is all in this biome based like land cover based ecosystem service valuation is being embedded into a online tool called vision maker and so that's what VM is so we're incorporated in a vision maker so people can we can crowdsource people having their own adaptation designs and we and we use that with this biome based approach the simplistic approach shown here so for example a beach an acre of beach is worth forty thousand dollars this is based on a study it looked at New Jersey so an advantage of the it's easy to understand it's just based on land cover and it addresses the typical ecosystems in this region such as beat beats Inland Wetlands coastal wetlands etc and and so it's based on worldwide data this is what value transfer is you take many studies worldwide and we get an uncertainty in a central estimate of the value for each biome then deep for the deeper dive we're looking at service specific value of flood mitigation with hydrodynamic modeling of floods also adaptation strategies evaluated using the damage model has this and then hypoxia mitigation is valued using also three-dimensional dynamic modeling of the water the estuary and we use a cost avoidance approach so if a particular landscape adaptation choice reduces hypoxia then we say well that can reduce the need to mitigate hypoxia with great traditional techniques such as wastewater treatment or sewer build-out so it's it's in economic terms it's called the cost of voidance approach and it assumes that there's a binding Clean Water Act assumption although clean water acts pretty complicated topic and so the has us going into detail on these that has us this is pretty standard use of houses we run ten different simulations of storms for each sea level rise scenario in each landscape each adaptation landscape we use has this model we computed adaptation benefit some prior papers review those methods shown at the bottom one thing mentioned on the far right is that we don't actually take it to the summing over going through future years we're just looking at twenty sixteen and twenty sixteen and twenty sixty six so we're not doing the full benefit cost analysis yet although we intend to and so the hypoxia mitigation valuation is shown here and it's methods so basically New York City spends six hundred million dollars in the past few decades on reducing nitrogen in wastewater effluent into Jamaica Bay alone and they spend they spend billions of dollars on trying to separate the stormwater and the sanitary sewers so there's huge expenditures on this on improving water quality in urban in an urban context so this should be valued higher than then through the biome based approach which is from any part of the world and so we account for this separately and so based on various additional assumptions we come up with every 1% reduction you get in hypoxic volume with your adaptation approach is valued at 0.2 4 million to 3.8 million per year with a central estimate of 2 million and shown in the bottom rate are some actual modeling results of hypoxia the actual hypoxic volume of area actually in the Bay present-day future without action where it increases significantly and then the to adaptation scenarios interestingly the storm surge barrier actually reduces the hypoxia in the Bay I won't get into the details but it increases it a little bit the nature based approach reduces it even more some of these results are surprising it's why you need to run a dynamic water model to understand some of those to quantify things and so the valuation of the land cover and and based on land cover and also based on these two deep dives into hypoxia and flooding is summarized here on the right shows the land cover map for present day this is just present day right now so the values are 240 to 261 million with the uncertainty range for total values so because system services on the bay most of that comes from flood mitigation but a significant amount from a hypoxia mitigation also and other services and then here's my final result slide so the it shows concept 1 which is the surge barrier corps of engineers tentatively selected plan concept 2 is the nature based approach and then the third approach is retreat you see in terms of the first column flood mitigation benefit in million dollars per year there's a huge loss due to climate impact so negative benefit concept one can counteract that and has a large benefit of reducing flooding concept you only partially protects and so it doesn't not and it doesn't account for all the negative change from sea level rise so it's a smaller number than 97 versus 176 million per and these are in per year values retreat has a better performance so it's ranked one for for the surge barrier two for retreat and three for the nature based adaptation for flood mitigation but when you look at the other the biome based and the hypoxia based benefits you actually change your ordering your rank ordering to where concept to the nature based has a higher value and again this is because we assume no restoration when you have retreat so I think we really should also try the opposite assumption that some that they figure that out they figure out how to deal with contaminated sediments and look at the alternative case of actually having restoration so you can have a switch in the ordering here but it doesn't change the fundamental conclusion that the surge barrier in this specific case because of all its flood protection would be benefit amount in a in 2065 for for the benefits so the final conclusions of which I just mentioned a few of them storm protection is on the order of 80 percent of the total ecosystem value lost to sea level rise coal benefit inclusion is not significant to change number one ranking which is the surge barrier but it does have the potential to switch the ordering of these different options non-productive because system services can be maintained or even improved as you go forward relative to climate change impacts and lastly coastal retreat if there's no restoration it results in no improvement in non protection ecosystem service value and the problem there in an urban landscape is that there's contamination [Applause] it's a powerful body of future research to examine the extent to which ecosystem services are not accounting for the benefits of retreat and I think you highlight what we leave behind and and and have yet to determine do we have one question as we make the transition please well yeah the uncertainties are a big challenge and we've sort of been starting to quantify them through that Leo a tall paper there is a range there's an uncertainty range through storm protection services that were quantifying detail we've come up with ranges in the past and I didn't show them here and so it's definitely you know it's a work in progress the in the hypoxia mitigation it's just like how do I do that you know I came up with a range but it's a big challenge also so I think it's but to your point I think it's critical to admit the uncertainty because it's huge and then if there is a big uncertainty we can't be too frustrated with that because it's better than saying it's worth zero and not accounting for it at all so so that's our philosophy also all right thank you very much Phil I'd like to welcome now dr. Rachel Cletus from the Union Concerned Scientists whose work engaging real estate and climate change has been foundation foundational for both scholarly ambition and public awareness so welcome today I'm going to actually I'm actually wanted to well with this audience of some of the implications of what's at risk from sea level rise the work that I'm presenting is a joint project that I did with a number of colleagues at UC asked we're sort of a mix of expertise I'm an economist by training some of my climate scientist colleagues collaborated and some of the mapping work and what we tried to do was recognize the fact that well before places go underwater completely they will start to get flooded frequently enough they will lead to real changes in people's daily lives and it will certainly affect coastal real-estate values so through some published work we have defined a threshold of 26 times per year or more as threshold where communities when they flooded that threshold will start to see some of these significant changes and we call that are chronic inundation threshold so what we did with this work we've been doing this body of work over a period of years looking at land at risk military bases at risk we looked at some hot spots that have socio-economic challenges and also are exposed to sea level rise and this latest work on the far right share the underwater work is looking taking our chronic inundation methodology and twinning it with property data from Zillow Zillow was not involved in the analysis at all but they provided the data at the property level data for us and we basically our methodology is pretty simple and straightforward I'm gonna skip through it for using tide gauge data at 93 tide gauges and the lower 48 digital elevation models from NOAA and sea level rise projections from NC a3 we focused on the high scenario about 6.6 feet of sea level rise by the end of the century although we do present results for an intermediate about four feet of sea level rise and then one point six feet of sea level rise by the end of the century that we used as a proxy for a Paris agreement type scenario that also assumes we have limited land base ice loss something that the latest science is showing is really unlikely to be the case so to just get to the highlights of our results what we tried to do with this work is really bring this into timeframes that are salient for policymakers and homeowners so the 2045 timeframe well but which is kind of the 30-year mortgage timeframe is the one that we try to focus people on to recognize that this risk is near-term we're not talking about end of century and what we found that is that around the country we have over 300,000 homes that are at risk from sea level rise by 2045 by 2100 that number jumps to 2.4 million homes and you can see that there are places around the country like Florida New Jersey New York California that really pop in terms of the number of homes that are at risk we also evaluated the amount of property at risk in terms of the dollar value and here we find that by 2045 we have nearly 118 billion dollars in today's dollars that is at risk by 2045 and over a trillion dollars by 2100 again in today's property values and then as many folks have pointed out through the course of this conference it's not just about individual homes it's also about communities and the local property tax base so in our results what we find is that by 2045 we've got nearly 1.5 billion in today's property tax base that's at risk from sea level rise and that number jumps to 12 billion by 2100 and this is also about people of course there are people who live in these homes by 2045 we're talking about 550,000 people today assuming no population change from today that are at risk of this chronic flooding and that number jumps to 4.7 million by 2100 again keeping population constant and we know that along our coastline were actually seeing population and property increase over time we also looked at the fact that there are many places where there's a confluence of socio-economic and climate related challenges these are maps for Louisiana and Maryland and the blue dots there show you places that have poverty rates above the national average scaled by the amount of homes at risk Louisiana is one of those places where we see a really high confluence of these places that have folks who are living in poverty but also exposed to this high risk well we did with our results is make them available not just in the traditional report but there's an interactive map that's available online at UCS slash underwater and you can go there and explore the data in different time slices for different sea level rise scenarios we have state-level results this is New York State for example we have them available at the community level which is roughly municipalities towns that type of level and we have it available at the zip code level we do technically have the data at the property level but chose not to release it for a variety reasons we think the data is not completely accurate at that granular level and more importantly it felt that we would be putting the bull's eye on individual homes and didn't didn't want to go there and and the other thing that we did is we did look at a sea level rise scenario that is a little scenario a Paris like scenario and what we wanted to point out as we do still have choices so this for example is a community Toms River in New Jersey and if we were to stay in a Paris like scenario with land-based ice loss limited we could avoid up to 85% of the properties that are exposed to this chronic inundation risk by the end of the century so one of the key things I want to say is that in our conversations around adaptation a key lever we have is mitigation cutting emissions making deep cuts in emissions is critical to helping protect people we have a whole suite of products on our website available there's a map of course we also created this little handy dandy brochure for home prospective homebuyers if you're looking to buy a home or someone you know is looking to buy a home around the coastline to make sure that they're asking the right questions we also released all this data at a congressional district level and we did an expert elicitation with some private financial sector actors as a part of this analysis and that's kind of where I want to dwell we know we've got to do better communicating these risks and hopefully work like ours and work that others have shared in terms of mapping can help to start do that we know we've got to stop doing stupid things as in let's stop putting more people in property at risk let's align our policies and market incentives towards better decision making and finally we really do have to think about some bold bold policies and the governance structures that we'll need to go with that to make sure that they're equitable as I mentioned you got to do the mitigation and the adaptation piece all of it as as quickly as possible as much as possible and we have to be thinking about this yes it's about individual homes that are at risk and those who it's about the communities that are exposed because their property tax base and everything that that property tax base funds it's about banks holding those mortgages people who invest real estate developers and the coastline insurers Realtors and the taxpayer at large as this this problem really starts to become real in the financial markets the reverberations could be considerable especially in some places that are highly exposed as part of our expert elicitation process as I said we spoke to bankers credit rating agencies at that run we asked them a few questions the number one thing nobody denied the science it's real it's absolutely happening the risk is material and yet most of them agreed that the market is not pricing this accurate in fact they all agree the markets not pricing this accurately right now here's Andrew Sarris from Breckenridge talking about one of the reasons the mismatch in the time horizons between the way market actors tend to think in the way some of these risks are coming I would say that this mismatch is collapsing in time right now because actually the risks are real we're already seeing the flooding in places that have a lot of expensive property this is from S&P global ratings course been talking about the need for uniform transparent disclosure he says by governments obviously we need this risk disclosure by everybody including private sector actors so that the risk can be accurately priced in the market this is from Judas at Bentall Kennedy there are big commercial holdings commercial property holdings company and again saying that the risk is real it's gonna be material for commercial property values and this is a really long quote from Roger Grenier from AI R they do catastrophe modeling the reason I put it all up there is this just gives you a little insight into it the way the private sector is thinking about how this risk might materialize in the market so everybody said you know it's real and in some places it's not a question of if it's just a question of when so what is that thing that is going to make the market shift and you can see the the things that we've been talking about you're in this conference come up it's insurance what happens in the insurance market it about are there going to be regulatory changes including around adaptation and resilience but also around disclosure perhaps there there is SP and Moody's are both set that they're going to start taking this into account and their credit ratings we haven't actually seen them really D rate any particular community around this climate risk but should that start to become real that is also a factor and then finally the thing that folks have been talking about is it going to be a a signal event or a series of signal events like major storms coming one after the other we did actually have a series of storms in 2017 that was a pretty devastating year for hurricanes and yet the market hasn't shifted so what what I and this is sort of a set of headlines related to our study I know there been many studies like this but I I just I guess where I want to leave this is that there is all this information out there there are all these folks who know that this risk is real and it's coming and it's almost like there's a it's some kind of a denial or a conspiracy of silence around the implications of what these risks are it's almost like everyone's afraid of dropping that first domino because then everything starts to go and I would say the biggest thing holding people back is that we have not given people options it's not just about property values falling it's the what happens next that's important what are the options we're gonna give homeowners to get out of there where are they gonna go where are we investing in so that people can see the opportunity not just the retreat but where you're gonna go I work in the space of clean energy and climate and for me there's a lot of analogies with what we say to coal dependent communities today it's not just about you're gonna lose your job and this industry is going away how are we gonna help fund transition assistance so that there is a brighter future in those communities and I think until we make those options concrete through government policy and I think government has a huge role to play here along the alongside the private sector the private sector could be investing in these places building infrastructure building new places for people to go to I think we'll continue to have the sort of you know ostrich put their head in the sand kind of approach and that is deeply deeply dangerous because in some places when the market decides to shift it's gonna be devastating for individual homeowners especially those who are low-income fixed-income elderly folks who have retired and you know this is their single biggest asset so hopefully the conversations like we're having here are ones that will unlock this conversation in the wider world and if we create those options I think there will be some willingness and people to shift and stop avoiding these realities thank you a question as we transition please I just wanted to ask you to talk a little bit more about the decision not to put the bull's eye on individual properties and your risk maps and do it by zip code instead I think I understand might be individual houses maybe too inaccurate and I appreciate that but zip code may not be the right sort of districting for that maybe a school tax school basically districts would be a better way but I wonder if you could talk a little more about it because yesterday in the panels on communication of climate change risk specifically was voiced that once individual granule data is available to homeowners they it stimulates the conversation and community action yeah I you know we had a variety of reasons as I mentioned I to me also I think that the the most important thing to recognize is while this is coming to bear on individual homes the responsibility is a collective national even international frankly but national responsibility and oftentimes when you release data on individual homes people go to this place where it's about that homeowner and what are they going to do are they going to leave are we going to have to keep bailing them out and actually it's a question of so how they're there through no choice of their own right on the front line of this risk how are we as a nation going to come together to figure out the policies and what we wanted to do with our data is just show this is happening all around the country yes it's happening to individual homes in particular communities but happenings in so many places in the country that it's it's no longer going to be enough to talk about moving individual property owners from where they are we really have to be talking about this in a more holistic way so there will be others you know just last week there was an article in the insurance Journal saying that a consortium of scientists and for Street Foundation are going to be releasing this data the individual property level and I think you know on one hand I love the idea of the communication of the risk and my heart sank a bit because I thought oh my god we don't have the policies people are going to see their homes in the bull's eye and we don't have the policies and the help so I hope we can do these things together communicate the risk but also give people the options about what to do about it great thank you very much I'd like to welcome an emerging scholar joining us from victoria university of wellington Melinda's story thank you for having I'm coming we're thinking about miles I was very quick to put my hand up and offered to go in his place so what I'm presenting here today was inspired by Katherine Rogers 2017 paper that looked at the socio-political vectors that impede or promote miniature treat and what we wanted to look at is what is the from an economic perspective what are the attributes that will determine where the funding comes from this isn't about where the funding should come from but where we anticipate the funding will come from and in doing that we used a case study of one of the largest managed retreat processors and a developed country it's to do with a earthquake risk but we think that these are important listens as far as climate change is concerned following the Christchurch earthquake in New Zealand in 2017 this happened in February I happened to be involved present when there was an earlier one where there were no fatalities I was on the 26th floor of a building that subsequently was demolished but at the time there were no fatalities and we all felt very smug in New Zealand about our building codes then in February we unfortunately had the tragedy of a hundred and eighty-five lives being lost in the Christchurch City I'll talk about a little bit more detail of that but in the broad concepts that we looked at is thinking about whether there is public versus private interest and how what the probability of the risk is and what you'll find when we when I talk further about this is that how does that change when the risk itself is changing so in the first quadrant we can think about a publicly insured risk so this is something similar to the National Flood Insurance Program in the UK they've currently stepped recently stepped in with flood jury to provide insurance in the flooding area because private insurers have withdrawn from that and in New Zealand disaster insurance is provided by the earthquake Commission but also potentially providing support and storms and floods quadrant B where there is a very as the risk becomes much more probable chances our insurance has already retreated but there are public legal obligations and certainly there are moral liabilities something that we talked about charity hazard that there is extremely difficult for public officials to deny support to locations where a disaster has occurred in quadrant C we talk about private insurer private risk risk we private the it is privately insured and in quadrant D is a location where the risk has retreated so the insurance has retreated in the end there was no no longer inability to transfer risk from the property owners so Christ yet City this is the aftermath of a of the retreat in the Christchurch earthquake it was exceptionally high in levels of insurance because of that we had both public insurance and private insurance the cost of rebuilding Christchurch City was about 26 billion and US dollars one hundred and seventy thousand homes experienced claims it was three-quarters of the of the entire region's residential stock if this was an area the the probability of risk in this location was expected to be quite low which was partly why the insurance level was so high by comparison the overall insurance level in Christchurch was 69 percent that included visiting two commercial property when you compare that to the Japan 2011 earthquake the the level of insurance was only 19 percent so New Zealand enjoys very high insurance rates what happened was 8,000 homes were what was called Redd's owned about 20,000 individuals and this is a sample of the the subject one of the suburbs that was relocated you'll notice that it's near a water line that wasn't because of flooding this was because of liquefaction so for those who aren't familiar with liquefaction the ground gets very squishy and buildings can sink into the sand or sink into the soil the cost of repairing that soil to the standard to be able to put a house back on top of it was so great that the government stepped in and said this is something that we're going to be seeking this large-scale managed retreat from an important finding that we have from the insurance perspective here is they were a handful of individuals who didn't have insurance there my colleague Illinois has undertaken research and it's interesting that those who were had full insurance had the best benefit economic benefit after a period of time those who had insurance but ended up fighting with their insurer to get the payout were actually worse off than individuals who had no insurance those individuals with no insurance were able to move on get other jobs to relocate and they weren't stuck in broken houses the economic benefits outcomes for them were better than those who had insurance but entered into lengthy disputes with them insurers a comparison is this is a location in the UK in North Wales they have a large proportion of the England and Wales coast is fortified this historically and there's a decision that was made to reinforce the coastal defences but there was a recognition at that point that the local council wasn't going to be able to undertake the next level of investment so they notified the homeowners that they would no longer be defending us they expected the existing defenses to last for a period of time and they gave notice that they would be looking for a decommissioning of the location at this stage there was no compensation that has been provided to any of the individuals here insurance has immediately been lost there has been a drop in property values but it's not as steep as people anticipated and for those who attended my talk earlier it's aligned with the model that we had there it's about 40% reduction and property values that people are continuing to live there in the meantime to give you a complaint point of comparison the cost of defending this location which has about 850 residents would be about a hundred and fifty million dollars the cost per resident would be about 100 times the cost of defending the average resident in London with the team's barrier so there is an element of what they per capita cost of the defences and that certainly comes into it so looking at how that can play out in the Christchurch situation a large proportion of the the relocation costs were covered by private insurers and that is because we had public insurance which helped bolster the level of penetration and the in the area we also have an all perils approach and me zealand which I accept is is unusual and there was private insurers we have been able to head higher high penetration when the event occurred there was a collective decision made in part probably because of the the trauma of experiencing the number of fatalities the community came together and accepted that this the New Zealand government made interesting introduces immediate changes to laws to have to be able to provide for some of us but we look at the case of fear born they are currently the risk is primarily individual aims that is can't that is there is an expectation that that will be borne by the individual borne by those individual homeowners however in time we can expect that because of this expectation of government support of those in a dangerous location there is likely to become a moral liability to steepen but the point they will already have been significant losses by those homeowners you would argue that they were already experienced at 40% loss and value already over time they will experience more but there may be some demands for compensation when the major event occurs so I'd like to welcome all of our presenters to join us up front for a conversation with the balance of our time actually for everybody here now it's a good time to get up and stretch because we've been sitting here for a while so those who are able please take the opportunity to get some blood flow because we need to get our brains going for those last 30 minutes if somebody wants to join me here in this spot because I think we have a pretty oh we have a chair here oh we do end at 12:30 not one o'clock oh okay so in the last five minutes all right sorry I have misappropriated time we've got five minutes let's go with Radley in the back for our first question yeah you know I think for a lot of private sector actors there's still a sense that their portfolios are diversified enough that any individual event is not going to be you know catastrophic in that sense but this is what's starting to change we're starting to see that hypothetical is not a hypothetical we had a terrible fire season and a terrible hurricane season and we're seeing terrible floods right now and you know right through the Midwest in the central part of the country so once this starts to happen you you you know the past is not going to be a good predictor of the future and then you have those entities that are very tied up in local economy so if you are in the Florida market and you're a regional bank a small bank or if you're an insurer who works in a particular jurisdiction like that this could be a big part of your portfolio so and for the taxpayer we're implicated all over the country so whether it's through mortgages that are federally backed or it's through firefighting costs we are implicated at the end fit and so I think it's time to do things differently now the data is not just data it's reality at this point cloth yep yep yep yep real quick please please please and just one word kind of to where your question when is absolute risk is probably not as important as perception of risk right whether correlated or not yeah closet if I could add to that when we think about the societal tolerance of risk sometimes major events in one part of the world can significantly change policy elsewhere so there the most recent example would be the Queen Greenfeld fire in London but have significantly changed the reviews around building micki elections all around the world as far as as far afield as Australia in New Zealand and if we think about more close to home the the Shirtwaist Fire in New York and the early last century they had a significant impact on regulations unfortunately the tragedy is these seems to me to be a significant loss of life before you keep those policy changes but they do apply well outside the area that the curves this is a common in context of Belinda's presentation it's probably interesting to note that New Zealand is an anomaly in terms of its insurance it started out of war insurance where New Zealand decided that if there's any impact of War World War two on the population they would get paid for in that public consensus then translated into hazards and here we have only national flood insurance which wasn't really to protect the home owners that was trying to protect the banks for mortgages we have separate fire insurance and other things on so it's this mentality is entirely different and shows the influence of government on the economic impacts the insurance quick so the question is what can we do in terms of policy proposals to change our mentality here in this country in the insurance context anybody low-hanging fruit Mike please so I think the idea macro change to mentality might be and what's more likely as well I think that there's some debate as to thresholds and perhaps more precisely tipping points and valuation within asset classes where you could see a rapid devaluation I mean that's some of the conventional thinking at least in the property market so it's somewhat debatable question please please please so Rachel I want to at least continue this conversation of not providing site-specific information because in some ways I think were avoiding the hard truth that's exactly what we need to be providing not only to markets but to homeowners so I appreciate that you didn't do it we haven't done it on the work that we're doing but we are moving in that direction and I ultimately think if we're going to be serious about sort of the risk and the vulnerability we need to share this with communities so I'm wondering moving forward do you see doing this even though it puts the individual property owner in a position the question is will the seawall protect us and we we've answered those hard questions too about the time limitations around some of these adaptation measures people tend to think that they have analyzed the distinction between being methodological II and actually sound as well please hi my question is for Marco and and Linda so Marco you made a point about house or the new new builds in North Carolina where in areas that were particularly vulnerable and then Linda made the point about this kind of perverse economic percent is incentives because you have these tax bases that need to be built up by having income from these kinds of things so how and should should do we have governmental mechanisms for zoning of increased density or for new builds and how can we avoid this pitfall of building more vulnerable because that creates knowledge that can be used for making decisions studies show that after more storms people that don't believe climate change continue to not believe climate change this is just weather so I want to put that out there but to your question I think that there are certainly changes that we can make in building practices and upzoning and changes to zoning and the whole move with many cities questioning single-family house zoning provides new opportunities and spaces to discuss that but the reality also is a lot of our metropolitan regions every metropolitan region is country and that means every municipality tends to be really small so for many coastal municipalities there is nowhere else that you can realistically move to and so that presents a challenge unless you start changing or realigning or merging and on that point I think there are lots of places that could have more investment and a lot of them tend to be in unis places communities of color so the real thing we want is for those people and so how do we posit this not as we're going to be kicked out and white people are going to move in but how do we have a stake in ownership rate well listen we're bleeding into lunch time thank you all for your patience and thank you for attending today and thank you to our panelists [Applause]

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