Tuesday, November 29, 2016

The End of the Anglo-American Order By Ian Buruma

One of the strangest episodes in Donald Trump’s very weird campaign was the appearance of an Englishman looking rather pleased with himself at a rally on Aug. 24 in Jackson, Miss. The Englishman was Nigel Farage, introduced by Trump as “the Man Behind Brexit.” Most people in the crowd probably didn’t have a clue who Farage — the leader of the United Kingdom Independence Party — actually was. Yet there he stood, grinning and hollering about “our independence day” and the “real people,” the “decent people,” the “ordinary people” who took on the banks, the liberal media and the political establishment. Trump pulled his face into a crocodile smile, clapped his hands and promised, “Brexit plus plus plus!”
Brexit itself — the decision to withdraw Britain from the European Union, notwithstanding the almost universal opposition from British banking, business, political and intellectual elites — was not the main point here. In his rasping delivery, Trump roared about Farage’s great victory, “despite horrible name-calling, despite all obstacles.” Quite what name-calling he had in mind was fuzzy, but the message was clear. His own victory would be like that of the Brexiteers, only more so. He even called himself Mr. Brexit.
Many friends and experts I spoke to in Britain resisted the comparison between Trumpism and Brexit. In London, the distinguished conservative historian Noel Malcolm told me that his heart sank when I compared the two. Brexit, he said, was all about sovereignty. British democracy, in his view, would be undermined if the British had to abide by laws passed by foreigners they didn’t vote for. (He was referring to the European Union.) The Brexit vote, he maintained, had little to do with globalization or immigration or working-class people feeling left behind by the elites. It was primarily a matter of democratic principle.
Malcolm seemed to think that Brexit voters, including former industrial workers in Britain’s rust-belt cities, were moved by the same high-minded principles that had made him a convinced Brexiteer. I had my doubts. Resentment about Polish, Romanian and other European Union citizens coming to Britain to work harder for less money played an important part. As did the desire to poke the eye of an unpopular elite, held responsible for the economic stagnation in busted industrial cities. And the simple dislike of foreigners in Britain should never be underestimated.
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In the United States, too, I found resistance to the idea that Brexit was a harbinger of a Trump victory. I was assured over and over by liberal friends that Trump would never be president. American voters were too sensible to fall for his hateful demagogy. Trump, I was told, was a product of peculiarly American strains of populism that flare up periodically, like the anti-immigrant nativism in the 1920s or Huey P. Long in 1930s Louisiana, but would never reach as far as the White House. Traditional American populism of this kind, directed at the rich, bankers, immigrants or big business, could, in any case, not be usefully compared with English hostility to the European Union, because there was no supranational political union the United States belonged to.
And yet Trump and Farage quickly recognized what they shared. In Scotland, where Trump happened to be reopening a golf resort the day after the Brexit vote, he pointed out the parallels. Brexit, Trump said to the Scots who voted overwhelmingly against it, was “a great thing”: The British had “taken back their country.” Phrases like “sovereignty,” “control” and “greatness” fired up the crowds in both Trump’s and Farage’s campaigns. You might think they meant something different by those words. Farage and his allies, many of them English nationalists, wanted to wrest national sovereignty from the European Union. But from whom or what does Trump want to take his country back? Trump has gestured at the International Monetary Fund and the World Trade Organization as noxious elements run by international elites to the detriment of the American working man. But I can’t imagine that these institutions fill most of his followers with rage.
In fact, most international institutions, including the I.M.F. and NATO, were set up under American auspices, to promote the interests of the United States and its allies. European unification, and the resulting European Union, too, have not only been approved of but also vociferously encouraged by American presidents before Trump. But his America First sentiments — for that is what they are at this point, more than a policy — are hostile to these organizations. And so, by and large, are the likes of Nigel Farage.
So Farage and Trump were speaking about the same thing. But they have more in common than distaste for international or supranational institutions. When Farage, in his speech in Jackson, fulminated against the banks, the liberal media and the political establishment, he was not talking about foreign bodies but about the aliens in our midst, as it were, our own elites who are, by implication, not “real, “ordinary” or “decent.” And not only Farage. The British prime minister, Theresa May, not a Brexiteer before the referendum, called members of international-minded elites “citizens of nowhere.” When three High Court judges in Britain ruled that Parliament, and not just the prime minister’s cabinet, should decide when to trigger the legal mechanism for Brexit, they were denounced in a major British tabloid newspaper as “enemies of the people.”
Trump deliberately tapped into the same animus against citizens who are not “real people.” He made offensive remarks about Muslims, immigrants, refugees and Mexicans. But the deepest hostility was directed against those elitist traitors within America who supposedly coddle minorities and despise the “real people.” The last ad of the Trump campaign attacked what Joseph Stalin used to call “rootless cosmopolitans” in a particularly insidious manner. Incendiary references to a “global power structure” that was robbing honest working people of their wealth were illustrated by pictures of George Soros, Janet Yellen and Lloyd Blankfein. Perhaps not every Trump supporter realized that all three are Jewish. But those who did cannot have missed the implications.
When Trump and Farage stood on that stage together in Mississippi, they spoke as though they were patriots reclaiming their great countries from foreign interests. No doubt they regard Britain and the United States as exceptional nations. But their success is dismaying precisely because it goes against a particular idea of Anglo-American exceptionalism. Not the traditional self-image of certain American and British jingoists who like to think of the United States as the City on the Hill or Britain as the sceptered isle splendidly aloof from the wicked Continent, but another kind of Anglo-American exception: the one shaped by World War II. The defeat of Germany and Japan resulted in a grand alliance, led by the United States, in the West and Asia. Pax Americana, along with a unified Europe, would keep the democratic world safe. If Trump and Farage get their way, much of that dream will be in tatters.


CreditPhoto illustration by Maurizio Cattelan and Pierpaolo Ferrari

In the years when most of Europe was overrun by the Nazis or fascist dictatorships, the Anglo-American allies were the last hope of freedom, democracy and internationalism. I grew up in the world they shaped. My native country, the Netherlands, was freed in 1945, six years before I was born, by British and North American troops (with the help of some very brave Poles). Those of us with no direct memories of this had still seen movies like “The Longest Day,” about the Normandy landings. John Wayne, Robert Mitchum and Kenneth More and his bulldog were our liberating heroes.
This was, of course, a childish conceit. For one thing, it left out the Soviet Red Army, which liberated my father, who was forced to work in a factory in Berlin along with other young men who, under German occupation, refused to sign a loyalty oath to the Nazis. But the victorious Anglo-Saxon nations, especially the United States, largely shaped the postwar Western world we lived in. The words of the Atlantic Charter, drawn up by Churchill and Roosevelt in 1941, resonated deeply throughout a war-torn Europe: Trade barriers would be lowered, peoples would be free, social welfare would advance and global cooperation would ensue. Churchill called the charter “not a law, but a star.”
Pax Americana, in which Britain played the role of special junior partner, whose specialness was perhaps more keenly felt in London than in Washington, was based on a liberal consensus. Not only NATO, set up to protect Western democracies, chiefly against the Soviet threat, but also the ideal of European unification were born from the ashes of 1945. Many Europeans, liberals as well as conservatives, believed that only a united Europe would stop them from tearing their continent apart again. Even Winston Churchill, whose heart was more invested in Commonwealth and Empire, was in favor of it.
The Cold War made the exceptional role of the victorious allies even more vital. The West, its freedoms protected by the United States, needed a plausible counternarrative to Soviet ideology. This included a promise of greater social and economic equality. Of course, neither the United States, with its long history of racial prejudice and occasional fits of political hysteria, like McCarthyism, nor Britain, with its tenacious class system, ever quite lived up to the shining ideals they presented to the postwar world. Nonetheless, the image of exceptional Anglo-American liberty held up, not only in countries that had been occupied during the war but in the defeated nations, Germany (at least in the western half) and Japan, as well.
America’s prestige was greatly bolstered not just by the soldiers who helped liberate Europe but also by the men and women back home who fought to make their society more equal and their democracy more inclusive. By struggling against the injustices in their own country, figures like the Rev. Dr. Martin Luther King Jr. or the Freedom Riders or indeed President Obama kept the hope of American exceptionalism alive. As did the youth culture of the 1960s. When Vaclav Havel, the Czech dissident playwright and later president, hailed Frank Zappa, Lou Reed and the Rolling Stones as his political heroes, he was not being frivolous. Under communist oppression, the pop music of America and Britain represented freedom. Europeans born not long after World War II often professed to hate the United States, or at least its politics and wars, but the expressions of their hostility were almost entirely borrowed from America itself. Bob Dylan received this year’s Nobel Prize for literature, not least because the Swedish jury of baby boomers grew up with his words of protest.

No doubt Trump and Farage regard Britain and the United States as exceptional nations. But their success is dismaying precisely because it goes against a particular idea of Anglo-American exceptionalism.

The ideal of exceptional Anglo-Saxon liberties obviously goes back much further than the aftermath of Hitler’s defeat, let alone Bob Dylan and the Stones. Alexis de Tocqueville’s admiring account of American democracy in the 1830s is well known. Much less famous are his writings on Britain in the same period. Born soon after the French Revolution, Tocqueville was haunted by the question of why Britain, with its mighty aristocracy, was spared such an upheaval. Why did the British people not rebel? His answer was that the social system in Britain was just open enough to allow a person to hope that with hard work, ingenuity and luck, he could rise in society. The British version of the American dream: “The Great Gatsby” may be the great American novel, but Gatsby could have existed in Britain too.
In practice, there were probably not all that many rags-to-riches stories in 19th-century Britain. But the fact that Benjamin Disraeli, the son of Sephardic Jews, could become prime minister, and an earl, no less, provided the basis for many generations in Europe to believe in Britain as an exceptional country. Jews from Russia or Lithuania, or from Germany, like my own great-grandparents, flocked to Britain as immigrants in the hope that they, too, could become English gentlemen.
Anglophilia, like the American dream, may have been based on myths, but myths can be potent and long-lasting. The notion that sufficient effort and talent can beat the odds has been especially important in Britain and the United States. Anglo-American capitalism can be harsh in many ways, but because free markets are receptive to new talent and cheap labor, they have spawned the kind of societies, pragmatic and relatively open, where immigrants can thrive, the very kind that rulers of more closed, communitarian, autocratic societies tend to despise.
Wilhelm II, kaiser of Germany until 1918, when his country was defeated in the First World War, which he had done his best to unleash, was such a figure. Half English himself, he called England a nation of shopkeepers and described it as “Juda-England,” a country corrupted by sinister alien elites, where money counted more than the virtues of blood and soil. In later decades, this kind of anti-Semitic rhetoric was more often aimed at the United States. The Nazis were convinced that Jewish capitalists ruled America, not just in Hollywood but in Washington and, naturally, New York. This notion is still commonly held, though less in Europe than in the Middle East and some parts of Asia. But talk about “citizens of nowhere,” sinister cosmopolitan elites and conspiratorial bankers fits precisely in the same tradition. A terrifying irony of contemporary Anglo-American populism is the common use of phrases that were traditionally used by enemies of the English-speaking countries.
Yet even those who don’t go along with the kaiser’s loathsome words recognize that liberal economics, as practiced since the middle of the 19th century in Britain and the United States, has a darker side. It does not allow for much redistribution of wealth or protection of the most vulnerable citizens. There have been exceptions: Roosevelt’s New Deal, for instance, or Britain’s postwar Labor government under Clement Attlee, which created free national health care, built better public housing, improved education and guaranteed other blessings of the welfare state. British working-class men who risked their lives for their country during the war expected no less. On the whole, however, Britain and the United States have, compared with many Western countries, generally set greater store on individual economic freedom than on the ideal of egalitarianism. And nothing creates such swift and radical social change as unfettered free enterprise.


CreditPhoto illustration by Maurizio Cattelan and Pierpaolo Ferrari. Map: Rand McNally.

The Reagan-Thatcher revolution in the 1980s — deregulating financial services, closing down coal mines and manufacturing plants and hacking away at the benefits of the New Deal and the British welfare state — was regarded by many conservatives, on both sides of the Atlantic, as a triumph for Anglo-American exceptionalism, a great coup for freedom. Europeans outside Britain were more skeptical. They tended to see Thatcherism and Reaganomics as ruthless forms of economic liberalism, making some people vastly richer but leaving many more out in the cold. Nonetheless, in order to compete, many governments began to emulate the same economic system.
That this happened at the end of the Cold War was no coincidence. The collapse of Soviet communism was celebrated, rightly, as the final liberation of Europe. Countries, left behind on the wrong side of the Iron Curtain after World War II, were free at last. The first President Bush spoke about the “new world order,” led by the only superpower left standing. The Reagan-Thatcher revolution appeared to have triumphed.
But the end of communism in the West also had other, less desirable consequences. The horrors of the Soviet empire tainted other forms of leftism, including social democratic ideals, which in fact had been anti-communist. Even as the “end of history” was declared and the Anglo-American liberal democratic model was expected to be unrivaled forever, many began to believe that all forms of collectivist idealism led straight to the gulag. Thatcher once declared that there was no such thing as society, just individuals and families. People had to be forced to take care of themselves.
Radical economic liberalism did more to destroy traditional communities than any social-democratic governments ever did. Thatcher’s most implacable enemies were the miners and industrial workers. The neoliberal rhetoric was all about prosperity “trickling down” from above. But it never quite worked out that way. Those workers and their children, now languishing in impoverished rust-belt cities, received another blow in the banking crisis of 2008. Major postwar institutions, like the I.M.F., which the United States set up in 1945 to secure a more stable world, no longer functioned properly. The I.M.F. did not even see the crisis coming. Large numbers of people, who never recovered from the crash, decided to rebel and voted for Brexit — and for Trump.
Neither Brexit nor Trump are likely to bring great benefits to these voters. But at least for a while, they can dream of taking their countries back to an imaginary, purer, more wholesome past. This reaction is not only sweeping across the United States and Britain. The same thing is happening in other countries, including some with long liberal democratic traditions, like the Netherlands. Twenty years ago, Amsterdam was seen as the capital of everything wild and progressive, the kind of place were cops openly smoke pot (another myth, but a telling one). The Dutch thought of themselves as the world champions of racial and religious tolerance. Of all European countries, the Netherlands was the most firmly embedded in the Anglosphere. Now the most popular political party, according to the latest polls, is led practically as a one-man operation by Geert Wilders, an anti-Muslim, anti-immigrant, anti-European Union firebrand who hailed Trump’s victory as the coming of a “patriotic spring.”

‘Taking back our country’ means a retreat from the world that Anglo-Americans envisioned after 1945. English nationalists have opted for a modern version of Splendid Isolation. Trump wants to put America First.

In France, Marine Le Pen, who shares Wilders’s enthusiasm for Trump, might be the next president. Poland and Hungary are already ruled by populist autocrats who reject the kind of liberalism that Eastern European dissidents once struggled so hard to achieve. Norbert Hofer, a man of the far right, could become the next president of Austria.
Does this mean that Britain and the United States are no longer exceptional? Perhaps. But I think it is also true to say that the very idea of Anglo-American exceptionalism has made populism in those countries more potent. The self-flattering notion that the Western victors in World War II are special, braver and freer than any other people, that the United States is the greatest nation in the history of man, that Great Britain — the country that stood alone against Hitler — is superior to any European let alone non-European country has not only led to some ill-conceived wars but also helped to paper over the inequalities built into Anglo-American capitalism. The notion of natural superiority, of the sheer luck of being born an American or a Briton, gave a sense of entitlement to people who, in terms of education or prosperity, were stuck in the lower ranks of society.
This worked quite well until the last decades of the last century. Not only were the fortunes of working- or lower-middle-class people in Britain beginning to dwindle compared with those of the rich, who were steadily getting richer, but it gradually became clear even to the most insular Britons that they were doing much worse than the Germans, the Scandinavians and the Dutch, worse even than the French, Britain’s oldest rivals. One way of venting their rage was to fight in soccer stadiums, taunting German fans by mimicking British bombers and bellowing slogans about winning the war.
The so-called football hooligans remained an embarrassing minority, but there were other ways to express the same feelings. The European Union, for which most British people had never felt a great love, actually made many parts of Britain more prosperous. The blight of the old industrial cities and mining towns was not a result of European Union policies. But it was easy for “Euro-skeptics” to deflect popular attention from domestic problems by blaming foreigners who were supposedly running the show in Brussels. Europhobes liked to claim that “this was not why we fought the war.” The specter of not just Hitler but also Napoleon was sometimes evoked. Spitfires and talk of Britain’s finest hour made a rhetorical comeback in the UKIP campaign to leave Europe. Some pro-Brexit politicians even praised the greatness of the British Empire. “Taking back control” by leaving the European Union is not going to make most people in Britain more prosperous. The contrary is more likely to be true. But it takes the sting out of relative failure. It feeds the desire to feel exceptional, entitled, in short, to be great again.
Something similar has happened in the United States. Not only were even the least privileged Americans told that they lived in God’s own country, but white Americans, however impoverished and undereducated, had the comforting sense that there was always a group beneath them, who did not share their entitlement, or claim to greatness, a class of people with a darker skin. With a Harvard-educated black president, this fiction became increasingly difficult to sustain.


CreditPhoto illustration by Maurizio Cattelan and Pierpaolo Ferrari. Map: Rand McNally.

Trump and the leaders of Brexit had a fine instinct for these popular feelings. In a way, Trump is a Gatsby gone sour. He played on the wounded pride of large communities and inflamed the passions of people who fear the changes that make them feel abandoned. In the United States, this brought out old strains of nativism. In Britain, English nationalism is the main force behind Brexit. But in both cases, “taking back our country” means a retreat from the world that the Anglo-Americans envisaged after 1945. English nationalists have opted for a modern version of Splendid Isolation (paradoxically, a term coined to describe British foreign policy under Benjamin Disraeli). Trump wants to put America First.
Brexit Britain and Trump’s America are linked in their desire to pull down the pillars of Pax Americana and European unification. In a perverse way, this may herald a revival of a “special relationship” between Britain and the United States, a case of history repeating itself not exactly as farce but as tragi-farce. Trump told Theresa May that he would like to have the same relationship with her that Ronald Reagan had with Margaret Thatcher. But the first British politician to arrive at Trump Tower to congratulate the president-elect was not the prime minister or even the foreign secretary, Boris Johnson, but Nigel Farage.
Trump and Farage, beaming like schoolboys in front of Trump’s gilded elevator, gloated over their victories by repeating the same word that once made their respective countries exceptional: “freedom.” In the privacy of Trump’s home, Farage suggested that the new president should move Winston Churchill’s bust back into the Oval Office. Trump thought this a splendid idea.
A month before Trump’s election and three months after the Brexit vote, I visited the great military historian Sir Michael Howard at his home in rural England. As a young man, Howard fought the Germans as an officer in the British Army. He landed in Italy in 1943 and took part in the decisive battle of Salerno, for which he was awarded the Military Cross. John Wayne and Kenneth More were a fantasy. Sir Michael was the real thing. He is 95 years old.
After lunch at a local pub, just a few miles from where my grandparents used to live, we talked about Brexit, the war, American politics, Europe and our families. The setting could not have been more English, with the pale autumn sun setting over the rolling hills of Berkshire. Like my great-grandparents, Sir Michael’s maternal grandparents were German Jews who moved to England, where they did very well. Like mine, his family of immigrants became utterly British. In addition to being Regius professor of history at Oxford University, Howard taught at Yale. He knows America well and has no illusions about the “special relationship,” which he believes was invented by Churchill and was always much overblown.
Sitting in his drawing room, with books piled up around us, many of them about World War II, I wanted to hear his thoughts on Brexit. He replied in a tone of resigned melancholy more than outrage. Brexit, he said, “is accelerating the disintegration of the Western world.” Contemplating that world, so carefully constructed after the war he fought in, he said: “Perhaps it was just a bubble in an ocean.” I asked him about the special Anglo-American relationship. “Ah, ‘the special relationship,’ ” he said. “It was a necessary myth, a bit like Christianity. But now where do we go?”

Where indeed? The last hope of the West might be Germany, the country that Michael Howard fought against and that I hated as a child. Angela Merkel’s message to Trump on the day after his victory was a perfect expression of Western values that are still worth defending. She would welcome a close cooperation with the United States, she said, but only on the basis of “democracy, freedom and respect for the law and the dignity of man, independent of origin, skin color, religion, gender, sexual orientation or political views.” Merkel spoke as the true heiress of the Atlantic Charter.
Germany, too, once thought it was the exceptional nation. This ended in a worldwide catastrophe. The Germans learned their lesson. They no longer wanted to be exceptional in any way, which is why they were so keen to be embedded in a unified Europe. The last thing Germans wanted was to lead other countries, especially in any military sense. This is the way Germany’s neighbors wished it as well. Pax Americana seemed vastly preferable to a revival of German exceptionalism. I still think so. But looking once more at that photograph of the Donald and Farage, baring their teeth in glee, thumbs held high, with the gold from the elevator door glinting in their hair, I wonder whether Germany might not be compelled to question a lesson it learned a little too well.

Friday, November 25, 2016

Perils of Climate Change Could Swamp Coastal Real Estate

By Ian Urbina: MIAMI — Real estate agents looking to sell coastal properties usually focus on one thing: how close the home is to the water’s edge. But buyers are increasingly asking instead how far back it is from the waterline. How many feet above sea level? Is it fortified against storm surges? Does it have emergency power and sump pumps?
Rising sea levels are changing the way people think about waterfront real estate. Though demand remains strong and developers continue to build near the water in many coastal cities, homeowners across the nation are slowly growing wary of buying property in areas most vulnerable to the effects of climate change.
warming planet has already forced a number of industries — coal, oil, agriculture and utilities among them — to account for potential future costs of a changed climate. The real estate industry, particularly along the vulnerable coastlines, is slowly awakening to the need to factor in the risks of catastrophic damage from climate change, including that wrought by rising seas and storm-driven flooding.
But many economists say that this reckoning needs to happen much faster and that home buyers urgently need to be better informed. Some analysts say the economic impact of a collapse in the waterfront property market could surpass that of the bursting dot-com and real estate bubbles of 2000 and 2008.
The fallout would be felt by property owners, developers, real estate lenders and the financial institutions that bundle and resell mortgages.
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Over the past five years, home sales in flood-prone areas grew about 25 percent less quickly than in counties that do not typically flood, according to county-by-county data from Attom Data Solutions, the parent company of RealtyTrac. Many coastal residents are rethinking their investments and heading for safer ground.
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Vulnerable Property in the Eastern United States

Residential real estate sales have grown less quickly in the last five years in areas where flooding from hurricanes is more frequent.

Some areas that flood the most from hurricanes …
… have had slower real estate sales in the last five years.
Existing-home sales
Hurricane storm
surge risk
Index level
Five-year change in houses and condos
The risk of flooding from hurricanes is high along the Carolina Coast. The real estate markets in many counties there have slumped in the last five years.
Along the Gulf Coast, most counties are at a high risk of flooding from hurricanes.
The risk of flooding from hurricanes among counties in South Florida is consistently high. Real estate sales declined slightly in Miami-Dade, Collier, Hendry and Lee Counties, while sales in other counties there have barely grown.
“I don’t see how this town is going to defeat the water,” said Brent Dixon, a resident of Miami Beach who plans to move north and away from the coast in anticipation of worsening king tides, the highest predicted tide of the year. “The water always wins.”
These concerns have taken on a new urgency since the presidential election of Donald J. Trump, who has long been a skeptic of global warming, claiming in 2012 that it was a concept “created by and for the Chinese in order to make U.S. manufacturing noncompetitive.”
A real estate developer, Mr. Trump is also the owner of several South Florida properties, including Mar-a-Lago, a 20-acre site that stretches between the Atlantic Ocean and the Intracoastal Waterway in Palm Beach.
Mr. Trump’s recent selection of Myron Ebell to lead his Environmental Protection Agency transition team intensified these worries in Floridaand among many climate scientists. Mr. Ebell has helped lead the charge against the scientific consensus that global warming exists and is caused by people.
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Houses lining the beach in Oak Island, N.C. Home sales in flood-prone areas have grown less quickly than in other counties over the past five years.CreditLogan R. Cyrus for The New York Times
State lawmakers in Massachusetts and New Jersey are pushing to impose new rules on real estate agents and others, obligating them to disclose climate-related damage like previous flooding.
Banks and insurers need to protect their collateral and investors more by improving their methods for estimating climate-change risks and creating more standardized rules for reporting them publicly, economists warn.
In April, Sean Becketti, the chief economist for Freddie Mac, the government-backed mortgage giant, issued a dire prediction. It is only a matter of time, he wrote, before sea level rise and storm surges become so unbearable along the coast that people will leave, ditching their mortgages and potentially triggering another housing meltdown — except this time, it would be unlikely that these housing prices would ever recover.


David Jacobs in his home in Wrightsville Beach, N.C., which he fears may be washed away. “It pains me to think my children and grandchildren may not be able to enjoy it,” he said.CreditLogan R. Cyrus for The New York Times

“Some residents will cash out early and suffer minimal losses,” he wrote. “Others will not be so lucky.”

Bull’s-Eye for Property Damage

Much of the uncertainty surrounding climate change focuses on the pace of the rise in sea levels. But some argue that this misses the point because property values will probably go under water long before the properties themselves do.
What is often called “nuisance” flooding — inundation caused more by tides than weather — is already affecting property values. Often just a foot or two deep, this type of flooding can stop traffic, swamp basements, damage cars and contaminate groundwater.
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Miami Beach raised the sea wall and pumped out tidewater during a king tide, the highest predicted tide of the year.CreditMax Reed for The New York Times
Florida has six of the 10 American urban centers most vulnerable to storm surge, according to a 2016 report from CoreLogic, a real estate data firm. Southeast Florida experiences about 10 tidal floods per year now. That number is likely to be around 240 floods per year by 2045, according to climate researchers.
In the past year, home sales have increased 2.6 percent nationally, but have dropped about 7.6 percent in high-risk flood zones in Miami-Dade County, according to housing data. Many coastal cities are taking steps toward mitigation, digging runoff tunnels, elevating roads and building detention ponds.
James Murley, Miami-Dade’s chief resilience officer, said it was important to avoid spooking the market since real estate investment produces much of the revenue that pays for these upgrades. This balancing act is especially important in Florida because the state and localities rely heavily on property and sales taxes for funding such projects.
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Real Estate Around Miami: Susceptible to Flooding and Sales Slumps

Miami-Dade County is bursting with valuable real estate along the coast from Aventura to the beginning of the Florida Keys. But relative to other parts of the county, areas that flood the most have had the slowest sales recently.

Many areas around Miami
that flood the most …
… have had slower real estate
sales in the last five years.
Percentage of homes in high-risk flood zones
Five year change in existing-home sales
Zipcode areas
in Miami-Dade
County, Fla.
Florida is not alone. Forty percent of Americans live and work in coastal areas, and those who can afford it are protecting their investments by building private bulkheads and lifting their homes onto stilts. But skeptics question the logic of upgrading individual properties if the surrounding areas do not keep pace and flooding or the rise in sea levels swamps nearby roads.
For many home buyers and owners, the cost of flood insurance is a growing worry. As premiums rise, property values fall, a trend already hurting home prices in places like Atlantic City, Norfolk, Va., and St. Petersburg, Fla., according to local real estate agents.
Roy and Carol Baker, who now live in Sarasota, Fla., recalled trying for several months to sell their home in nearby Siesta Key in 2014. Interested buyers kept backing out of the purchase when they found out that the annual flood insurance premium was roughly $7,000, they said.
This experience will become more common, economists say, as the federal government shifts away from subsidizing flood insurance rates to get premiums closer to reflecting the true market cost of the risk.


Brent Dixon looking out from his apartment in Miami Beach. “I don’t see how this town is going to defeat the water,” he said. He plans to move north and away from the coast.CreditMax Reed for The New York Times

As difficult as it is to predict the pace of climate change, modeling how it will affect the real estate market is even more complicated. Like a game of hot potato, builders, homeowners, banks, flood insurers and buyers of securitized mortgages try to hand off risky properties before getting burned. Developers erect houses and sell them typically within a couple of years, long before their investments depreciate. Banks earn commissions even on risky home loans before bundling these mortgages into securities and selling them to large pension funds, insurers or other buyers.
Home buyers tend to think short term, focus on what they can afford and hope that the local infrastructure keeps pace with the rise in sea levels. Home buyers are also generally on their own as they look at prospective properties and try to size up their risk, as real estate agents vary in what they disclose.
Most real estate agents say they try to tackle the issue head-on, providing clients with maps indicating federally declared high-risk flood zones, and using climate-change preparedness as a selling point, emphasizing if the house has a backup generator or shingles that can withstand hurricane-strength winds.
But real estate agents risk putting themselves at a competitive disadvantage by overstating threats. Good information is hard to come by. No one knows whether, when or by how much properties will depreciate, seas will encroach or flood insurance policies will change.
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A beach house under construction in the Sandbridge neighborhood of Virginia Beach. Despite a slowdown in home sales, many flood-prone cities are still growing.CreditBenjamin Donald Boshart for The New York Times
Valerie Amor, a real estate agent in Fort Lauderdale, said that, unlike most in her industry, she does a feasibility study before she assists in either buying or selling property.
“It should not be left as a moral or personal decision,” said Ms. Amor, adding that more disclosure should be mandatory.

Disclosing Natural Disasters

Norfolk is a city surrounded by water. In 2014, the Federal Emergency Management Agency expanded the area designated as highest risk for a flood in an update to regional maps, requiring thousands of new homeowners to have flood insurance. The real estate industry worried about the impact on the market. Lawmakers responded.
The region around Norfolk has among the highest rates of annual sea level rise on the East Coast. Rising water and sinking land could push the relative sea level up in some parts by six feet by the end of the century, the United States Army Corps of Engineers estimates. Flood insurance in moderate- to low-risk areas nationally costs more than $200 a year, according to the National Flood Insurance Program, but for properties in flood zones, those rates could rise by as much as several thousand dollars.
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Houses with raised foundations on waterfront property in Norfolk, Va. Rising water and sinking land combine to give the region around Norfolk among the highest rates of annual sea level rise on the East Coast.CreditBenjamin Donald Boshart for The New York Times
Virginia requires real estate agents to reveal whether a property is in a military airplane noise zone, has defective drywall or has ever been used to manufacture methamphetamine. After the flood maps were updated, the industry wondered what new disclosure rules would be mandated. Should homeowners or their agents be required to reveal to potential buyers if the house had been flooded? Should they have to tell how much flood insurance cost and was estimated to rise?
Within a year, state lawmakers passed a real estate disclosure law that the industry hailed as a major step forward. “We are immensely satisfied,” Deborah Baisden, then president of the Virginia Association of Realtors, said of the law.
While the law encourages home buyers to exert due diligence in investigating the risk of living in a flood hazard area, it also explicitly states that the seller of a home is not obligated to disclose whether the home is in a zone that FEMA regards as high risk.
Some city officials said the law did not go far enough. “It’s a nondisclosure disclosure,” Meg Pittenger, an environmental manager for the city of Portsmouth, Va., told reporter for The Virginian-Pilot. She added that it should have required sellers or agents to inform prospective buyers whether a property lies in a flood zone.

Short Answers to Hard Questions About Climate Change

Flood risks are easily overlooked because past flood damage often goes unreported and, as in Virginia, the burden of discovering it falls to the buyer. LexisNexis, a news and legal research company, can supply sellers a report with the history of flood claims on the property, but buyers usually do not know to ask for it. FEMA collects information on federal insurance claims for homes nationally, but the agency has been reluctant to make it public for privacy reasons.
States and local real estate agents are handling disclosure differently. In Florida, real estate agents have to notify purchasers if a property is subject to natural hazards, but the law applies only to a limited area along the Florida coast and has no penalties for noncompliance. And in 2010 lawmakers stripped the requirement to disclose a property’s windstorm mitigation rating.
California, Washington and Pennsylvania, on the other hand, require the disclosure of past flooding or susceptibility to future flooding. In New York, sellers are required to disclose whether a property sits in a flood plain. “It may be a matter of life and death,” said State Senator Stewart Greenleaf of Pennsylvania, who sponsored a state disclosure rule that became law this year.
Some real estate agents around Boston have begun taking prospective buyers to newly repaired multimillion-dollar sea walls built to protect homes from storm damage. They also have begun to encourage clients to increase the marketability of their properties by installing storm-resistant technology, including steel beams and window flaps that allow water to flow in and out of a basement during a flood.

Not everyone favors more disclosure, said Daren Blomquist, the senior vice president of communications at Attom Data Solutions, the real estate data tracking firm that serves brokers, lenders and insurers. After strong objections from real estate companies, which threatened to stop providing data, his firm took down its web page that integrated real estate listings with plot-by-plot information about the risks of floods, hurricanes, wildfires and other natural hazards.
“The pressure was intense,” he said, adding that the company still provides this information on separate web pages.

Banks and Insurers Try to Adapt

It is not just property owners, buyers and sellers who are struggling to estimate the potential financial impact of climate change on the real estate market. These risks compound as individual mortgages get bundled and sold as securities. In his April report, Mr. Becketti, the Freddie Mac economist, emphasized how difficult it was to predict whether the bubble in coastal real estate would slowly deflate or suddenly pop.
“Will the value of the house decline gradually as the expected life of the house becomes shorter?” he wrote. “Or, alternatively, will the value of the house — and all the houses around it — plunge the first time a lender refuses to make a mortgage on a nearby house or an insurer refuses to issue a homeowner’s policy?”


The real estate and mortgage markets have been slow to confront climate change, said Albert Slap, an environmental lawyer and the president of Coastal Risk Consulting, a company that advises communities on how to prepare for sea level rise. Most buyers of securities, for example, underestimate the risk in their portfolios by relying on FEMA flood maps, he said. Strictly backward looking, these maps are based on floods that have already occurred.
To make matters worse, the National Flood Insurance Program is more than $20 billion in debt. After several major coastal storms, Congress tried to fix the program, passing a law in 2012 requiring that insurance premiums be recalculated to accurately reflect risk. Coastal homeowners rebelled, arguing that the legislation made insurance unaffordable, and in 2014 Congress repealed parts of the law.
George Kasimos, a real estate expert in Toms River, N.J., said homeowners had good reason to react. “A homeowner may be approved for a $300,000 mortgage with a $3,000 a year flood insurance premium,” he said, but the same person’s loan application would most likely be rejected with a $10,000 flood insurance premium. As insurance prices rise, some home purchases will become cash only, squeezing more middle-class and lower-income buyers out of the market.
The North Carolina shore has been especially popular among baby boomers along the East Coast looking for an affordable retirement option.
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Because of beach erosion, officials on Topsail Island, N.C., have had to combat the rising water with large sandbags.CreditLogan R. Cyrus for The New York Times
David Jacobs, 54, said he expected that his home — about 50 feet from the water in Wrightsville Beach, N.C. — will be washed away soon enough. “It pains me to think my children and grandchildren may not be able to enjoy it,” he said, adding that his flood insurance is now about $400 more per month than it was when he moved there in 2013.
Economists have also called for reporting rules so securities investors would know what portion of their bundled mortgages includes high risk from climate change, like properties in coastal regions, river flood plains, flammable canyons and mountainsides, earthquake zones, tsunami washout zones and tornado alleys.
“Coastal mortgages are growing into as big a bubble as the housing market of 2007,” said Philip Stoddard, the mayor of South Miami. But this time, he said, there will not be a rebound because the waters will not recede and properties will eventually lose all of their value.
Politicians are more focused on keeping developers calm and reassuring people that technological solutions will save the day, he said, which plays into an expectation, especially among the wealthiest homeowners, that the government will bail them out if property values crash.

Riding Out the Storm

Coastal homeowners are reluctant to leave. Robert Meyer, the co-director of the Risk Management and Decision Processes Center at the Wharton School of the University of Pennsylvania, has been using web surveys to assess the willingness of South Florida residents to pay higher taxes for climate-change upgrades rather than move.
“They show a remarkable willingness to stick it out,” Mr. Meyer said. His study found that by 2050 people would still be living in the riskiest areas and would have incrementally paid billions of dollars for adaptation measures.
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A flooded neighborhood after a king tide this month in Fort Lauderdale, Fla.CreditMax Reed for The New York Times
Despite the slowdown in home sales, many flood-prone cities are still growing. Skyscrapers and new apartment buildings are going up all around Fort Lauderdale. The local chamber of commerce says the city expects to add about 50,000 people in the next 15 years and currently lacks housing to accommodate them. In Miami, much of the new construction consists of luxury condos aimed at a large number of cash buyers from Russia and Latin America.
Nationally, median home prices in areas at high risk for flooding are still 4.4 percent below what they were 10 years ago, while home prices in low-risk areas are up 29.7 percent over the same period, according to the housing data.

Chris Bergh, the South Florida conservation director at the Nature Conservancy, said he was worried because his house on Big Pine Key was just over a half-mile from the beach and only about five feet above sea level.
“In planning for my 7-year-old child’s future,” he said, “I can’t count on him inheriting a valuable piece of property on Big Pine Key.”