Can Homeowners In The U.S. Afford Climate Change?

From western wildfires to east coast flooding, climate change is wreaking havoc on American homes. In this thrilling and emotional documentary, CNBC follows life after fire victim Jenna Johnson narrowly escaped California's deadliest and most destructive fire, the Camp Fire. Meanwhile, standing in his flooding garage, Miami Beach resident Curt Dyer debates raising his house 4 feet to escape the water. Watch the full documentary to see how climate change victims are trying to protect themselves and their homes.

The rain fell steadily at Curt Dyer’s Miami Beach, Florida, home on a mid-July day this summer. He opened the door to the garage and pointed to the flood already collecting in his driveway. He said it wouldn’t be long until the whole garage flooded.

Even though he faces daily nuisance flooding, the 30-year Miami Beach resident said he is not considering moving. “It’s paradise living here.”

Dyer estimates he’s spending about $250,000 in renovation costs to make his home more resilient to flooding. While that figure includes some upgrades to the cabinetry in the kitchen, the main structural change will raise the driveway 3 feet and pitch it so water will flow into the street. He’s also raising his guest bedroom and bathroom 4 feet.

Jesse Keenan, associate professor of real estate at Tulane University, says these types of resiliency fixes, which are primarily available to the wealthy, create a game of musical chairs with home equity.

As long as homeowners like Dyer are able to sell their property at a higher price after resiliency investments, they come out on top. Eventually, however, a homeowner or bank could end up losing everything if a flood or other disaster destroys the house and makes the property unlivable. Over time, this risk will increase insurance rates and make it harder to get mortgages.

“We anticipate a rapid decline in valuation,” Keenan told CNBC. “Only the wealthy can afford to live, for instance, in high-risk coastal areas, because everybody else can’t insure it and won’t be able to get a mortgage.”

In fact, homes exposed to sea level rise sell for about 7% less than their unexposed counterparts, according to a study published in 2019 in the Journal of Financial Economics. That discount jumps to 10% when the owner of the property is not living there.

Flooding is the most common and most expensive natural disaster in the U.S., according to FEMA. Ninety percent of all natural disasters in the U.S. involve flooding and just 1 inch of water can cause $25,000 of damage to a home.

A 2018 Insurance Information Institute survey found that only 15% of American homeowners have flood insurance. Keenen fears all this combined will lead to a situation where only the wealthy will be able to protect themselves from climate danger.

Dyer said registering his flood claims has been relatively simple but he and his husband are paying out of pocket for these major renovations. But it’s worth it to make his dream home complete, and he expects Miami Beach will continue to be livable for at least another 20 years.

“If I didn’t have the resources and the capability to make the repairs, I would probably have no desire to live in these conditions in this environment. It would be unacceptable. But I do have the resources. I have the ability to make the correction. So I’m going to do it,” he said.

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Can U.S. Homes Survive Climate Change?

[tylerbhumphries]

Him: I don’t believe the area I live in will be completely underwater in 30 years
Also him: every time it rains my house floods and the city is spending millions of dollars to add a sewer system that will only reduce the flooding by a few inches
He’s literally swimming in denial

[djp]

Good thing I'm a millenial and can't afford a house.

[Who-vtoh]

The thing is, a lot of people living in high risk areas aren't actually paying the full price of what it costs for them to live there. A lot of the costs are being pushed off to the rest of us, just like what's happening with carbon emitting companies not paying the full cost of their carbon emissions.

[chinosantrax]

Imagine repairing the house every time it rains…

[katakun]

I remember years ago a group called “climate scientists” warned us about this, and every corporations was like: “poof.. where is the profit in that?” Now that climate change starts to affect their money making machines, they are like: “OMG climate change is an issue! Why didn’t anybody tell us about how bad it is for our money?”

[rabbidsqwirl]

Imagine paying $2 million for a house that regularly floods, it's absolute and utter absurdity. Folks, if you're planning on buying/building a house please be conscious of these things **BEFORE YOU BUY**.

[Daniel-gseh]

When realtor friend said the housing market was on fire I didn't know he meant literally

[trevorhsu]

They got a 45 minute documentary only interviewing two upper middle class families. One of which drives a 4runner and complains about climate change. Other news organizations like Vice and PBS Frontline do so so much better reporting

[Tential]

Got to love how he lives in area that gets flooded and applies for government assistance. You live in a million-dollar home, if you don't like it getting flooded either pay for the renovations or get out, stop asking for a government handout

[NoraGermain]

Love when conservatives just say "sell your house" or "if you don't like it, move" -- like who is going to buy a house that floods every week??? or that can't get insured for fires???

[tylermadison]

Well half the country dosen't believe its real. So we are doomed

[rogerwilco]

The USA has been really, really poor at its urban planning and zoning regulations.
The USA seems to have very little mind for any kind of prevention or preparedness.
And certainly not at a national level.
The lady from Paradise is so clearly only thinking at an individual level, not at a collective level.

[downrightmike]

I wouldn't live there just for the mold factor, then lol, they think that's worth 1m? I wouldn't step foot in there.

[hurrdurrmurrgurr]

"This little amount of rain already caused flooding".
"The driveway is flooded"
"The garden is flooded."
"My car was under water."
"When we opened the door, water rushed in."
"This house is worth a million dollars."
Denial not's just a river in Egypt, it's flooding this man's house.

[dongyongkim]

It is unbelievably frustrating knowing that most of us knew this as kids, most of our parents had an idea of this, and the rich absolutely know about it and the older generations took a loan out on the future betting that the profits they made then could be enjoyed in their lives before this happened.

[vishnuvardhanduggireddy]

I'm an engineer working in America my manager said climate change is hoax, I was just stunned by his words

[teejaybee]

The issue of climate change was always an issue of economics! It should have been framed in this way from the beginning, if the risks to assets was placed in the forefront, maybe this politicization that happened around it would have been avoided.

[theeraphatsunthornwit]

Due to rising sea level, the rich has fled to their beach house.

[bgiv]

23:23 did you catch it? "How to prevent it ON YOUR OWN." That's the problem in a nutshell. We're all out here alone and without any support. That is until we learn to see our neighbors' problems as our problems. Solidarity y'all.

[christinearmington]

Interesting reflection on that one highly engineered home on Mexico Beach that survived Hurricane Michael intact. Sure it’s an island in a sea of destruction, but it’s also setting a great example for the rebuilding process.