Coastal Hazards and Northeast Housing Values: Comparative implications for climate change adaptation and community resilience (Regional)

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Project Type: 
Research
Project Number: 
R/NERR14-1WH-NH
Inception Date: 
2014
Completion Date: 
2016

Participants:

Robert Johnston Clark University Principal Investigator
Klaus Moeltner Virginia Polytechnic Institute and State University Co-Principal Investigator
Christine Blinn Virginia Polytechnic Institute and State University Co-Principal Investigator
Christine Feurt Wells National Estuarine Research Reserve Co-Principal Investigator

Students Involved:

Benedict Holland Clark University
Objectives: 

The project will combine coastal hazards, property value and other data with economic models to answer three questions central to Northeast coastal adaptation: (1) How do property values and tax bases in Northeast communities respond to coastal hazards, and do these responses create incentives to build/rebuild in risk-prone areas or undertake private adaptations? (2) How do property values and tax bases respond to adaptation actions undertaken by states, municipalities or homeowners/developers? (3) What do results imply for future scenarios of property values and tax bases in Northeast communities, under alternative SLR and hazard projections? The project will be implemented in coordination with partners and communities involved in Northeast coastal adaptation including the Wells National Estuarine Research Reserve (NERR), Great Bay NERR, Waquoit Bay NERR, and Nature Conservancy in Connecticut. Specific objectives are:

1. To select final case study communities in four Northeast regions (coastal Maine, N.H., Mass. and Conn.) in coordination with project partners and community officials, and to engage these communities/partners throughout the project.

2. To create geocoded datasets for each community on (a) property values and tax base, (b) parcel and structure attributes, (c) parcel-level coastal hazards and vulnerability, (d) relevant public and private adaptations, (e) other mitigating factors and determinants of property values (e.g., land use and land cover, neighborhood characteristics).

3. To adapt the theory and econometrics of property-matching models for robust estimation of property value and tax base responses to coastal hazards, public/private adaptations, and other mitigating factors in case study communities.

4. To estimate models that characterize the impact of hazard vulnerability and public/private adaptations on property values and tax base. Evaluate implications for the effect of coastal hazards and adaptations on property values and tax base, incentives facing developers and homeowners/buyers, and community resilience.

5. To generate comparative projections of property value and tax base impacts, through the coordination of model results with future coastal hazard and sea level rise scenarios.

6. To compare results across states and communities to provide a regional perspective, contrasting housing market responses that are shared across the region versus those that are unique to specific communities.

7. To implement stakeholder/policymaker workshops and engage with partners to evaluate implications for adaptation.

Methodology: 

1. The project will develop novel Property Value Matching Models (PVMMs) to quantify the impact on home prices of a multitude of hazard designations and adaptation actions. Tax base implications will be modeled as an extension of the property value models, based on observable relationships between tax-assessed values and market values.

2. Models will be applied to at least eight target communities in four states. Anticipated sites include Waterford and Old Saybrook, Conn.; Barnstable and Chatham, Mass.; Saco and Wells, Maine; Seabrook and Hampton, N.H.

3. Data will include property transactions in coastal counties of Conn., Mass., Maine, N.H. and R.I. between 1988–2013, linked to a geocoded database that includes: parcel boundaries, coastal hazard data/maps/projections, digital elevation models, land use/cover, parcel/neighborhood/community characteristics, and public/private adaptations.

4. Meta-regression models (MRMs) will be used to quantify and contrast housing market responses that are shared across the region versus those that are unique to specific communities or states.

5. Bayesian Model Search (BMS) and Model Averaging (BMA) will be applied to both the PVMMs and subsequent MRMs to evaluate and improve model fit, accuracy and robustness.

6. Model results will be combined with community scenarios of sea level rise, coastal hazards, and adaptations to generate comparative projections of property value and tax base impacts.

7. Outreach and engagement will be implemented in coordination with communities and partners, including: regional workshops, engagement with coastal adaptation work groups, engagement with community officials, coordination with other ongoing projects, publications for scientific, policymaker and stakeholder communities.

Rationale: 

Chief among the information needs to enhance coastal hazard adaptation are assessments of economic outcomes and policy implications. The project will develop and apply rigorous social science methods that, when integrated with natural science data and projections on coastal vulnerability, will enable stakeholders and policymakers to evaluate property value and tax base impacts of climate change adaptation across Northeast states and communities. The result will be heretofore unavailable information quantifying the economic consequences of coastal vulnerability and adaptation. Beneficiaries of the project include coastal adaptation work groups and government organizations; target communities; project partners seeking to better inform coastal adaptation; and policymakers/stakeholders.

Project results will enhance the ability of communities to choose adaptations with intended and desirable economic consequences. First, results will enable policymakers and the public to understand the effects of current hazard vulnerability on property values and the tax base, replacing unsupported claims with reliable empirical evidence. Second, the project will provide information that policymakers can use to forecast property value and tax base implications of alternative adaptation measures. Third, future scenarios mapping will provide information to support community dialogue and visioning. The project builds upon extensive prior work of the investigators coordinating natural/social science data to forecast economic outcomes and using results in partnership with stakeholders and policymakers to inform management.

Accomplishments: 

2015

Northeast regional project gathers data to evaluate property value and tax base impacts of climate change adaptation

A regional project is developing and applying rigorous social science methods that, when integrated with natural science data and projections on coastal vulnerability, enable stakeholders and policymakers to evaluate property value and tax base impacts of climate change adaptation across Northeast states and communities.
Relevance: Assessments of economic outcomes and policy implications are chief among the information needs to enhance coastal hazard adaptation. Communities and policy makers need this information to choose adaptations with positive and intended economic consequences.
Response: The Northeast Sea Grant Consortium funded a project that began by forecasting the effect of recognized flood hazard on property values across all coastal counties in Maine, New Hampshire, Massachusetts, Rhode Island and Connecticut for which property sales and updated flood zone data are available. The second modeling component forecasts the effect of public coastal adaptations, focusing initially on the effect of hardened shorelines such as sea walls. These models are limited to case study regions for which available data exist. Researchers are obtaining the final data necessary for the second modeling component; the availability of sufficient data from each target community and region will determine the final set of case study communities for which models will be estimated.
Results: Geographic Information System databases for all project modeling are approximately 80% complete. Property value, tax base and other property sales data required for model estimation have been drawn from a professionally compiled database comprising thousands of records on residential home sales over the past 20 years. These data include all recorded residential property transactions in coastal counties of Conn., Mass., Maine, N.H. and R.I. between 1988 and 2013. Workshops for dissemination of project information are planned for Fall 2016.

2014

Northeast regional project developed improved methods to control for confounding effects in property value models
The new property value matching models developed by a regional project funded by the Northeast Sea Grant Consortium allow the effect of coastal risks and adaptations on property values to be distinguished from effects of confounding factors such as coastal amenities. This is important because the two are often correlated (e.g., homes closer to the coast and/or with coastal views are more likely to be at greater risk of flooding, ceteris paribus). If not corrected, this problem leads to imprecise or sometimes biased estimates, depending on model specification. This is a common problem in the published literature, leading to misleading estimates of the effect of coastal hazards and adaptations on property values. The project has developed new methods that will allow the effects of coastal hazards and adaptations on property values and tax bases to be estimated cleanly and precisely, apart from confounding effects and potential model misspecifications.

2013

Northeast Sea Grant Consortium supports regional socio-economic projects
During 2013, the Northeast Sea Grant Consortium issued a regional call for socio-economic proposals specifically in the areas of offshore energy utilization and coastal resiliency to impacts of climate change. For that solicitation, we received 30 pre-proposals. A pre-proposal review panel included all Northeast Sea Grant directors, in addition to representatives from the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEM) and the Northeast Regional Ocean Council (NROC). Nine pre-proposals were selected for full proposal development and from those proposals three were selected for support to begin in FY2014. The selected proposals are:

Johnston, Robert J., Moeltner, K., Blinn, C., and Feurt, C. (Clark University) Coastal hazards and Northeast housing values: comparative implications for climate change adaptation and community resilience. Amount awarded: Year 1 $87,500; Year 2 $87,500.

Hoagland, P., Duff, J., Jin, D., and Kite-Powell, H. (WHOI) Buy out or build back? A comparative assessment of approaches to employing public funding to vulnerable coastal properties in the Northeastern United States. Year 1 $87,500; Year 2 $87,500.

Grabowski, J.H. and Ruth, M. (Northeastern University) Social and ecological factors influencing shoreline hardening in the Northeast: Implications for vulnerability, resilience, and informed decision making. Amount awarded: Year 1 $87,500; Year 2 $87,500.

The first two projects were supported by Omnibus funds to the seven northeast sea Grant programs (Maine, N.H., MIT, WHOI, R.I., Conn., and N.Y.); the third project was supported by additional funds from the National Sea Grant Office allocated to each of these programs.