Presented at CREW Miami’s Luncheon Meeting, November 19, 2019
Partner, Environmental Practice Group, Bilzin Sumberg
Chair, City of Coral Gables Sustainability Advisory Board; Founder & CEO, Bagué Group
Resilience Program Manager, Miami-Dade County's Office of Resilience
Climate Change Reporter, Miami Herald
Executive Director, Counterpointe Sustainable Real Estate
In Miami, the effects of climate change and sea-level rise are unmistakable. Panelists representing the private sector, local government, and media discussed challenges and potential solutions for communities, the environment, and the CRE industry.
, Resilience Program Manager for Adaptation in Miami-Dade County's Office of Resilience, emphasized the need for state and federal support if local policies are to be effective. “Sea-level rise is a national concern,” she said, “but we’re acutely aware of it here because our commercial areas are built on low elevations. Florida’s threatened properties are the nation’s highest by value.” She pointed out that our 1940s gravity-based drainage system is no longer as effective against today’s higher levels of sea water and will face more problems as sea levels rise. A related peril is that flooding of populated areas drives polluted runoff into Biscayne Bay, disturbing its environmental balance.
Resiliency: Pay Now or Pay More Later
Rising water levels and increasing storm intensity already affect the availability and cost of property insurance and mortgages. Municipal bond analysts have begun to consider climate risks and local resiliency plans when determining credit ratings for states and municipalities nationwide. “Companies are linking their business locations to sustainable goals, and making investment decisions based on resiliency factors,” said Adam Lipkin
, Executive Director, Counterpointe SRE. He sees an uptick in demand by hotel and office building investors for attention to resiliency and sustainability. “Although property owners may not realize a premium for building-in resiliency, if you don't have it, your building could be passed over in favor of those that do.”
Although he’s optimistic about technology’s ability to address climate-related challenges, “we have to decide how to pay for it.” Lipkin’s
company specializes in financing for energy retrofits, often through a financing structure called CPACE (Commercial Property-Assessed Clean Energy). With it, building owners borrow money for energy efficiency, renewable energy, or other projects, and repay through assessments on their property tax bills.
The Environment IS the Economy
“The City of Coral Gables has been dealing with water issues and is very proactive,” said Irela Bagué,
who chairs that city’s sustainability advisory board. Although many Gables businesses have complied voluntarily with bans on plastic bags and polystyrene, she said adaptation is hollow without a strategy to reduce carbon emissions. “Coral Gables has created a certification for businesses that’s intended to lower their overall carbon footprint. In affluent Coral Gables, the city has created an infrastructure reserve account with the goal of accumulating more than $100 million by 2040 to help address sea-level rise, mitigation, and adaption efforts.” Bagué
advocates for a statewide approach to overhauling building codes and flood plain designations.
the Miami Herald’s climate change reporter, has anecdotal evidence of change in the real estate market. “Sales prices are not appreciating as much as they normally would, and developers are shifting their interest to higher ground. Single family home buyers are self-selecting away from low-lying areas, electing to buy houses in higher elevations.” With corporations and Moody’s considering resiliency plans in their decision making, policy changes at the highest levels are needed. “What’s missing is action at the state level, like requiring land use and building code changes or fining violators,” Harris
She touched on the need for models that address developments for lower income residents. “In Miami, the poor occupy the high ground. When all the new development falls there, that leads to climate gentrification. Where are those residents supposed to go?” Redevelopment, meaning tear down and rebuild, is one approach, but panelists acknowledged that elevating buildings and infrastructure is not viable in every situation.
INFRASTRUCTURE: PROTECT AND ADAPT
“The consequences of ignoring climate change issues are real,” Hagemann
said. “For Infrastructure it’s more cost effective to adapt during the design phase when relatively modest adjustments can result in 1-to-2% increases in development costs, yet generate significantly-reduced costs over time by reducing repeated flood losses. Large commercial buildings represent a significant opportunity for energy and dollar savings and reduced greenhouse gas emissions; they are only 2% of total buildings, yet account for more than 43% of the floor space across Miami-Dade.”
Sea level in Miami has risen about nine inches since the 1930s and will touch all aspects of life in South Florida. Some coastal cities are designing infrastructure for levels predicted to be two feet higher in 40 years. We are all in this together, and must work to secure attention at the state and federal levels.