The Truth Behind the Higher Tides Realty Hoax
You can indeed assess economic impact to property values due to flood hazard
Last week Higher Tides Realty went viral. The premise; a real estate company who could determine which properties will benefit or be affected by climate change and sea level rise, and who knew how to subsequently profit from it. Their flamboyant video summarizes their intent:
Their claims were further detailed in their website and throughout interviews with major internet outlets. It was only when Vice’s Motherboard thoroughly vetted their organization that Higher Tides’ creator came forward and explained that it was all part of an elaborate hoax to bring attention to climate change and sea level rise.
It is interesting to note the wide appeal it caused across online outlets and social media. Traditionally, real estate agents have been wary of flood risk assessments that might affect property value. According to real estate agents, a higher flood insurance premium due to mapping issues, climate change, or legislation could threaten the entire real estate market (see this and this). This is why so many internet outlets jumped at the opportunity to meet a new real estate agency that not only acknowledged the impact of climate change openly, but also intended to profit from it. The very idea of being able to devine which properties would and would not benefit from climate change seemed too good to be true.
Estimating the impact of climate change is in fact very challenging. While the scientific community (and now the world after recent Paris accord) believes sea levels will rise, storms will be stronger and more frequent, and that flooding will place many more properties at risk, uncertainty remains as to how much and how many. There are a myriad of models that depict a wide array of possible scenarios. Government agencies and NGOs have helped by providing scenarios that measure such changes uniformly (e.g., NPCC, NOAA), and FEMA has provided recommendations on how to apply parameters like sea level rise to flood mapping (e.g., TMAC). However, for the average property owner, making sense of all of the available information is overwhelming, and it certainly doesn’t provide an answer about how flooding and increased risk could hit them in the wallet.
Enter Beyond Floods, a structure-based solution that combines flood risk information with property and neighborhood data, providing homeowners with easy to read, actionable information related to reducing their property’s flood risk. With just an address to lookup, Beyond Floods can provide homeowners and homebuyers detailed insights about that property’s flood risk and associated costs. It provides insights into over 25 risk parameters for that specific property (e.g., current and future flood risk and regulatory impacts) including estimates of what flood insurance might cost both annually and over the life of a mortgage. By estimating a Net Present Value (NPV) of flood insurance costs over a 15- or 30- yr mortgage, Beyond Floods gives prospective property owners a window into the actual opportunity cost of basic risk mitigation (insurance). This information is supremely valuable when deciding whether such costs fit into their budgets.
The response to the Higher Tides hoax has shown that the market is acknowledging the impact of climate change, and is hungry for solutions which help make the most of opportunities within a changing world while protecting their real property. While Higher Tide’s promise was empty, Beyond Floods showcases the technology and science that will make it happen. We encourage all (even real estate agents) to download our free app, use it, and live Beyond Floods.
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