Mortgages: Not the Only Thing “Underwater” in Miami Beach

Over 15 million tourists[i] flock to Miami Beach annually to enjoy the City’s white sand beaches, art deco buildings, and vibrant nightlife. Miami is a unique cultural mecca, and its stunning beachfront locations have also made the city a hot spot for real estate developers. There are currently over 400 condo towers (approximately 50,000 units) under construction from Miami to West Palm Beach.[ii] However, the prospect of rising sea levels and global warming loom ominously over the City’s future prospects.

Rising greenhouse gas concentrations are contributing to glacial melting as well as the warming and expansion of the oceans.[iii] Accordingly, sea levels are expected to rise by up to 2 meters by 2100.[iv] The problem is even graver in South Florida, where sea levels are projected to rise by up to 10 inches by 2030 (compared to 1992 levels).[v] The region is particularly susceptible to flooding due to its “high water table, porous limestone bedrock, and low elevation.”[vi] Miami, with its booming real estate market, stands to loose up to $3.5 trillion in assets by 2070 as a result of climate change.[vii] Given these risks, the City has adopted a proactive mitigation and adaption strategy to hedge against future climate change impacts.


Exhibit 1: Sea Level Rise Risk for Miami Condominiums.[viii] Areas shaded in blue represent condominiums that are projected to be affected by approximately two meters of sea level rise. Areas in yellow and red represent condominiums that will be affected by three and four meters of sea level rise, respectively.

According to the City of Miami, every dollar that is invested in mitigation efforts is estimated to save $4 in potential losses in value.[ix] The City has therefore attempted to create a framework to plan mitigation efforts by establishing the following task forces:

  • Comprehensive Storm Water Management Master Plan (2012) – The City of Miami Beach developed a comprehensive 20-year guideline to address concerns regarding storm water and coastal infrastructure, as well as regulatory policies. The City announced in 2015 that it would commit up to $500 million for flood mitigation efforts.[x]
  • Mayors Blue Ribbon Panel on Sea Level Rise (2014) – Miami Beach’s mayor, Philip Levine, appointed a committee to advise him on issues related to flooding, storm water surge and sea level rise.[xi]

The most salient of the recent initiatives that the Miami Beach task forces have proposed and begun to implement include the following:

  • Building Code Modifications: Miami has begun to implement building code modifications that specify a minimum ground floor level for all new construction. Minimum Finish Floor Elevations will vary according to the building type, zoning codes and location.[xii]
  • Address Storm Water Surges: Miami has begun to install a storm water pump system that will pump excess seawater back into the ocean via the Biscayne Bay. The City plans to install as many as 75 to 80 pumps by 2020.[xiii]


Exhibit 2: Storm Water Surge Pump Installation[xiv]

  • State-of-the-Art City Planning Imitative: Miami, under the leadership of Phillip Levine, intends to embark on a radical engineering feat. The City is in the process of raising streets and sidewalks by as much as two feet to help combat rising sea levels.

Levine has committed to an unprecedented investment in flooding mitigation measures. Critics accuse Levine of catering to the “big-money interest” of well-heeled developers and investing in “untested solutions.”[xv] While there may be more than a shade of truth to these detractors, Levine is tapping into a lucrative source of both financing and advocacy through his relationship with real estate developers.

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[i]Greater Miami Convention and Visitors Bureau . 2016. Greater Miami and the Beaches 2015 Visitor Industry Overview. [ONLINE] Available at: [Accessed 4 November 2016].

[ii] Sara Solovitch. 2016. How Miami Beach is Keeping the Florida Dream Alive and Dry. [ONLINE] Available at: [Accessed 4 November 2016].

[iii]”Understanding Sea Level: Empirical Projections,” NASA website,, accessed August 2016.

[iv] Understanding Sea Level: Empirical Projections,” NASA website,, accessed August 2016.

[v] Erika Bolstad. 2016. Seas Rising but Florida Keeps Building on the Coast. [ONLINE] Available at: [Accessed 4 November 2016].

[vi] Union of Concerned Scientists. 2016. Encroaching Tides in Miami-Dade County, Florida. [ONLINE] Available at: [Accessed 4 November 2016].

[vii] Katherine Kallergis. 2016. Miami faces $3.5T loss, highest risk of sea level rise among all coastal cities: report. [ONLINE] Available at: [Accessed 4 November 2016].


[ix] MiamiDade. 2016. Projects that Protect. [ONLINE] Available at: [Accessed 4 November 2016].

[x] AdaptionClearinghouse. 2012. Miami Beach, Florida Stormwater Management Master Plan. [ONLINE] Available at: [Accessed 4 November 2016].

[xi] Official Website of Miami Beach. 2012. Mayor’s Blue Ribbon Panel on Flood Mitigation. [ONLINE] Available at: [Accessed 4 November 2016].

[xii] AECOM. 2015. A Research Paper Reviewing Issues and Unintended Consequences related to Raising Minimum Building Finish Floor Elevations. [ONLINE] Available at: [Accessed 4 November 2016].

[xiii] Kenny Malone. 2015. An Idea To Mitigate Rising Seas In Miami Beach: Lift The Entire City. [ONLINE] Available at: [Accessed 4 November 2016].

[xiv] Greg Allen. 2016. As Waters Rise, Miami Beach Builds Higher Streets And Political Willpower. [ONLINE] Available at: [Accessed 4 November 2016].

[xv] Jessica Weiss. 2015. Miami Beach’s $400 Million Sea-Level Rise Plan Is Unprecedented, but Not Everyone Is Sold. [ONLINE] Available at: [Accessed 4 November 2016].



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Student comments on Mortgages: Not the Only Thing “Underwater” in Miami Beach

  1. I thoroughly enjoyed this post, to include the pun in your title. Most importantly, however, was your focus on the action that the City of Miami is taking in addressing the issue. They are creatively, and perhaps controversially, taking action to manage storm water, reduce the risk of storm surge, and improve bundling codes.

    In a previous job, I spent time in the US Army Corps of Engineers working with the City of New Orleans and the State of Louisiana as they developed solutions to similar problems associated with sea level rise. However, in this experience, the city and state level governments were not committing resources to combat the issue and were instead fighting (primarily through lawsuits) with the federal government for restitution for projects they themselves had previously championed. The basis of their argument was rooted in the idea that past federal waterways projects in Louisiana contributed to issues associated with sea level rise. However, they ignored the evidence that suggested climate change and man-made coastal deterioration from near-shore oil and gas development are more likely to blame. After that experience, it is very refreshing to see a local level government accepting and addressing the issue.

  2. Tara,

    I thought this was an interesting article. It made me wonder if such solutions could be considered (if not already) for places such as New Orleans or other flood-sensitive areas. Do you think that it would work?
    I think it might also make sense to impose a “high risk zone” tax on these real-estate developers as they should be well aware of the impending risks of their construction. For insurance purposes, they will be paying more. Thus, it makes sense that they should pay a larger amount of taxes given that they are utilizing more of the city’s resources to plan for these climate change events and in the event of a disaster.
    According to the Times Article ( that discusses rising sea level & vulnerable zones, governments will have to spend billions on either relocating or on infrastructure spend. What this causes is a catch-22: local politicians want the tax revenue from the construction in vulnerable areas, but they will likely have to spend large sums of money in the future, should climate change continue to raise sea levels. Consequently, I like that the city is beginning to take steps to mitigate the future impacts although there is much work to be done.

  3. Very interesting post! Rising sea levels are sort of a new problem in American cities, but have long been an issue in Europe. In this sense, I wonder why Miami Beach has not chosen to benchmark some of the solutions found on the other side of the Atlantic. The Netherlands, for instance, have miles upon miles of dams, many built over 60 years ago. The country has deep knowledge on the subject, having recently also begun to tap into innovative solutions, such as using beaches and natural estuaries to prevent flooding ( Anyhow, thank you very much for your insight, especially the comparison between mitigating and costs and potential losses. This kind of data should really resonate on our politicians.

  4. Great read! It seems as if the city of Miami is merely accommodating climate change impacts rather than proactively taking measures to prevent climate change from happening in the first place. Do you think that the city of Miami can take responsibility in some part for the rising sea levels that are impacting the city? I read another post from another section that mentioned a similar topic but with respect to the rising water level’s impact on the city of Venice in Italy. It seemed as if the number of cruise ships coming in and out of its ports had some part to play in contributing to the rising water levels. In this case, with the high volume of tourists that visit Miami, I wonder if there are similar impacts, not only from cruise ships, but other impacts from tourism, that impact the rising sea levels?

  5. Great post! I wonder if Miami should consider long-term solutions to the issue of sea level increases? Some countries have installed levees and seawalls to protect low-lying areas from flooding and storm surges. This obviously implies large capital expenditures as well as the need to continually maintain structural solutions which would place a huge financial burden on the government. Another option might be to increase the height of new structural developments (i.e. structures on stilts in low-lying areas), the cost of which would be borne by developers. How much of a role should government play and should the private sector play a more active role?

  6. Rising sea levels affect not only vibrant cities like Miami but entire nations like the Maldives. There is plenty of opportunity for synergies and collaboration across local and international governments to share best practices and jointly develop methods to combat rising sea levels. Learning from places where this rise is more accelerated or pronounced now (such as Maldives or Sunderbans) would be helpful for city governments to get an idea of where things could be headed if climate change is not adequately checked. This can enable better preparation.

  7. This post really shows the massive impact climate change is having! Wow. It is hard to believe that such a predominate city like Miami faces such a looming threat in the face of climate change. Reading this post it almost seems inevitable that Miami as we know it today will not exist 50 years from now. It is interesting to see the investments that the city is making to help mitigate the risks ahead but I can’t help but wonder at what point do investors and community members alike decide to throw the towel in and move to a more strategic location? I fear that during our lifetime we may see this unfold. It will undoubtedly take an extraordinary commitment from the city’s leadership as well as an extraordinary amount of money to preserve this phenomenal place. I believe that if these resources are available, the city can ultimately leverage advances in modern technology to find a creative solution to what is, at the end of the day, no more than a difficult engineering problem. Let us hope that the rest of the world too can leverage advancements in technology to help mitigate the impacts of what seems to be the root to Miami’s problem – climate change.

  8. Great post! I find it fascinating that despite the widely known threats to South Florida, there continues to be significant real estate development in the region (specifically in South Beach). Presumably some of the world’s savviest investors and real estate professionals are bankrolling the development of these hotels, condos, etc. in an area that may be underwater within the next 50 years. It makes me wonder if my very basic view is missing some key point.

    Also, I agree that the mayor is doing a great job of leveraging this environment to generate investment in mitigation and recovery programs but I wonder if it’s too little, too late. Further, if there is no solution and doomsday is inevitable, what happens to the billions of dollars of property that currently sits on the sandy beaches. Does the value of that property go to zero? Are we expecting some mechanism to be discovered that can maintain the viability of these buildings if South Beach is under water? No matter what the answer is, it will be an interesting next 30-50 years in South Beach.

  9. This is so interesting. I am particularly intrigued beyond the article how can a city that has been iconic for its real estate development in the last +50 years embark on a total turnaround. Levine is committing investment to mitigating flooding issues, but I worry that the solutions have not been proven and that this could be another way for developers to take in money without actually offering up viable solutions for the city of Miami.

    Perhaps a way to align incentives is to only give permits to developers who will contribute X amount from their project to financing relief from climate change?

  10. This was such a cool read! I had no idea this was happening in Miami, much less the measures they are taking to mitigate the problem.

    This is more of a political comment, but do you think they should be doing more to engage the industry in helping to fund the construction elements of this project, in addition to using city-wide funds?

    On a more operational level, I wonder if they should be doing more to tackle the problem of flooding head on, as opposed to just changing their current construction which might serve as more of a “temporary” (meaning 10-20 years) solution. Would there be a way to change how water management works in the city and would it be worth the investment? I think there might be a way to incentivize private companies to tackle these long run problems while the government of Miami works on dealing with the avoiding the short-term ramifications coming in the immediate few years.

  11. Really interesting post Tara, as a homeowner in Florida I hate to read this. I now wonder what can be done in other cities like Tampa, Palm Beach, and other water facing cities can do to replicate this effort. It really worries me that reading your analysis it really doesn’t seam that they will be able to do enough to defend themselves, especially from a longer term perspective. I would definitely love to know which of these steps you think is the most easily replicated, and what has been done from a federal government level to fight this issue. I know I want to read more about what the federal government plans to do going forward, and which groups are fighting for change to push them in the right direction. Cheers!

  12. Super interesting read!

    From an insurance perspective, many property insurance companies like State Farm and Allstate, actually saw this risk in 2009 and decided to slowly exit the market by not renewing housing policies. “The withdrawal of State Farm alone in 2009, affected over 1.2 million homeowners, renters, condominium unit owners, personal liability, boats, personal articles, and business property and liability policies.” (

    I’m curious if in your research you found any evidence of the incremental costs a city like Miami has from the loss of big insurers, and if the city has any specific plans to re-establish relationships with some of these big players? After nine years of not operating in California (for similar climate concerns), Allstate has re-entered the market, so wondering if there would be an opportunity for Miami / Florida? (

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