2/4/25 – First Street Foundation released a new study today as part of its 12th National Risk Assessment. “Property Prices in Peril” estimates that real estate values could lose $1.4 trillion over the next 30 years due to climate-related risks. That number is unadjusted for inflation.
First Street specializes in climate risk financial modeling. Its clients include financial institutions, companies and governments. The organization announced the research in a webinar this morning. I will summarize it below.
Summary of Research
The basic premise: Homeownership has long been the primary pathway to wealth creation in the U.S. Prospective homeowners decide where to live by balancing quality of life and cost of living. That drives home value increases and decreases.
Crucial Role of Insurance Costs
But climate change is now causing many to recalibrate that value proposition as insurance costs now represent a higher proportion of mortgage costs than ever before. And First Street predicts premiums will continue to rise until they become actuarily sound.
Projected insurance increases
The First Street presentation began with several slides on insurance rates and factors affecting them (losses, predicted risk increases, government regs, etc.). In some areas, monthly insurance payments could soon comprise 25% of total home payments. First Street predicts that…
Huge increases in insurance premiums will drive up the cost of home ownership and make homes in risky areas less affordable for many.
In addition, money paid out to insurance companies does not appreciate like the home itself does. As a consequence, a lower percentage of a family’s total income will be available to build wealth from home ownership in the future.
Diagram showing how climate change and insurance rates affect home values and demand
Secondary Impacts
Further, the authors found that “The implications for local economies extend far beyond direct housing market effects to regional GDP, household financial stability, and public services.”
“Communities facing declining property values due to climate risks confront multiple economic threats,” says First Street. “Falling home equity reduces household wealth and borrowing capacity, constraining consumer spending and local economic activity.”
“Lower property assessments significantly impact state and local government revenues, with property taxes accounting for over 30% of local government funding nationwide. This reduction in revenue can trigger a vicious cycle, where limited funds hinder investments in critical climate adaptation infrastructure just when it is most urgently needed— further exacerbating the decline in property values.”
“States like Texas and Florida, which rely heavily on property taxes due to their no-income-tax structure, are increasingly exposed to fiscal risks as climate change threatens their tax base by impacting property values.”
Flooding Most Widespread Risk
“Flooding will emerge as the most geographically widespread driver of climate migration, leading 11.9 million Americans to relocate by 2055,” says the study.
“This migration pattern affects every region of the U.S., from coastal communities facing sea level rise and storm surge to inland areas facing fluvial flooding from rivers and streams to urban areas subject to pluvial flooding from heavy rainfall events,”
First Street projections indicate that “over one-third of U.S. counties and more than half the population are exposed to frequent, chronic flooding from precipitation alone.”
Effects of Climate Migration Most Apparent in Small Areas
Instead of looking at national and state trends, the First Street study looked at every census tract in the county. It found that housing choices at that micro-economic level are increasingly being driven by awareness of climate risks such as flooding.
Five Market Segments Illuminate Different Climate-Migration Patterns
Looking forward, First Street modeling segments neighborhoods into five categories:
Climate Abandonment – 26% of neighborhoods/census tracts, show sustained population loss due to climate change.
Risky Growth – 31% of neighborhoods continued to grow despite high risk, suggesting other strong economic or social drivers.
Tipping Point – 27% of neighborhoods show initial growth followed by decline as rising insurance premiums and climate impacts reach unsustainable levels.
Economic Decline – 11% of neighborhoods lose population despite low risk and stable insurance rates, suggesting economic factors, not climate, are driving decline.
Climate Resilient – 5% of neighborhoods attract population growth with low risk and stable insurance rates.
The study found five counties in Texas fell into the “risky growth” category: Fort Bend, Denton, Williamson, Travis and Montgomery.
For More Information
To learn more, visit the First Street Foundation website where you will find links to:
For instance, the study did not take into account immigration or variation in tax rates compared to other states.
I’m also a bit skeptical of any study that tries to project current trends 30 years into the future. Fifty years dealing with market research taught me how quickly trends can change.
Despite those concerns, the study makes excellent reading. It also makes a valuable contribution to our understanding of flooding and how it could impact the future of the Houston region.
Posted by Bob Rehak on 2/4/25
2716 Days since Hurricane Harvey
https://i0.wp.com/reduceflooding.com/wp-content/uploads/2025/02/20250204-Projected-insurance-increases.jpg?fit=1100%2C754&ssl=17541100adminadmin2025-02-04 18:00:302025-02-04 18:27:57Climate-Related Risks Could Reduce Real Estate Values by $1.4 Trillion in Next 30 Years
2/3/25 – Minutes from the November and December board meetings of the Coastal Water Authority (CWA) suggest that the group is beginning to explore a new dam for Lake Houston, even as it plans repairs and additional gates for the old dam. This post explores the projects and how they fit together.
Discussion in November Board Meeting
During a Board discussion on 11/13/24 about repairs to the old dam, David Miller, PE, the CWA’s Operations Manager, “noted that the Lake Houston Dam is near the end of its design life and CWA is planning for a dam replacement project,” say the minutes.
Don Ripley, PE, the CWA’s General Manager, subsequently noted that repairs to the old dam “would keep the Lake Houston Dam in compliance with State of Texas dam safety requirements.”
Mr. Miller noted that repairs to the Lake Livingston Dam after May floods last year could cost the Trinity River Authority as much as $40 million.
December Minutes Offer More Detail
Then, during the 12/13/24 board meeting, the subjects of repairs to the old dam, a new dam, and additional gates arose again.
Repairs to Old Dam
The December minutes state: “The Lake Houston Dam Repair Project is the $10 million Pre-Disaster Mitigation Grant Project that is being implemented for immediate repairs, including grouting voids below and around the dam structure and repairing the spalled concrete on spillway buttress walls.”
“CWA and CWA’s project engineer, Freese and Nichols, Inc., are currently working on the scope and fee for additional field investigations and design/ engineering work and expect to bring this item to the Board for consideration in January 2025.” (However, the January minutes have not yet been posted.)
“The engineering work will specify the repair locations and approach to be implemented during construction. It is estimated that investigation and engineering work will take approximately six to eight months and construction will take approximately six to nine months in duration.”
Potential Dam Replacement
December minutes also state that, “Planning is also underway for a larger project to replace the existing 75-year old Lake Houston Dam. CWA will have Black & Veatch begin a high-level Lake Houston Dam Replacement Study in 2025.”
Additional Gates
A third Lake Houston Dam project that Directors discussed was additional gates. CWA is planning to add eleven new tainter gates to the dam for an additional 79,000 cubic feet per second of controlled discharge capacity.
New gates would go toward the far end of this earthen embankment, near the existing spillway.
“The design work is underway,” say the December minutes, “and will run through 2026. Current field activities underway include ground and bathymetric surveys. The geotechnical soil borings, environmental investigations including wetlands, endangered species and archeological sites will begin next week.”
“The design team is also scheduling meetings with all of the permitting agencies, including Texas Commission on Environmental Quality (TCEQ), United States Army Corps of Engineers (USACE-Galveston) and Texas Parks and Wildlife Department (TPWD), regarding project details and schedules.”
“CWA met with the TCEQ last week and will meet with USACE-Galveston and TPWD in the coming weeks to inform them of the project details and to obtain an understanding of their respective review schedules and the possibilities of expediting those review schedules.”
“In response to questions from Director Sjolander and Director Huberty, Mr. Ripley stated that this project will increase discharge capacity during flood events which will provide upstream benefits.”
Putting Multiple Projects in Perspective
I reached out to the Coastal Water Authority for more information about the repairs, gate expansion and replacement. I wondered why they just didn’t move full steam ahead on the replacement?
Ripley responded, “CWA does not [currently] have a project to replace the existing dam. CWA is only preparing very preliminary information concerning the possible costs to replace the dam at some time in the future. Replacement of the dam will involve years of planning and permitting before an actual project could be proposed.”
When you supply drinking water to two million people, you want to make sure you get the engineering right.
Posted by Bob Rehak on 2/3/25
2715 Days since Hurricane Harvey
https://i0.wp.com/reduceflooding.com/wp-content/uploads/2022/12/20220722-RJR_0770-2.jpg?fit=1200%2C800&ssl=18001200adminadmin2025-02-03 17:11:002025-02-03 17:18:09CWA Beginning to Explore New Dam for Lake Houston
2/2/25 – National Weather Service statistics show that despite drought in the second half, 2024 ranked as the 8th wettest year in the last 25 at Bush Intercontinental Airport.
2017 was the highest year in 25. And 2011 was the lowest at 24.57 inches.
Abnormal Rainfall Distribution
In 2024, more than half of the normal rain for the year (52.1 inches) fell in just three months. They totaled 30.71 inches.
January had 8.77″ (more than double the mean of 3.94″ for the month)
May had 11.05″ (almost double the mean of 5.83″ for the month)
July had 10.89″ (more than double the mean of 4.45″ for the month)
Hurricane Beryl struck Houston on July 8 and dropped a normal month’s worth of rain in one day (4.72″). Beryl was the earliest Category 5 hurricane on record.
Graphics Tell the Story
The table below shows the official National Weather Service totals for each month since January 2000, plus the means, maximums and minimums.
In graphical form, here’s how 2024 compared to the high, low and normal years.
The distribution of heavy rainfalls throughout the year was unusual. January doesn’t normally have heavy rainfall. Neither does July. And while May ranks as one of our wetter months, last year we got almost twice the normal amount of rain in May.
At the other end of the spectrum, October usually ranks as our second wettest month.
But last October, it was our driest of the year by far…with less than a half inch of rain.
NWS provides a wealth of climate information for those willing to take the time to explore it. It doesn’t always fit popular narratives. If you want to teach critical thinking skills to your students, have them try to prove or disprove claims they see online by consulting data from trusted sources, such as NWS.
And make sure when they report their findings that they don’t just say “8th wettest year,” even though it may seem like that to them. Make sure they specify a date range, i.e., “2024 was 8th wettest year in last 25,” so no one assumes “ever.”
Posted by Bob Rehak on 2/2/25
2714 Days since Hurricane Harvey
https://i0.wp.com/reduceflooding.com/wp-content/uploads/2025/02/25-years-by-month-copy.jpg?fit=1200%2C1220&ssl=112201200adminadmin2025-02-02 18:30:562025-02-02 19:40:56Despite Drought in Second Half, 2024 Was 8th Wettest Year in the Last 25 at IAH
Climate-Related Risks Could Reduce Real Estate Values by $1.4 Trillion in Next 30 Years
2/4/25 – First Street Foundation released a new study today as part of its 12th National Risk Assessment. “Property Prices in Peril” estimates that real estate values could lose $1.4 trillion over the next 30 years due to climate-related risks. That number is unadjusted for inflation.
First Street specializes in climate risk financial modeling. Its clients include financial institutions, companies and governments. The organization announced the research in a webinar this morning. I will summarize it below.
Summary of Research
The basic premise: Homeownership has long been the primary pathway to wealth creation in the U.S. Prospective homeowners decide where to live by balancing quality of life and cost of living. That drives home value increases and decreases.
Crucial Role of Insurance Costs
But climate change is now causing many to recalibrate that value proposition as insurance costs now represent a higher proportion of mortgage costs than ever before. And First Street predicts premiums will continue to rise until they become actuarily sound.
The First Street presentation began with several slides on insurance rates and factors affecting them (losses, predicted risk increases, government regs, etc.). In some areas, monthly insurance payments could soon comprise 25% of total home payments. First Street predicts that…
In addition, money paid out to insurance companies does not appreciate like the home itself does. As a consequence, a lower percentage of a family’s total income will be available to build wealth from home ownership in the future.
Secondary Impacts
Further, the authors found that “The implications for local economies extend far beyond direct housing market effects to regional GDP, household financial stability, and public services.”
“Communities facing declining property values due to climate risks confront multiple economic threats,” says First Street. “Falling home equity reduces household wealth and borrowing capacity, constraining consumer spending and local economic activity.”
“Lower property assessments significantly impact state and local government revenues, with property taxes accounting for over 30% of local government funding nationwide. This reduction in revenue can trigger a vicious cycle, where limited funds hinder investments in critical climate adaptation infrastructure just when it is most urgently needed— further exacerbating the decline in property values.”
“States like Texas and Florida, which rely heavily on property taxes due to their no-income-tax structure, are increasingly exposed to fiscal risks as climate change threatens their tax base by impacting property values.”
Flooding Most Widespread Risk
“Flooding will emerge as the most geographically widespread driver of climate migration, leading 11.9 million Americans to relocate by 2055,” says the study.
“This migration pattern affects every region of the U.S., from coastal communities facing sea level rise and storm surge to inland areas facing fluvial flooding from rivers and streams to urban areas subject to pluvial flooding from heavy rainfall events,”
First Street projections indicate that “over one-third of U.S. counties and more than half the population are exposed to frequent, chronic flooding from precipitation alone.”
Effects of Climate Migration Most Apparent in Small Areas
Instead of looking at national and state trends, the First Street study looked at every census tract in the county. It found that housing choices at that micro-economic level are increasingly being driven by awareness of climate risks such as flooding.
Five Market Segments Illuminate Different Climate-Migration Patterns
Looking forward, First Street modeling segments neighborhoods into five categories:
The study found five counties in Texas fell into the “risky growth” category: Fort Bend, Denton, Williamson, Travis and Montgomery.
For More Information
To learn more, visit the First Street Foundation website where you will find links to:
Rehak’s Take
All in all, the authors made an excellent case for “climate caution.” That in itself could affect migration and home prices.
But the study did not address many of the factors that have made Texas one of the fastest growing states in the country, despite the fact that more people live in Texas floodplains than live in 30 states.
For instance, the study did not take into account immigration or variation in tax rates compared to other states.
I’m also a bit skeptical of any study that tries to project current trends 30 years into the future. Fifty years dealing with market research taught me how quickly trends can change.
Despite those concerns, the study makes excellent reading. It also makes a valuable contribution to our understanding of flooding and how it could impact the future of the Houston region.
Posted by Bob Rehak on 2/4/25
2716 Days since Hurricane Harvey
CWA Beginning to Explore New Dam for Lake Houston
2/3/25 – Minutes from the November and December board meetings of the Coastal Water Authority (CWA) suggest that the group is beginning to explore a new dam for Lake Houston, even as it plans repairs and additional gates for the old dam. This post explores the projects and how they fit together.
Discussion in November Board Meeting
During a Board discussion on 11/13/24 about repairs to the old dam, David Miller, PE, the CWA’s Operations Manager, “noted that the Lake Houston Dam is near the end of its design life and CWA is planning for a dam replacement project,” say the minutes.
Don Ripley, PE, the CWA’s General Manager, subsequently noted that repairs to the old dam “would keep the Lake Houston Dam in compliance with State of Texas dam safety requirements.”
Mr. Miller noted that repairs to the Lake Livingston Dam after May floods last year could cost the Trinity River Authority as much as $40 million.
December Minutes Offer More Detail
Then, during the 12/13/24 board meeting, the subjects of repairs to the old dam, a new dam, and additional gates arose again.
Repairs to Old Dam
The December minutes state: “The Lake Houston Dam Repair Project is the $10 million Pre-Disaster Mitigation Grant Project that is being implemented for immediate repairs, including grouting voids below and around the dam structure and repairing the spalled concrete on spillway buttress walls.”
“CWA and CWA’s project engineer, Freese and Nichols, Inc., are currently working on the scope and fee for additional field investigations and design/ engineering work and expect to bring this item to the Board for consideration in January 2025.” (However, the January minutes have not yet been posted.)
“The engineering work will specify the repair locations and approach to be implemented during construction. It is estimated that investigation and engineering work will take approximately six to eight months and construction will take approximately six to nine months in duration.”
Potential Dam Replacement
December minutes also state that, “Planning is also underway for a larger project to replace the existing 75-year old Lake Houston Dam. CWA will have Black & Veatch begin a high-level Lake Houston Dam Replacement Study in 2025.”
Additional Gates
A third Lake Houston Dam project that Directors discussed was additional gates. CWA is planning to add eleven new tainter gates to the dam for an additional 79,000 cubic feet per second of controlled discharge capacity.
“The design work is underway,” say the December minutes, “and will run through 2026. Current field activities underway include ground and bathymetric surveys. The geotechnical soil borings, environmental investigations including wetlands, endangered species and archeological sites will begin next week.”
“The design team is also scheduling meetings with all of the permitting agencies, including Texas Commission on Environmental Quality (TCEQ), United States Army Corps of Engineers (USACE-Galveston) and Texas Parks and Wildlife Department (TPWD), regarding project details and schedules.”
“CWA met with the TCEQ last week and will meet with USACE-Galveston and TPWD in the coming weeks to inform them of the project details and to obtain an understanding of their respective review schedules and the possibilities of expediting those review schedules.”
“In response to questions from Director Sjolander and Director Huberty, Mr. Ripley stated that this project will increase discharge capacity during flood events which will provide upstream benefits.”
Putting Multiple Projects in Perspective
I reached out to the Coastal Water Authority for more information about the repairs, gate expansion and replacement. I wondered why they just didn’t move full steam ahead on the replacement?
Ripley responded, “CWA does not [currently] have a project to replace the existing dam. CWA is only preparing very preliminary information concerning the possible costs to replace the dam at some time in the future. Replacement of the dam will involve years of planning and permitting before an actual project could be proposed.”
When you supply drinking water to two million people, you want to make sure you get the engineering right.
Posted by Bob Rehak on 2/3/25
2715 Days since Hurricane Harvey
Despite Drought in Second Half, 2024 Was 8th Wettest Year in the Last 25 at IAH
2/2/25 – National Weather Service statistics show that despite drought in the second half, 2024 ranked as the 8th wettest year in the last 25 at Bush Intercontinental Airport.
8th Wettest Year in Last 25
Bush received 59.17 inches in 2024 compared to:
2017 was the highest year in 25. And 2011 was the lowest at 24.57 inches.
Abnormal Rainfall Distribution
In 2024, more than half of the normal rain for the year (52.1 inches) fell in just three months. They totaled 30.71 inches.
Hurricane Beryl struck Houston on July 8 and dropped a normal month’s worth of rain in one day (4.72″). Beryl was the earliest Category 5 hurricane on record.
Graphics Tell the Story
The table below shows the official National Weather Service totals for each month since January 2000, plus the means, maximums and minimums.
In graphical form, here’s how 2024 compared to the high, low and normal years.
The distribution of heavy rainfalls throughout the year was unusual. January doesn’t normally have heavy rainfall. Neither does July. And while May ranks as one of our wetter months, last year we got almost twice the normal amount of rain in May.
At the other end of the spectrum, October usually ranks as our second wettest month.
But last October, it was our driest of the year by far…with less than a half inch of rain.
NWS provides a wealth of climate information for those willing to take the time to explore it. It doesn’t always fit popular narratives. If you want to teach critical thinking skills to your students, have them try to prove or disprove claims they see online by consulting data from trusted sources, such as NWS.
And make sure when they report their findings that they don’t just say “8th wettest year,” even though it may seem like that to them. Make sure they specify a date range, i.e., “2024 was 8th wettest year in last 25,” so no one assumes “ever.”
Posted by Bob Rehak on 2/2/25
2714 Days since Hurricane Harvey