Author Topic: America's coastal cities are a hidden time bomb  (Read 88255 times)

clarkfan1979

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Re: America's coastal cities are a hidden time bomb
« Reply #450 on: October 07, 2024, 08:30:13 AM »
Florida may be about to have a "Come to Jesus" moment on home insurance. Tropical Storm Milton has formed in the Gulf and is projected to make landfall on Wednesday as a Cat 3. A Cat 4 and Cat 3 in less than two weeks? Fuck.

More like "Fuck around [with the planet] and find out."

The irony, if climate change dropped enough hurricanes on Florida to turn it from red to purple or blue during a presidential election year, would be wild.

There is a current conspiracy theory that the "Liberal Left" is funding projects that "seed the clouds" to produce hurricanes to then "prove climate change is real" to win the Presidential Election.

GuitarStv

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Re: America's coastal cities are a hidden time bomb
« Reply #451 on: October 07, 2024, 09:21:50 AM »
Florida may be about to have a "Come to Jesus" moment on home insurance. Tropical Storm Milton has formed in the Gulf and is projected to make landfall on Wednesday as a Cat 3. A Cat 4 and Cat 3 in less than two weeks? Fuck.

More like "Fuck around [with the planet] and find out."

The irony, if climate change dropped enough hurricanes on Florida to turn it from red to purple or blue during a presidential election year, would be wild.

There is a current conspiracy theory that the "Liberal Left" is funding projects that "seed the clouds" to produce hurricanes to then "prove climate change is real" to win the Presidential Election.

Today I had a right leaning person explain to me that the severe storms in the US this year were all because of MAGNETIC RADIATION from the SOLAR MAX caused during the extreme GEOSTORM CYCLE we're undergoing.  Of course, there is a LOT of scientific data describing this but they couldn't provide any to me because it is all being SUPPRESSED and IGNORED.

The idea that people on the right will wake up and recognize reality seems to me rather idealistic and quaint.  More likely they'll just weave tighter conspiracy theories to explain things away.  Anyway, can't stay to talk - I gotta go crack open a couple cans of sacrificial child's blood so I can up my adenochrome levels and live forever.  (Remember, more than half of Republicans in the US believe in that.)

LaineyAZ

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Re: America's coastal cities are a hidden time bomb
« Reply #452 on: October 07, 2024, 09:30:29 AM »
GuitarStv,
don't forget our upcoming meeting on Declaring War on Christmas...start practicing yelling at retail workers who say Merry Christmas instead of Happy Solstice ..!

GuitarStv

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Re: America's coastal cities are a hidden time bomb
« Reply #453 on: October 07, 2024, 09:41:56 AM »
GuitarStv,
don't forget our upcoming meeting on Declaring War on Christmas...start practicing yelling at retail workers who say Merry Christmas instead of Happy Solstice ..!

Is that before or after we audition the crisis actors for the next school shooting we're planning?

MrGreen

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Re: America's coastal cities are a hidden time bomb
« Reply #454 on: October 07, 2024, 11:43:05 AM »
Florida may be about to have a "Come to Jesus" moment on home insurance. Tropical Storm Milton has formed in the Gulf and is projected to make landfall on Wednesday as a Cat 3. A Cat 4 and Cat 3 in less than two weeks? Fuck.

More like "Fuck around [with the planet] and find out."

The irony, if climate change dropped enough hurricanes on Florida to turn it from red to purple or blue during a presidential election year, would be wild.

With two back-to-back hurricanes with damage in the billions, it’s going to be extremely bad.  Particularly with lots of unexpected damages in North Carolina where climate risk isn’t really priced in.

I wonder what the spectrum of outcomes will be from the insurance industry. More firms will leave the state. Maybe some will be bankrupt. It sounds like Citizens wasn’t very far from needing to place an assessment on all of their policy holders already. It could be a big unexpected bill for many people that aren’t in the hurricanes path.

It’s pretty much guaranteed to have some impact on the election (particularly state and local races) but I don’t know Florida well enough to venture a guess on how. The biggest impact will simply be that many people in the throes of recovering from a hurricane will have bigger priorities than showing up on Election Day.  There will probably be a wide variance in turnout based on which counties get hit the hardest.
The insurance industry in NC wanted a 42% increase across the state and a 92% increase in coastal areas this year. The commissioner did not agree so the case is about the head to court. I'm afraid the aftermath of Helene is making the insurance inductry's case for them. Paying almost 2% of replacement value every year is crazy to me.

ChpBstrd

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Re: America's coastal cities are a hidden time bomb
« Reply #455 on: October 07, 2024, 12:14:54 PM »
Florida may be about to have a "Come to Jesus" moment on home insurance. Tropical Storm Milton has formed in the Gulf and is projected to make landfall on Wednesday as a Cat 3. A Cat 4 and Cat 3 in less than two weeks? Fuck.

More like "Fuck around [with the planet] and find out."

The irony, if climate change dropped enough hurricanes on Florida to turn it from red to purple or blue during a presidential election year, would be wild.

With two back-to-back hurricanes with damage in the billions, it’s going to be extremely bad.  Particularly with lots of unexpected damages in North Carolina where climate risk isn’t really priced in.

I wonder what the spectrum of outcomes will be from the insurance industry. More firms will leave the state. Maybe some will be bankrupt. It sounds like Citizens wasn’t very far from needing to place an assessment on all of their policy holders already. It could be a big unexpected bill for many people that aren’t in the hurricanes path.

It’s pretty much guaranteed to have some impact on the election (particularly state and local races) but I don’t know Florida well enough to venture a guess on how. The biggest impact will simply be that many people in the throes of recovering from a hurricane will have bigger priorities than showing up on Election Day.  There will probably be a wide variance in turnout based on which counties get hit the hardest.
The insurance industry in NC wanted a 42% increase across the state and a 92% increase in coastal areas this year. The commissioner did not agree so the case is about the head to court. I'm afraid the aftermath of Helene is making the insurance inductry's case for them. Paying almost 2% of replacement value every year is crazy to me.
I think Helene is going to result in insurance rate hikes in inland areas. The worst hit spots in NC were over 100 miles from the coast. I'm a few hundred miles from the Gulf coast, but I'm pretty sure I'll end up covering some hurricane damage in NC at renewal time. After Helene, who can say hurricane remnants won't come and flood my area?

Insurance and the housing affordability crisis are going to push American culture in the direction it needed to go anyway. We need to desire and build smaller houses, with smaller mortgages, smaller insurance bills, and smaller energy bills.

The McMansion mania era of the last 25 years may give way to an updated American Dream, which looks something like a 1,000 or 1,200sf cottage made of fireproof materials. Developments of 2BR homes may need to become a thing again, and small, inexpensive factory-built modular homes may be the future if they can be designed to be insurable. The new Mustachianism might be to own such a cottage free and clear, and to self-insure it.

swashbucklinstache

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Re: America's coastal cities are a hidden time bomb
« Reply #456 on: October 07, 2024, 01:04:35 PM »
I'm interested in what happens where people move, too. Are people aware that sleepy Midwest cities have property tax five times higher than Colorado, Alabama, Tennessee etc? How will those taxes change if population rises or the need for winter mitigation drops? A lot of my friends have this vague idea in their heads that they might have to migrate back some day, but how many others are thinking that too? Tides change. Go ask someone from 1955 if they'd pay 7x sticker price to live in Seattle instead of Detroit.

Glenstache

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Re: America's coastal cities are a hidden time bomb
« Reply #457 on: October 07, 2024, 01:39:12 PM »
Milton has upgraded to a Category 5 and is currently forecast to make landfall at Tampa as a Cat 3 hurricane. Milton intensified from Cat 1 to Cat 5 in 7 hours. Warm ocean temperatures at work. Jeebus.

Michael in ABQ

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Re: America's coastal cities are a hidden time bomb
« Reply #458 on: October 07, 2024, 01:50:00 PM »
I'm interested in what happens where people move, too. Are people aware that sleepy Midwest cities have property tax five times higher than Colorado, Alabama, Tennessee etc? How will those taxes change if population rises or the need for winter mitigation drops? A lot of my friends have this vague idea in their heads that they might have to migrate back some day, but how many others are thinking that too? Tides change. Go ask someone from 1955 if they'd pay 7x sticker price to live in Seattle instead of Detroit.

Maybe not 5x (unless you're in Illinois). But then again, a 3x higher tax rate on home that's half the price will basically balance out once you take into account cheaper homeowner's insurance as you're insuring less replacement cost. Not to mention the home cost half as much to begin with.

https://taxfoundation.org/data/all/state/property-taxes-by-state-county-2024/



Villanelle

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Re: America's coastal cities are a hidden time bomb
« Reply #459 on: October 07, 2024, 02:04:36 PM »
I wonder if we will see a shift toward less solid structures, rather than more solid.  Homes in Japan always struck me as being very cheaply built, especially given how the Japanese generally seem to embrace quality in most things.  Walls were thin.  Insulation was awful.**  The value of a home was in the land.  The structure was a quickly depreciating asset.  It seems that in most cases, when someone bought a new home, they tore down the old and put up a new one and the homes were built accordingly--to last a couple of decades, not half a century or more. 

This made them much cheaper to build or rebuild after a disaster.  I wonder if we will go more in that direction, especially in disaster-prone areas.  If the structure rebuild cost is $50k instead of $500k, insurance rates will stay lower, or at least less high.  Of course, that's far more junk that ends up in a landfill, but I guess it's less waste than tearing down a comparable-sized home built with more materials, so if it's going to be destroyed by weather anyway, maybe this is less bad?

**This part always struck we as odd, especially given electric costs and considerations.  Yes, people are more okay with a range of temperatures.  They don't cool to 68 in summer and heat to 70 in winter.  Low tables (kotatsu) with built-in heaters, covered by thick blankets are popular.  Everyone sits around the table with their legs under the blanket. You heat only the small area you need to use, not the whole house.  Central a/c or heat is rare, with mini-splits being common.  (This is why you really want a heated toilet seat; your bathroom will be freezing--perhaps almost literally--in winter.)

swashbucklinstache

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Re: America's coastal cities are a hidden time bomb
« Reply #460 on: October 07, 2024, 02:10:20 PM »
I'm interested in what happens where people move, too. Are people aware that sleepy Midwest cities have property tax five times higher than Colorado, Alabama, Tennessee etc? How will those taxes change if population rises or the need for winter mitigation drops? A lot of my friends have this vague idea in their heads that they might have to migrate back some day, but how many others are thinking that too? Tides change. Go ask someone from 1955 if they'd pay 7x sticker price to live in Seattle instead of Detroit.

Maybe not 5x (unless you're in Illinois). But then again, a 3x higher tax rate on home that's half the price will basically balance out once you take into account cheaper homeowner's insurance as you're insuring less replacement cost. Not to mention the home cost half as much to begin with.

https://taxfoundation.org/data/all/state/property-taxes-by-state-county-2024/

All true. But what will happen to the sticker price if people migrate? What if we experience sustained lower interest rates without an increase in housing price, making tax is an even higher percentage of cost? Also, a lot of Midwest stock is small and old. People with a median house in Tampa or Denver might find that their like-for-like house in Indianapolis is an 85th percentile house locally. Interesting times all around, I'm afraid. I expect we'll be fine unless the migration happens suddenly and wealthy people will be fine, but leanfire types should plan with caution against a get out of jail free migration card.

MrGreen

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Re: America's coastal cities are a hidden time bomb
« Reply #461 on: October 07, 2024, 02:22:50 PM »
I'm interested in what happens where people move, too. Are people aware that sleepy Midwest cities have property tax five times higher than Colorado, Alabama, Tennessee etc? How will those taxes change if population rises or the need for winter mitigation drops? A lot of my friends have this vague idea in their heads that they might have to migrate back some day, but how many others are thinking that too? Tides change. Go ask someone from 1955 if they'd pay 7x sticker price to live in Seattle instead of Detroit.

Maybe not 5x (unless you're in Illinois). But then again, a 3x higher tax rate on home that's half the price will basically balance out once you take into account cheaper homeowner's insurance as you're insuring less replacement cost. Not to mention the home cost half as much to begin with.

https://taxfoundation.org/data/all/state/property-taxes-by-state-county-2024/

I would think higher taxes lose out. A houses costs what it costs to build. Anything beyond that and the value is the land, which you don't insure. That's why quarter acre empty lots in Boulder County are 400-500k.

It's quite the gamification for a FIREd person to think about the cost structures you end up weighing when considering where to live. Health insurance premiums, property taxes, home insurance, utilities, and electric make up the bulk of one's fixed costs. That's just the money side.

swashbucklinstache

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Re: America's coastal cities are a hidden time bomb
« Reply #462 on: October 07, 2024, 02:41:41 PM »
I'm interested in what happens where people move, too. Are people aware that sleepy Midwest cities have property tax five times higher than Colorado, Alabama, Tennessee etc? How will those taxes change if population rises or the need for winter mitigation drops? A lot of my friends have this vague idea in their heads that they might have to migrate back some day, but how many others are thinking that too? Tides change. Go ask someone from 1955 if they'd pay 7x sticker price to live in Seattle instead of Detroit.

Maybe not 5x (unless you're in Illinois). But then again, a 3x higher tax rate on home that's half the price will basically balance out once you take into account cheaper homeowner's insurance as you're insuring less replacement cost. Not to mention the home cost half as much to begin with.

https://taxfoundation.org/data/all/state/property-taxes-by-state-county-2024/

I would think higher taxes lose out. A houses costs what it costs to build. Anything beyond that and the value is the land, which you don't insure. That's why quarter acre empty lots in Boulder County are 400-500k.

It's quite the gamification for a FIREd person to think about the cost structures you end up weighing when considering where to live. Health insurance premiums, property taxes, home insurance, utilities, and electric make up the bulk of one's fixed costs. That's just the money side.
I'm sorry for taking us off-topic but I laughed a bit since I live in Boulder =).

That does remind me that utility costs vary a lot by region too. Look at Denver electricity compared to Minneapolis, plus you might need to use a ton more of it to with colder winters and humid summers.
https://www.bls.gov/regions/midwest/data/averageenergyprices_selectedareas_table.htm. Of course gas can be different. And where I grew up no one's ever heard of a car emissions test and would fall over at registration costs. And on and on in both directions - have you ever heated your engine block overnight? Watered your foundation?

Who knows how any of these things will change for Midwesterners with climate and migration. Just make sure to look beyond sticker price and be a little careful if half your NW is in a small costal house or mountain town kinda thing. Coasties' ticking time bomb might be even worse the deeper you look and it'll impact us all.
« Last Edit: October 07, 2024, 02:44:58 PM by swashbucklinstache »

roomtempmayo

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Re: America's coastal cities are a hidden time bomb
« Reply #463 on: October 07, 2024, 02:58:51 PM »

Insurance and the housing affordability crisis are going to push American culture in the direction it needed to go anyway.

I'm struggling to think of an example where markets forced a change in the desired status quo of American lifestyles.  Maybe the emergence of small cars in response to the oil embargo?  But then we pretty quickly, by engineering and foreign intervention, restored the status quo of big vehicles going long distances for cheap.

I guess I'm not confident at all that American lifestyles will change, even when it seems inevitable.  So many elements of the American status quo (housing, healthcare, education) have seemed untenable for decades, and yet here we are.

MrGreen

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Re: America's coastal cities are a hidden time bomb
« Reply #464 on: October 07, 2024, 03:55:12 PM »

Insurance and the housing affordability crisis are going to push American culture in the direction it needed to go anyway.

I'm struggling to think of an example where markets forced a change in the desired status quo of American lifestyles.  Maybe the emergence of small cars in response to the oil embargo?  But then we pretty quickly, by engineering and foreign intervention, restored the status quo of big vehicles going long distances for cheap.

I guess I'm not confident at all that American lifestyles will change, even when it seems inevitable.  So many elements of the American status quo (housing, healthcare, education) have seemed untenable for decades, and yet here we are.
This would assume we're able to engineer similar cost efficiencies in the housing market. It's definitely possible but building codes seem much more lethargic to change. If anything it seems that newer codes are adding cost as we recognize the need for higher R-values (insulation), fire retardants, etc. Obviously safety comes into play but at some point I do have to wonder if it would be better in the long run to not require these expensive building materials and people can more affordably.self-insure. Then if the house burns down you just build another.

Sailor Sam

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Re: America's coastal cities are a hidden time bomb
« Reply #465 on: October 07, 2024, 04:03:09 PM »
Milton has upgraded to a Category 5 and is currently forecast to make landfall at Tampa as a Cat 3 hurricane. Milton intensified from Cat 1 to Cat 5 in 7 hours. Warm ocean temperatures at work. Jeebus.

The central pressure is 905mb as of the 2100UTC update. JEEBUS.

roomtempmayo

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Re: America's coastal cities are a hidden time bomb
« Reply #466 on: October 07, 2024, 04:24:54 PM »

Insurance and the housing affordability crisis are going to push American culture in the direction it needed to go anyway.

I'm struggling to think of an example where markets forced a change in the desired status quo of American lifestyles.  Maybe the emergence of small cars in response to the oil embargo?  But then we pretty quickly, by engineering and foreign intervention, restored the status quo of big vehicles going long distances for cheap.

I guess I'm not confident at all that American lifestyles will change, even when it seems inevitable.  So many elements of the American status quo (housing, healthcare, education) have seemed untenable for decades, and yet here we are.
This would assume we're able to engineer similar cost efficiencies in the housing market. It's definitely possible but building codes seem much more lethargic to change. If anything it seems that newer codes are adding cost as we recognize the need for higher R-values (insulation), fire retardants, etc. Obviously safety comes into play but at some point I do have to wonder if it would be better in the long run to not require these expensive building materials and people can more affordably.self-insure. Then if the house burns down you just build another.

I don't know that it assumes any particular way of avoiding change, so much as people doing something, anything to limp the status quo along.

Alternatives probably include direct government subsidies of an even greater scale, forced cost pooling, or some exotic financial instruments I can't exactly imagine. 

bacchi

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Re: America's coastal cities are a hidden time bomb
« Reply #467 on: October 07, 2024, 04:30:02 PM »
Milton has upgraded to a Category 5 and is currently forecast to make landfall at Tampa as a Cat 3 hurricane. Milton intensified from Cat 1 to Cat 5 in 7 hours. Warm ocean temperatures at work. Jeebus.

The central pressure is 905mb as of the 2100UTC update. JEEBUS.

And 175 mph winds. That's a massive increase in power in about 24 hours.

Michael in ABQ

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Re: America's coastal cities are a hidden time bomb
« Reply #468 on: October 07, 2024, 04:32:09 PM »
Milton has upgraded to a Category 5 and is currently forecast to make landfall at Tampa as a Cat 3 hurricane. Milton intensified from Cat 1 to Cat 5 in 7 hours. Warm ocean temperatures SPACE LASERS AND HAARP at work!. Jeebus.

Fixed



Sigh, if only people could do the math and calculate the amount of energy required for a hurricane to form and move and realize it's more than all of human civilization can produce in months or years. Of course, the kind of people who think the government can control hurricanes probably couldn't comprehend the math necessary to realize why it's such an absurd conspiracy theory.

NorCal

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Re: America's coastal cities are a hidden time bomb
« Reply #469 on: October 07, 2024, 04:34:17 PM »
I'm interested in what happens where people move, too. Are people aware that sleepy Midwest cities have property tax five times higher than Colorado, Alabama, Tennessee etc? How will those taxes change if population rises or the need for winter mitigation drops? A lot of my friends have this vague idea in their heads that they might have to migrate back some day, but how many others are thinking that too? Tides change. Go ask someone from 1955 if they'd pay 7x sticker price to live in Seattle instead of Detroit.

I did a math exercise maybe a decade ago. I took total tax revenue collected from each state and divided it by the population.

I forget the exact details, but it did come out as fairly comparable across states. Many states we think of as “high tax” were middle of the pack. Some states we think of as “low tax” collected a lot of revenue per capita. Alaska has the highest revenue per capita, presumably due to oil income.

Wikipedia lays the relevant numbers out in an easy to manipulate table.

Blackeagle

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Re: America's coastal cities are a hidden time bomb
« Reply #470 on: October 07, 2024, 06:35:15 PM »
Florida may be about to have a "Come to Jesus" moment on home insurance. Tropical Storm Milton has formed in the Gulf and is projected to make landfall on Wednesday as a Cat 3. A Cat 4 and Cat 3 in less than two weeks? Fuck.

More like "Fuck around [with the planet] and find out."

The irony, if climate change dropped enough hurricanes on Florida to turn it from red to purple or blue during a presidential election year, would be wild.

There is a current conspiracy theory that the "Liberal Left" is funding projects that "seed the clouds" to produce hurricanes to then "prove climate change is real" to win the Presidential Election.

Today I had a right leaning person explain to me that the severe storms in the US this year were all because of MAGNETIC RADIATION from the SOLAR MAX caused during the extreme GEOSTORM CYCLE we're undergoing.  Of course, there is a LOT of scientific data describing this but they couldn't provide any to me because it is all being SUPPRESSED and IGNORED.


Blackeagle

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Re: America's coastal cities are a hidden time bomb
« Reply #471 on: October 07, 2024, 06:41:44 PM »
I’ve been dreaming of moving into an expensive tiny apartment in a crowded city, so I can reduce my infrastructure footprint.
Well you could live in Whitter Alaska where everyone, and all the stores, restaurants, and even a bowling alley live in one building ;-).

https://www.npr.org/2015/01/18/378162264/welcome-to-whittier-alaska-a-community-under-one-roof

The military built two massive buildings in Whittier back in the '50s: Begich Towers, referenced in the article, where most of the town population lives, and the Buckner Building, which was abandoned in the '70s and now reportedly sometimes has bears roaming the halls.

spartana

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Re: America's coastal cities are a hidden time bomb
« Reply #472 on: October 07, 2024, 09:29:57 PM »
There are a lot around but, at least those on the coastal part of the West Coast, are massively expensive to buy or rent. Plus, sadly, are very over run by drugs now and the problems (homeless, squalor and crime mostly) that occurs with that. But mostly it's the cost. When that 600 SF 2 bedroom bungalow in Monterey or Santa Cruz or Santa Barbara cost close to $2 million it doesn't matter how cute and walkable they are. Plus they all come with their own natural disaster risks too.

Eta just looked up walkable small cities in Calif and Santa Cruz was rated the most walkable in CA and the most expensive housing-wise... in the nation!  I personally wouldn't live there now but years ago it was pretty awesome.

Well it is charming ;-): https://www.zillow.com/homedetails/106-Doane-St-Santa-Cruz-CA-95062/16112277_zpid/

Heh, I used to live a block from that house. Love that neighborhood, but it's highly impacted by tourists. Between beach goers and those looking to avoid parking fees at the Boardwalk and parking is a mess, and this house has on street parking. And it's not really walkable, though there are some nice restaurants and a great climbing gym nearby. The nearest grocery store is downtown, though the New Leaf is closing in October so will be down to Trader Joe's. There are a few walkable areas in Santa Cruz, e.g. downtown and the area around Swift St. Biking is usually a better option and I biked all over town, though safety and bike theft are a real concern: https://lookout.co/riding-my-bike-on-the-santa-cruz-levee-bike-path-is-making-me-change-my-politics-its-too-dangerous-here-to-be-green/
That neighborhood is cute and easy walking to most places. I go up the coast from O.C. a couple of times a year and ogle all the lovely towns that most working stiffs can no longer afford. I generally park up by the lighthouse and walk the coast path from end to end and then thru town and the boardwalk. It's a great walk and the surfing, kayaking, hiking in the redwoods and beach volleyball are awesome and it still has that old Calif beach bum vibe (pre-homeless and drug issues) and you don't feel like your amongst the rich but I do feel less safe there then in the past. Especially downtown.

It's too bad as it use to be a great place and would be pretty perfect . Monterey is also great but like most small cities it is severely over priced, crowded and becoming more crime ridden. Plus with the earthquakes, mudslides and huge wild fire risk it's a high disaster risk area. I generally tent camp at the Henry Cowell Redwood Grove state park. Love that whole area. Although biking is scary but beautiful.

It's a very cute neighborhood and we enjoyed living there. And there are a lot of great places to walk to, so in that sense it is walkable. My point is, for day to day living it's not easy on foot.

If you need eggs or something from the drug store (Longs before it became CVS) that's a very long trek by foot, not practical. During summer/weekends/holidays you hate to take the car because you know you'll be circling the block looking for parking when you get back. So we biked a lot. Biking in Santa Cruz, like many American cities, is a mixed bag because the infrastructure is fragmented. There are some really nice trails and bike lanes, but these often dump bikers on to stressful roads or scary crime spots.

The root of the problem is that biking has typically been viewed as recreation first, and second as transportation of last resort (i.e. for the homeless). So getting from that neighborhood to downtown we'd have to bike down a stretch of E Cliff Dr, but there's no bike lane there and the cars drive very aggressively. For this reason we'd bike on the sidewalk (which I believe is not legal) to get to the Riverwalk path which would take us all the way to downtown w/o any intersections. The Riverwalk path is an amazing way to get around Santa Cruz and avoid the terrible traffic, and it has the potential to be a beautiful and pleasant experience, but it has a lot of crime and drug issues (per the article linked up thread).

To be clear, Santa Cruz isn't a bad place to live, and we certainly don't hate the area. But there are some pretty big trade-offs living there. We were always very internally conflicted about it as we could never find walkable/bikeable neighborhoods that were also clean/safe and somewhat affordable. We did a couple of big road trips around the western US to explore our options and found a number of cities that were a much better fit for us.

Santa Cruz is finally starting to propose and build higher density housing downtown and along transportation corridors. If enough gets built it should greatly improve walkability in desirable areas. And if they can address the crime/blight issues (stuff like Prop 36) then I can see moving back at some point. Though this would have to wait until the kids are out of the house as we don't want to uproot them again now that they're older and have good peer groups.
I.think since you've made the move already out of that area to a better-for-you place then you'll probably never want to.go back. But then lots of Californians want to do that so who knows? Most are priced out of the market now though. With those huge wildfires and mudslides there a few years ago (and I seem to.remeber a big earthquake in the SC mountains being pretty devastation not too long ago)  I'd have to do some serious soul searching before moving there - or at least buying there - including most places in Calif. 

We took a recent trip up the central coast (Pismo Beach to Santa Cruz) to look at housing and would likely choose to rent in most towns in that area. While less expensive than coastal SoCal or the Bay area Its still high and a lot more natural disaster prone.
« Last Edit: October 07, 2024, 09:32:55 PM by spartana »

spartana

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Re: America's coastal cities are a hidden time bomb
« Reply #473 on: October 07, 2024, 09:35:10 PM »
I’ve been dreaming of moving into an expensive tiny apartment in a crowded city, so I can reduce my infrastructure footprint.
Well you could live in Whitter Alaska where everyone, and all the stores, restaurants, and even a bowling alley live in one building ;-).

https://www.npr.org/2015/01/18/378162264/welcome-to-whittier-alaska-a-community-under-one-roof

The military built two massive buildings in Whittier back in the '50s: Begich Towers, referenced in the article, where most of the town population lives, and the Buckner Building, which was abandoned in the '70s and now reportedly sometimes has bears roaming the halls.
I was stati9ned out of Anchorage for 4 years and had to go to Whittier a couple of times. Definitely a weird and interesting place. Wouldn't want to live there though!

Telecaster

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Re: America's coastal cities are a hidden time bomb
« Reply #474 on: October 07, 2024, 10:22:09 PM »
Whittier is one of the most incredibly beautiful places on Earth.   No way would I live there. 

FINate

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Re: America's coastal cities are a hidden time bomb
« Reply #475 on: October 08, 2024, 06:19:55 AM »
There are a lot around but, at least those on the coastal part of the West Coast, are massively expensive to buy or rent. Plus, sadly, are very over run by drugs now and the problems (homeless, squalor and crime mostly) that occurs with that. But mostly it's the cost. When that 600 SF 2 bedroom bungalow in Monterey or Santa Cruz or Santa Barbara cost close to $2 million it doesn't matter how cute and walkable they are. Plus they all come with their own natural disaster risks too.

Eta just looked up walkable small cities in Calif and Santa Cruz was rated the most walkable in CA and the most expensive housing-wise... in the nation!  I personally wouldn't live there now but years ago it was pretty awesome.

Well it is charming ;-): https://www.zillow.com/homedetails/106-Doane-St-Santa-Cruz-CA-95062/16112277_zpid/

Heh, I used to live a block from that house. Love that neighborhood, but it's highly impacted by tourists. Between beach goers and those looking to avoid parking fees at the Boardwalk and parking is a mess, and this house has on street parking. And it's not really walkable, though there are some nice restaurants and a great climbing gym nearby. The nearest grocery store is downtown, though the New Leaf is closing in October so will be down to Trader Joe's. There are a few walkable areas in Santa Cruz, e.g. downtown and the area around Swift St. Biking is usually a better option and I biked all over town, though safety and bike theft are a real concern: https://lookout.co/riding-my-bike-on-the-santa-cruz-levee-bike-path-is-making-me-change-my-politics-its-too-dangerous-here-to-be-green/
That neighborhood is cute and easy walking to most places. I go up the coast from O.C. a couple of times a year and ogle all the lovely towns that most working stiffs can no longer afford. I generally park up by the lighthouse and walk the coast path from end to end and then thru town and the boardwalk. It's a great walk and the surfing, kayaking, hiking in the redwoods and beach volleyball are awesome and it still has that old Calif beach bum vibe (pre-homeless and drug issues) and you don't feel like your amongst the rich but I do feel less safe there then in the past. Especially downtown.

It's too bad as it use to be a great place and would be pretty perfect . Monterey is also great but like most small cities it is severely over priced, crowded and becoming more crime ridden. Plus with the earthquakes, mudslides and huge wild fire risk it's a high disaster risk area. I generally tent camp at the Henry Cowell Redwood Grove state park. Love that whole area. Although biking is scary but beautiful.

It's a very cute neighborhood and we enjoyed living there. And there are a lot of great places to walk to, so in that sense it is walkable. My point is, for day to day living it's not easy on foot.

If you need eggs or something from the drug store (Longs before it became CVS) that's a very long trek by foot, not practical. During summer/weekends/holidays you hate to take the car because you know you'll be circling the block looking for parking when you get back. So we biked a lot. Biking in Santa Cruz, like many American cities, is a mixed bag because the infrastructure is fragmented. There are some really nice trails and bike lanes, but these often dump bikers on to stressful roads or scary crime spots.

The root of the problem is that biking has typically been viewed as recreation first, and second as transportation of last resort (i.e. for the homeless). So getting from that neighborhood to downtown we'd have to bike down a stretch of E Cliff Dr, but there's no bike lane there and the cars drive very aggressively. For this reason we'd bike on the sidewalk (which I believe is not legal) to get to the Riverwalk path which would take us all the way to downtown w/o any intersections. The Riverwalk path is an amazing way to get around Santa Cruz and avoid the terrible traffic, and it has the potential to be a beautiful and pleasant experience, but it has a lot of crime and drug issues (per the article linked up thread).

To be clear, Santa Cruz isn't a bad place to live, and we certainly don't hate the area. But there are some pretty big trade-offs living there. We were always very internally conflicted about it as we could never find walkable/bikeable neighborhoods that were also clean/safe and somewhat affordable. We did a couple of big road trips around the western US to explore our options and found a number of cities that were a much better fit for us.

Santa Cruz is finally starting to propose and build higher density housing downtown and along transportation corridors. If enough gets built it should greatly improve walkability in desirable areas. And if they can address the crime/blight issues (stuff like Prop 36) then I can see moving back at some point. Though this would have to wait until the kids are out of the house as we don't want to uproot them again now that they're older and have good peer groups.
I.think since you've made the move already out of that area to a better-for-you place then you'll probably never want to.go back. But then lots of Californians want to do that so who knows? Most are priced out of the market now though. With those huge wildfires and mudslides there a few years ago (and I seem to.remeber a big earthquake in the SC mountains being pretty devastation not too long ago)  I'd have to do some serious soul searching before moving there - or at least buying there - including most places in Calif. 

We took a recent trip up the central coast (Pismo Beach to Santa Cruz) to look at housing and would likely choose to rent in most towns in that area. While less expensive than coastal SoCal or the Bay area Its still high and a lot more natural disaster prone.

Oh for sure, it's not anywhere near a real plan. There's no doubt that the move to Boise was the right thing for our family, and it is *way* less disaster prone. But we still have friends and family in Santa Cruz, and we enjoy visiting. For us to even seriously consider moving back the atrocious COL and crime issues would need be addressed -- not easy problems to fix though I'm seeing some movement in the right direction. Living in the mountains with the landslides and fires is not something we'd consider, would have to be a condo/apartment downtown or other walkable area. I lived ~10 miles from 1989 Loma Prieta earthquake epicenter and know that the big one will happen at some point, but would not be too worried about it in something built to modern earthquake codes on stable geology. All that said, if we're ever looking to relocate again we'll evaluate Santa Cruz, but would also cast a wide net as I think there are lots of wonderful, interesting places to live in the US.
« Last Edit: October 08, 2024, 06:21:33 AM by FINate »

AccidentialMustache

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Re: America's coastal cities are a hidden time bomb
« Reply #476 on: October 08, 2024, 08:06:50 AM »
I would think higher taxes lose out. A houses costs what it costs to build. Anything beyond that and the value is the land, which you don't insure. That's why quarter acre empty lots in Boulder County are 400-500k.

It's quite the gamification for a FIREd person to think about the cost structures you end up weighing when considering where to live. Health insurance premiums, property taxes, home insurance, utilities, and electric make up the bulk of one's fixed costs. That's just the money side.

Not really true about it costs what it costs to build. https://todayshomeowner.com/home-finances/guides/cost-of-building-a-home-by-state/

Quote
The average cost of building a 2,100-square-foot home in the U.S. is $332,376, or $158 per square foot.

Building the same 2,100-square-foot home varies by more than $140,000 across states.

That's almost a 50% variance in cost to build!

AnotherEngineer

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Re: America's coastal cities are a hidden time bomb
« Reply #477 on: October 08, 2024, 08:18:39 AM »
Whittier is one of the most incredibly beautiful places on Earth.   No way would I live there.

Alaskans say to replace the "W" with an "S" and you describe most of the time in Whittier. Those rare bluebird days are something special though. I'm not sure being connected to civilization by a single one-mile long tunnel in an earthquake zone is "resilient" but there is always the three hour ferry to Valdez.

MrGreen

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Re: America's coastal cities are a hidden time bomb
« Reply #478 on: October 08, 2024, 08:59:29 AM »
I would think higher taxes lose out. A houses costs what it costs to build. Anything beyond that and the value is the land, which you don't insure. That's why quarter acre empty lots in Boulder County are 400-500k.

It's quite the gamification for a FIREd person to think about the cost structures you end up weighing when considering where to live. Health insurance premiums, property taxes, home insurance, utilities, and electric make up the bulk of one's fixed costs. That's just the money side.

Not really true about it costs what it costs to build. https://todayshomeowner.com/home-finances/guides/cost-of-building-a-home-by-state/

Quote
The average cost of building a 2,100-square-foot home in the U.S. is $332,376, or $158 per square foot.

Building the same 2,100-square-foot home varies by more than $140,000 across states.

That's almost a 50% variance in cost to build!
It's based on local cost of labor and materials, yes. What I meant was all the value beyond what it costs to build a house is in the land. If it cost 500k to build the structure but demand in the area makes it a $1 million property, the other 500k value is in the land, and you'll see vacant lots selling for that much. It doesn't mean the structure is worth more than the cost to build because of demand.

This is most notable with oceanfront property. A $1.5 million house may cost 500k to build, meaning the lot is worth $1 million. If erosion on a barrier island eats enough of the lot that a house cannot be rebuilt, the owner is out $1 million. You cannot insure the value of the land and the insurance company will not pay you for that loss. This is an unfortunate situation playing out in WNC right now where riverfront homes had the earth eaten from under them. Those lots no longer exist. The government will not let those people rebuild. They'll get paid the value of their house as a total loss but that's just the structure. Whatever value was in the land just evaporated with no way to recover it.
« Last Edit: October 08, 2024, 09:04:06 AM by MrGreen »

theoverlook

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Re: America's coastal cities are a hidden time bomb
« Reply #479 on: October 08, 2024, 01:13:04 PM »
I'm interested in what happens where people move, too. Are people aware that sleepy Midwest cities have property tax five times higher than Colorado, Alabama, Tennessee etc? How will those taxes change if population rises or the need for winter mitigation drops? A lot of my friends have this vague idea in their heads that they might have to migrate back some day, but how many others are thinking that too? Tides change. Go ask someone from 1955 if they'd pay 7x sticker price to live in Seattle instead of Detroit.

Maybe not 5x (unless you're in Illinois). But then again, a 3x higher tax rate on home that's half the price will basically balance out once you take into account cheaper homeowner's insurance as you're insuring less replacement cost. Not to mention the home cost half as much to begin with.

https://taxfoundation.org/data/all/state/property-taxes-by-state-county-2024/

Interesting; I'm in central Ohio and pay just about exactly 2.1% property taxes. They're pretty painful.

ChpBstrd

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Re: America's coastal cities are a hidden time bomb
« Reply #480 on: October 08, 2024, 01:38:03 PM »
I'm interested in what happens where people move, too. Are people aware that sleepy Midwest cities have property tax five times higher than Colorado, Alabama, Tennessee etc? How will those taxes change if population rises or the need for winter mitigation drops? A lot of my friends have this vague idea in their heads that they might have to migrate back some day, but how many others are thinking that too? Tides change. Go ask someone from 1955 if they'd pay 7x sticker price to live in Seattle instead of Detroit.

Maybe not 5x (unless you're in Illinois). But then again, a 3x higher tax rate on home that's half the price will basically balance out once you take into account cheaper homeowner's insurance as you're insuring less replacement cost. Not to mention the home cost half as much to begin with.

https://taxfoundation.org/data/all/state/property-taxes-by-state-county-2024/

Interesting; I'm in central Ohio and pay just about exactly 2.1% property taxes. They're pretty painful.
I'm in Arkansas and pay about half a percent in property taxes, but 9.5% sales taxes, plus about 4% of AGI income taxes.

swashbucklinstache

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Re: America's coastal cities are a hidden time bomb
« Reply #481 on: October 08, 2024, 02:03:57 PM »
I would think higher taxes lose out. A houses costs what it costs to build. Anything beyond that and the value is the land, which you don't insure. That's why quarter acre empty lots in Boulder County are 400-500k.

It's quite the gamification for a FIREd person to think about the cost structures you end up weighing when considering where to live. Health insurance premiums, property taxes, home insurance, utilities, and electric make up the bulk of one's fixed costs. That's just the money side.

Not really true about it costs what it costs to build. https://todayshomeowner.com/home-finances/guides/cost-of-building-a-home-by-state/

Quote
The average cost of building a 2,100-square-foot home in the U.S. is $332,376, or $158 per square foot.

Building the same 2,100-square-foot home varies by more than $140,000 across states.

That's almost a 50% variance in cost to build!
It's based on local cost of labor and materials, yes. What I meant was all the value beyond what it costs to build a house is in the land. If it cost 500k to build the structure but demand in the area makes it a $1 million property, the other 500k value is in the land, and you'll see vacant lots selling for that much. It doesn't mean the structure is worth more than the cost to build because of demand.

This is most notable with oceanfront property. A $1.5 million house may cost 500k to build, meaning the lot is worth $1 million. If erosion on a barrier island eats enough of the lot that a house cannot be rebuilt, the owner is out $1 million. You cannot insure the value of the land and the insurance company will not pay you for that loss. This is an unfortunate situation playing out in WNC right now where riverfront homes had the earth eaten from under them. Those lots no longer exist. The government will not let those people rebuild. They'll get paid the value of their house as a total loss but that's just the structure. Whatever value was in the land just evaporated with no way to recover it.
Further, it doesn't have to actually hit your property. What happens if your 1.5 million dollar house with 1 million dollars in property value loses half the property value due to climate change repricing right while people are migrating? You might be hundreds of thousands of dollars underwater right when climate-safe places prices jump up. There's not, to my knowledge, insurance you can buy for your property value getting cut in half. That much in property value is just fragile if it's a lot of your NW, like a NYC taxi medallion. Heck, if your house burns down tomorrow your 3% interest mortgage goes with it, you'll need a brand new 7% mortgage in a high property tax state with rising sticker price right? I guess we can look again to Detroit's decline to see it's usually not so bad for the rich who get out early.

I've idly wondered about buying a house with low relative property value and about not buying a house in a state touching the ocean or fire areas. I wouldn't recommend protectively thinking that way or anything, I'm just spending time thinking where to live and RE# and it factors in a bit.

chasesfish

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Re: America's coastal cities are a hidden time bomb
« Reply #482 on: October 08, 2024, 05:10:10 PM »
The older guy at the dog park today that was proud of dropping his homeowners insurance didn't seem as thrilled today.

Lives on a waterway island with around 12' of elevation.

In his defense, the lot is worth 3x what he paid for the house + lot years ago, but would still be a pain to move vs. rebuild.

bacchi

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Re: America's coastal cities are a hidden time bomb
« Reply #483 on: October 08, 2024, 05:11:57 PM »
In his defense, the lot is worth 3x what he paid for the house + lot years ago, but would still be a pain to move vs. rebuild.

Last week it was...

clarkfan1979

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Re: America's coastal cities are a hidden time bomb
« Reply #484 on: October 08, 2024, 08:52:58 PM »
I would like to chime in on the property taxes, coming from a former Illinois resident. While the state might average 2%, Chicagoland is around 3%. I lived in a house as a kid that had property taxes at 5.6% at one point in time. In 2013, it sold for 140K and the property taxes were $7854/year. When I look it up on Zillow, the property taxes only go to 2022. They were $9350/year in 2022 and Zillow had the property valued at 290K, so that's 3.2%   

I now live in Colorado. I have a primary house and a rental. My primary is worth 400K and the taxes are 2750/year, so that's 0.69%. For the rental property, it's worth 525K and the property taxes are $3123/year, so that's 0.59%.

Florida and Hawaii both charge higher property taxes for second homes vs. primary residence. Not sure why Colorado doesn't do that. 
« Last Edit: October 08, 2024, 08:57:35 PM by clarkfan1979 »

2sk22

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Re: America's coastal cities are a hidden time bomb
« Reply #485 on: October 09, 2024, 03:41:26 AM »
It's based on local cost of labor and materials, yes. What I meant was all the value beyond what it costs to build a house is in the land. If it cost 500k to build the structure but demand in the area makes it a $1 million property, the other 500k value is in the land, and you'll see vacant lots selling for that much. It doesn't mean the structure is worth more than the cost to build because of demand.

This is most notable with oceanfront property. A $1.5 million house may cost 500k to build, meaning the lot is worth $1 million. If erosion on a barrier island eats enough of the lot that a house cannot be rebuilt, the owner is out $1 million. You cannot insure the value of the land and the insurance company will not pay you for that loss. This is an unfortunate situation playing out in WNC right now where riverfront homes had the earth eaten from under them. Those lots no longer exist. The government will not let those people rebuild. They'll get paid the value of their house as a total loss but that's just the structure. Whatever value was in the land just evaporated with no way to recover it.

Indeed, the very basis for home insurance is that the land on which the house is standing will not disappear! Clearly this will have to be revisited in the future.

Its not just Florida - 12 years after Sandy hit us in NJ, there are still people building houses on delicate barrier islands on the Atlantic coast.

This article is from 9 years ago

Quote
Along the New Jersey and New York coasts after Hurricane Sandy, down the shores of Virginia and North Carolina following major storms, and across the Gulf of Mexico coast in the wake of recent hurricanes, rebuilding has taken place on dozens of vulnerable barrier islands. Not only does this recurring reconstruction place billions of dollars of property at risk, but it often means the construction of hugely expensive flood protection and storm-control projects that can harm coastal ecosystems.
« Last Edit: October 09, 2024, 03:43:53 AM by 2sk22 »

GilesMM

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Re: America's coastal cities are a hidden time bomb
« Reply #486 on: October 09, 2024, 06:44:28 AM »
I would like to chime in on the property taxes, coming from a former Illinois resident. While the state might average 2%, Chicagoland is around 3%. I lived in a house as a kid that had property taxes at 5.6% at one point in time. In 2013, it sold for 140K and the property taxes were $7854/year. When I look it up on Zillow, the property taxes only go to 2022. They were $9350/year in 2022 and Zillow had the property valued at 290K, so that's 3.2%   

I now live in Colorado. I have a primary house and a rental. My primary is worth 400K and the taxes are 2750/year, so that's 0.69%. For the rental property, it's worth 525K and the property taxes are $3123/year, so that's 0.59%.

Florida and Hawaii both charge higher property taxes for second homes vs. primary residence. Not sure why Colorado doesn't do that.


We just sold a property in Chicago (Lakeview) that was taxed at a 2.1% rate (like most Chicago properties) but undervalued by the county.  Using the sales price the rate was 1.5% which is pretty reasonable given all the public services provided by the city and county.  Our rural place in the PNW was taxed around 0.5% but with minimal services provided - fire dept was 20 minutes away, sheriff could be 30 minutes or more, no water, no sewer, no public transport, nada.

ChpBstrd

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Re: America's coastal cities are a hidden time bomb
« Reply #487 on: October 09, 2024, 06:56:54 AM »
Indeed, the very basis for home insurance is that the land on which the house is standing will not disappear! Clearly this will have to be revisited in the future.
At some point the land might be depreciated even if it stays stable. What is a lot worth if regulations prevent the building of houses there? What's it worth if any house you build will be uninsurable? Would a $200k lot become a $100k lot if the insurance bill for a typical house there rose from $4k per year to $18k per year?

In economic terms it should depreciate. In cultural terms, our world produces a lot of YOLO people who are willing to work very long hours to have a house near the beach someday, so money keeps getting flung at these sandbar houses.

When we look back in time at how housing was affordably priced during the 1970s and 1980s, we realize it was high mortgage rates keeping prices down. Insurance costs might have a similar effect.

NorCal

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Re: America's coastal cities are a hidden time bomb
« Reply #488 on: October 09, 2024, 07:05:56 AM »
Keep in mind that property tax rates are also tied to the cost of housing.

A 1% rate on a $1.5M SF Bay Area shack is similar to a 3% rate on a $500k medium sized house in a lower COL area.

That’s why I think it always makes sense to look at it on a per-capita basis when talking about public policy implications.

GilesMM

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Re: America's coastal cities are a hidden time bomb
« Reply #489 on: October 09, 2024, 07:13:41 AM »
Indeed, the very basis for home insurance is that the land on which the house is standing will not disappear! Clearly this will have to be revisited in the future.


Property insurance protects the building and doesn't care what happens to the land.  If the land is affected by flooding, that is too bad.  If the flooding affects the house, it will be covered if flood insurance was in place.  If the land slumps away, the house will probably not be covered as this coverage is not readily available and is typically specifically excluded on homeowner's policies.


https://www.architecturaldigest.com/story/three-multimillion-dollar-homes-on-a-cliff-appear-at-risk-of-falling-into-the-ocean

swashbucklinstache

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Re: America's coastal cities are a hidden time bomb
« Reply #490 on: October 09, 2024, 10:02:59 AM »
Keep in mind that property tax rates are also tied to the cost of housing.

A 1% rate on a $1.5M SF Bay Area shack is similar to a 3% rate on a $500k medium sized house in a lower COL area.

That’s why I think it always makes sense to look at it on a per-capita basis when talking about public policy implications.
I agree for public policy especially in the near term. However it's an important consideration of personal policy for some, akin to thoughts around LCOL expatFire (some people might not realize they have to leave Thailand if it grows to MCOL). Part of the fragility of coastal cities to think about is what happens if a climate disaster/market repricing turns that 1.5 million dollar home into a 500k home (or less, it's a shack!) and the 500k home into a million or 1.5 million dollar home. Many states have similar property tax setups to CA too, so rates are much higher, forever, the later you buy. Hopefully the Midwest states would accordingly drop the tax rate if values balloon but who knows. For people who are in their forever home just know what that entails in the long run as far as neighbors, services, etc. as an area transitions from HCOL to lower. Property tax is admittedly more of a sticker shock napkin math thing, a hook to get people to think about how sticker price isn't everything and it's possible you lose a million dollars in equity so think through that scenario at least once.

None of this matters for most individuals. For leanfire types with a low interest mortgage on a property with low relative structural value in a risky area, they'll need to be ready to be flexible especially if home equity is an important safety measure in their plans.

Housing is way more complicated than income but if anyone is thinking the status quo can never change, here is a chart I just googled for and didn't fact check.

chasesfish

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Re: America's coastal cities are a hidden time bomb
« Reply #491 on: October 09, 2024, 10:24:03 AM »
Indeed, the very basis for home insurance is that the land on which the house is standing will not disappear! Clearly this will have to be revisited in the future.
At some point the land might be depreciated even if it stays stable. What is a lot worth if regulations prevent the building of houses there? What's it worth if any house you build will be uninsurable? Would a $200k lot become a $100k lot if the insurance bill for a typical house there rose from $4k per year to $18k per year?

In economic terms it should depreciate. In cultural terms, our world produces a lot of YOLO people who are willing to work very long hours to have a house near the beach someday, so money keeps getting flung at these sandbar houses.

When we look back in time at how housing was affordably priced during the 1970s and 1980s, we realize it was high mortgage rates keeping prices down. Insurance costs might have a similar effect.

I'm not exactly on a sandbar as much as conquina reef rock plus sand.

The answer is all the new houses would look like they do in the keys.   Concrete pillars, drive under parking, engineered to withstand 150+mph winds and 15ft of storm surge that just passes underneath the house.    This is a problem that gets resolved by money.   Can everyone afford to live at the beach?  No.

spartana

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Re: America's coastal cities are a hidden time bomb
« Reply #492 on: October 09, 2024, 11:15:59 AM »
I would think higher taxes lose out. A houses costs what it costs to build. Anything beyond that and the value is the land, which you don't insure. That's why quarter acre empty lots in Boulder County are 400-500k.

It's quite the gamification for a FIREd person to think about the cost structures you end up weighing when considering where to live. Health insurance premiums, property taxes, home insurance, utilities, and electric make up the bulk of one's fixed costs. That's just the money side.

Not really true about it costs what it costs to build. https://todayshomeowner.com/home-finances/guides/cost-of-building-a-home-by-state/

Quote
The average cost of building a 2,100-square-foot home in the U.S. is $332,376, or $158 per square foot.

Building the same 2,100-square-foot home varies by more than $140,000 across states.

That's almost a 50% variance in cost to build!
It's based on local cost of labor and materials, yes. What I meant was all the value beyond what it costs to build a house is in the land. If it cost 500k to build the structure but demand in the area makes it a $1 million property, the other 500k value is in the land, and you'll see vacant lots selling for that much. It doesn't mean the structure is worth more than the cost to build because of demand.

This is most notable with oceanfront property. A $1.5 million house may cost 500k to build, meaning the lot is worth $1 million. If erosion on a barrier island eats enough of the lot that a house cannot be rebuilt, the owner is out $1 million. You cannot insure the value of the land and the insurance company will not pay you for that loss. This is an unfortunate situation playing out in WNC right now where riverfront homes had the earth eaten from under them. Those lots no longer exist. The government will not let those people rebuild. They'll get paid the value of their house as a total loss but that's just the structure. Whatever value was in the land just evaporated with no way to recover it.
This has been happening in coastal Calif at several places with the land slowly (over years) shifting and falling into the ocean and houses becoming uninhabitable. While many of these places are now multi-million dollar homes (now reduced to zero dollar homes and land) most of the people are elderly original owners who bought small houses in decades ago and don't have the finances to move. One area in SoCal called Portugese Bend had 200 or so small houses built there in the 1950s and owned by working class people are now being evacuated with no insurance to cover the costs since the houses have little value compared to the land - and now the land has zero value.

https://www.cnn.com/2024/09/09/us/rancho-palos-verdes-california-landslide/index.html

Also here in Calif land is at a premium and in many cases small older homes on 8,000 SF lots or less are bought for a million bucks by investors, completely torn down then rebuilt as mckansions that sell for $2.5 million or more. This happened to me. Sold my own original condition (but cute) 1950s 1000 SF house on an 8000 SF lot for a huge amount and UT was torn down and rebuilt into a giant 5000 SF 2 story house plus 1200 SF ADU.

MrGreen

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Re: America's coastal cities are a hidden time bomb
« Reply #493 on: October 09, 2024, 11:51:41 AM »
Indeed, the very basis for home insurance is that the land on which the house is standing will not disappear! Clearly this will have to be revisited in the future.
At some point the land might be depreciated even if it stays stable. What is a lot worth if regulations prevent the building of houses there? What's it worth if any house you build will be uninsurable? Would a $200k lot become a $100k lot if the insurance bill for a typical house there rose from $4k per year to $18k per year?

In economic terms it should depreciate. In cultural terms, our world produces a lot of YOLO people who are willing to work very long hours to have a house near the beach someday, so money keeps getting flung at these sandbar houses.

When we look back in time at how housing was affordably priced during the 1970s and 1980s, we realize it was high mortgage rates keeping prices down. Insurance costs might have a similar effect.
The land value is what changes the most, up or down. That same 500k structure on a mainland lot might only be 750k total for the property rather than 1.5 million. It will almost always be the land value changing based on the demand because it costs what it costs to build a house (per location). It's possible that demand could be so poor that a property won't even sell for the cost of building a house. That's the equivalent of breaking the buck in a mutual fund and all home building will stop.

Another example of this is what has taken place in Wilmington over the last 5 years. It used to be a small market. No national builders built here. So the value of land was lower and small builders built a fairly decent product, even for builder grade stuff. Now that Southeast NC is the new Florida, all the national builders are pouring in. Small builders can't compete with their supply chain logistics which means they can't build a structure as inexpensively as the big builders. So the big builders are able to offer more money for the lots and build a house for the same price. The big downside is they build shittier homes. So all the locals here lose out because the quality of home at X price point has gone down while the cost of land has gone up.

scantee

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Re: America's coastal cities are a hidden time bomb
« Reply #494 on: October 09, 2024, 01:08:44 PM »
Indeed, the very basis for home insurance is that the land on which the house is standing will not disappear! Clearly this will have to be revisited in the future.
At some point the land might be depreciated even if it stays stable. What is a lot worth if regulations prevent the building of houses there? What's it worth if any house you build will be uninsurable? Would a $200k lot become a $100k lot if the insurance bill for a typical house there rose from $4k per year to $18k per year?

In economic terms it should depreciate. In cultural terms, our world produces a lot of YOLO people who are willing to work very long hours to have a house near the beach someday, so money keeps getting flung at these sandbar houses.

When we look back in time at how housing was affordably priced during the 1970s and 1980s, we realize it was high mortgage rates keeping prices down. Insurance costs might have a similar effect.

I'm not exactly on a sandbar as much as conquina reef rock plus sand.

The answer is all the new houses would look like they do in the keys.   Concrete pillars, drive under parking, engineered to withstand 150+mph winds and 15ft of storm surge that just passes underneath the house.    This is a problem that gets resolved by money.   Can everyone afford to live at the beach?  No.

The part that is hard to assess now is how desirable these places remain with more frequent storms. For a long time a lot of Florida residents felt the risk was worth it to endure bad storms every few years and could-lose-your-house storm once a lifetime. Will the calculus be the same if the once in a lifetime storms are now every few years?

I have family with a second home on Sanibel. They didn’t have any major damage to their home from Ian, but it was still a huge amount of work to get their property cleaned up. If they are hit hard again I can imagine them deciding it’s just not worth it, even if the house itself is fine.

In the end, I think that’s probably the best possible scenario: people willingly choosing to leave because of a sense that more frequent storms causes overall quality of life to go down.

tooqk4u22

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Re: America's coastal cities are a hidden time bomb
« Reply #495 on: October 09, 2024, 01:25:21 PM »
It's based on local cost of labor and materials, yes. What I meant was all the value beyond what it costs to build a house is in the land. If it cost 500k to build the structure but demand in the area makes it a $1 million property, the other 500k value is in the land, and you'll see vacant lots selling for that much. It doesn't mean the structure is worth more than the cost to build because of demand.

This is most notable with oceanfront property. A $1.5 million house may cost 500k to build, meaning the lot is worth $1 million. If erosion on a barrier island eats enough of the lot that a house cannot be rebuilt, the owner is out $1 million. You cannot insure the value of the land and the insurance company will not pay you for that loss. This is an unfortunate situation playing out in WNC right now where riverfront homes had the earth eaten from under them. Those lots no longer exist. The government will not let those people rebuild. They'll get paid the value of their house as a total loss but that's just the structure. Whatever value was in the land just evaporated with no way to recover it.

Indeed, the very basis for home insurance is that the land on which the house is standing will not disappear! Clearly this will have to be revisited in the future.

Its not just Florida - 12 years after Sandy hit us in NJ, there are still people building houses on delicate barrier islands on the Atlantic coast.

This article is from 9 years ago

Quote
Along the New Jersey and New York coasts after Hurricane Sandy, down the shores of Virginia and North Carolina following major storms, and across the Gulf of Mexico coast in the wake of recent hurricanes, rebuilding has taken place on dozens of vulnerable barrier islands. Not only does this recurring reconstruction place billions of dollars of property at risk, but it often means the construction of hugely expensive flood protection and storm-control projects that can harm coastal ecosystems.

Setting aside climate change....this is the fundamental problem.  If people continue to want homes in high risk areas......and insurance companies underprice risk or unfairly spread it over a broader base that is outside of the high risk area......and mortgage companies don't require substantial insurance coverage and continue providing mortgages in these areas.......and it is all backstopped by the federal government.   Especially coastal barrier islands....."BARRIER ISLANDS".   

Although in NJ since Sandy it has become common for older homes to get raised, as in elevated above the flood level, because of the cost of insurance and while expensive it is usually recouped in 2-3 years afterward as a result of the insurance differential.

And said houses in these high risk areas, not just Florida, have exploded in size and cost.....anything newer is not a 900 sf bungalow. 

And I get the desire to live in these high risk areas, they tend to be beautiful and full of nature/outdoor awesomeness but it shouldn't be subsidized by the government or insured people in lower risk areas, but there really is no other way.


Indeed, the very basis for home insurance is that the land on which the house is standing will not disappear! Clearly this will have to be revisited in the future.
At some point the land might be depreciated even if it stays stable. What is a lot worth if regulations prevent the building of houses there? What's it worth if any house you build will be uninsurable? Would a $200k lot become a $100k lot if the insurance bill for a typical house there rose from $4k per year to $18k per year?

In economic terms it should depreciate. In cultural terms, our world produces a lot of YOLO people who are willing to work very long hours to have a house near the beach someday, so money keeps getting flung at these sandbar houses.

When we look back in time at how housing was affordably priced during the 1970s and 1980s, we realize it was high mortgage rates keeping prices down. Insurance costs might have a similar effect.

I'm not exactly on a sandbar as much as conquina reef rock plus sand.

The answer is all the new houses would look like they do in the keys.   Concrete pillars, drive under parking, engineered to withstand 150+mph winds and 15ft of storm surge that just passes underneath the house.    This is a problem that gets resolved by money.   Can everyone afford to live at the beach?  No.

I do wonder if this is failing of local regulations at least for new builds..
« Last Edit: October 09, 2024, 01:39:25 PM by tooqk4u22 »

ChpBstrd

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Re: America's coastal cities are a hidden time bomb
« Reply #496 on: October 09, 2024, 03:59:55 PM »
Relevant, though anecdotal, blog post:

https://wolfstreet.com/2024/10/08/florida-housing-market-buckles-listing-prices-sag-to-30-month-low-but-are-still-way-too-high-inventory-piles-up-institutional-investors-turn-into-net-sellers/

The answer is all the new houses would look like they do in the keys.   Concrete pillars, drive under parking, engineered to withstand 150+mph winds and 15ft of storm surge that just passes underneath the house.    This is a problem that gets resolved by money.   Can everyone afford to live at the beach?  No.
Can't argue with that! I've been advocating more concrete-centric and elevated construction in storm-prone areas near sea level for a while. But, yes, this costs more, and not everyone can afford to live in the sort of house this climate calls for.

Something about our cultural values drives us to buy the 3,000sf box made of OSB sitting on sand instead of building more durably - like a 1,500sf box made of double-walled concrete. It's the same instinct that leads us to roof our homes with 25-year asphalt shingles that will require replacement after a good hailstorm instead of paying maybe 50-75% more to install a roof that can last 100 years, like copper, slate, concrete, or tile. It's also why many of the least reliable cars (looking at you, Jeep) are bestsellers. It's why WalMart ran the old department stores out of business, and it's why we off-shored manufacturing to China.

Quality, durability, and even safety mean less to us than cheapness, scale, and superficial conspicuous consumption. How else can we explain the McMansion with its styrofoam walls, built to have multiple unoccupied bedrooms, at a cost that could have created something beautiful that would have been a better fit for the family buying it. A McMansion on the beach is what everyone appears to want right now, and being able to qualify for a loan is as much a matter of luck as the house lasting 30 years. It's a combo of natural and financial precarity we seem to strive for.

In terms of demographics, the residents of Florida cannot shift toward elevated homes because they cannot climb stairs. But this only reinforces the craziness of living in a way where one must evacuate often or else risk death in houses that cannot withstand the storms. Imagine the luxury of being stuck in traffic while trying to escape from Milton in one's mid-70s or 80s and then the car runs out of gas. It's a recipe for mass casualties.

NorCal

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Re: America's coastal cities are a hidden time bomb
« Reply #497 on: October 09, 2024, 04:30:43 PM »
I’ve always thought states should set their building codes based on a lowest TCOE basis.

Measure the cost of improved survivability amortized over a 30 year mortgage versus the change in home insurance pricing. If the increased durability results in a lower TCOE when factoring in insurance, make that part of code.

The same could be done for energy efficiency requirements. Measure the change in monthly mortgage payments versus the expected impact to energy bills.

Telecaster

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Re: America's coastal cities are a hidden time bomb
« Reply #498 on: October 09, 2024, 09:36:06 PM »
@NorCal  Yes, that would be the common sense way to approach it.  Very small increases in initial costs can lead to substantial decreases in maintenance and operation costs that easily pay for themselves in short period of time, like five or ten years.   After that it is money in the bank.  Most houses last for many decades so the savings are enormous.   The problem is the building industry hates it, so the codes don't follow.   Most homeowners aren't making buying decisions on energy efficiency or 10 year maintenance costs.  They want an affordable house in a good neighborhood with curb appeal.   

AnotherEngineer

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Re: America's coastal cities are a hidden time bomb
« Reply #499 on: October 10, 2024, 05:52:50 AM »
Indeed, the very basis for home insurance is that the land on which the house is standing will not disappear! Clearly this will have to be revisited in the future.


Property insurance protects the building and doesn't care what happens to the land.  If the land is affected by flooding, that is too bad.  If the flooding affects the house, it will be covered if flood insurance was in place.  If the land slumps away, the house will probably not be covered as this coverage is not readily available and is typically specifically excluded on homeowner's policies.


https://www.architecturaldigest.com/story/three-multimillion-dollar-homes-on-a-cliff-appear-at-risk-of-falling-into-the-ocean

Another angle I've been thinking about is that only some portion of homes in the NC mountains were actually damaged and a smaller number had their whole homesite washed away. However, undamaged homes may not have power for weeks and water or a road to access them for months. And earlier post mentioned hike-in houses. Helene exposed that some parcels may have to deal with these impacts on an increased frequency.