The Business Case for Miami Beach’s Resiliency Efforts

Resiliency

Susan Askew
Susan Askew

The Business Case for Miami Beach’s Resiliency Efforts:

Initial results indicate increased property values tied to stormwater program

The business case analysis of Miami Beach’s resiliency efforts is at the halfway mark and the initial results show an increase in values for properties at higher elevations and those located near raised roadways. In the Sunset Harbour neighborhood, the lowest-lying area of the City where streets were raised, condo units increased approximately $41 million in total value or 12% from the time period before the stormwater resilience project began to after its completion “specifically due to the road raising project,” according to a letter to Commissioners from City Manager Jimmy Morales. Among the next steps is to complete a case study of the South of Fifth neighborhood. 
 
The study is being conducted by climate adaptation planning consultant ICF which was asked to combine risk, drainage, and economic modeling to assess the costs and benefits of the City’s investments in its stormwater program. Morales calls it a “first of its kind study” because of its integration of the three models that traditionally have been used in industry silos “to understand the relationships among the models, the stormwater program, and the effect on property values and insurance.” Miami Beach is committing hundreds of millions of dollars toward the stormwater program which has been paused for more than a year while the City evaluates the results, methods, and geographic priorities of its plan.

Overall, the economic model indicates that home prices increased from 8.6% to 11.5% for each one-foot increase in average parcel elevation, Morales wrote. “Home prices are also higher for parcels with more elevated surrounding roads. In the model, home prices increased by 4.9% to 14.1% for each one-foot increase in nearby road elevation.”
 
The economic model which uses actual home sales data over a 15-year period was created specifically for Miami Beach. The peer-reviewed tool evaluated “the potential benefits of increasing road elevations and improving drainage infrastructure for Miami Beach homeowners and the property tax base,” according to Morales.
 
Perhaps unsurprisingly, the risk model indicates that “Without investments, storm surge losses increase with the addition of one foot of sea level rise” causing deeper floods with a larger geographic footprint affecting more structures and a larger number of events that will impact Miami Beach. The City’s program currently accounts for one foot of sea level rise.
 
The drainage model shows that “Public infrastructure investments reduce flooding levels,” Morales said. “This means that individual homeowners will require less investments to protect their homes.”
 
In the first of two neighborhood case studies, the increased property values in the Sunset Harbour neighborhood attributed to the road raising project "when holding all other variables constant" were accompanied by a reduced flood risk, according to the models. “The neighborhood has also avoided potential damage from tidal flooding due to road elevation. Since 2017, the tide levels would have resulted in flooding 44 times, when comparing the lowest elevation prior to construction with the minimum road elevation after construction,” Morales wrote. The City does not claim the program prevents all flooding, but it says the results show the area is avoiding flooding due to the program.
 
Deputy Resilience Officer Amy Knowles who is managing the project for the City said the approach to the study is “pushing the market” and the field of consultancy. “It definitely feels like we’re doing groundbreaking work here,” she said, calling it “really important for decision-making going forward.” The results can serve as a model for other cities though the data and formula are specific to Miami Beach.
 
Assistant City Manager and Chief Resilience Officer Susy Torriente said the contract to conduct the study is “probably the most complex contract that I’ve seen in my career.” The effort started when Commissioner Ricky Arriola, a businessman, asked questions about the program “from a business perspective,” Torriente said. “Nobody could simply answer the questions because of the complexities of all of the different disciplines involved. These are generally studies that are done in silos but when you really start to share the information from one discipline to another it starts to answer these really complex questions that our residents and commissioners have.”
 
The analysis is “heavy data driven versus sometimes we have these conversations and they’re more emotion and speculation,” Torriente said. “I think at the end of this process we will be able to have data and confidence in the program.”
 
She hopes the early results will “encourage others to start their adaptation sooner than later. Other cities need to start.”
 
During the second half of the analysis, a case study will be conducted in the South of Fifth neighborhood which Knowles said already has some stormwater adaptation designs in place. While Sunset Harbour is more commercial than residential, the South of Fifth area is more residential with some commercial uses. 
 
In addition to the South of Fifth case study, there will be a report that identifies specific actions homeowners can take to protect their properties and the benefit of those adaptation strategies along with an overview of the citywide costs and benefits of stormwater investments. 
 
The $385,000 economic impact study kicked off at the beginning of the year and is expected to completed in early 2020.
 
Following an evaluation by a team of experts from the Urban Land Institute last year, the City hired Jacobs Engineering to create a plan for the stormwater program incorporating the ULI recommendations and recommending priorities for the order in which neighborhoods should be addressed. That report is expected later this year.

Morales full Letter to Commission on the midway point of the economic analysis can be found here.

 
 

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