The Smart Money: Sea level rise and the economy

Posted Tuesday, November 12, 2013 in Analysis

The Smart Money: Sea level rise and the economy

Part of the town of Harpswell, including parts of Bailey and Orr's Islands

by Gina Hamilton

Harpswell just got the bad news about some of its villages, and their propensity to be innundated by flood water, especially during a storm surge.  Other towns are looking at how sea level rise will affect their own towns, buildings, natural environment, and industries.

Towns along the Kennebec, including Bath, may see waters rise up to six feet within the next hundred years or so.

Those who can afford to do what they have to do to protect their properties and businesses will fare better than those who can’t, or those who take their livings directly from the water.

One potential buyer in Harpswell reportedly heard that flood insurance for the property he wanted to buy would cost him $38,000 per year.

That’s not a misprint.  $38,000 per year.  For one little house in Harpswell.

If you can’t afford that kind of price tag, well, you just can’t live there.

Coastal property is already much more expensive than its inland counterpart.  Part of that is simple supply and demand.  More people want to live on the coast than want to live in inland communities.  Fair enough.  

But a large percentage of the property that is being purchased is being bought by out of state people for summer homes, at wildly inflated prices.  Property taxes rise, and people who have lived on Popham Beach or Small Point or Five Islands or Bailey Island for generations suddenly get massive tax burdens they cannot afford and are forced to sell their property, often to out of staters who can spend the largest amount of money.  And the cycle continues.

Working waterfront, too, is being priced out of the market.  Towns are making an active choice to try to keep working waterfront property tax levels lower to keep fishermen able to continue working, but no one has taken into account the effect that flood insurance rates will have on these essential industries in Maine.

And while the wealthiest may be able to afford $38,000 flood insurance price tags, most of us can’t.  Certainly those who dig clams or fish lobster or haibut don’t have that kind of cash in hand.

We may someday ... soon ... be faced with a waterfront that bears no resemblance to the quaint fishing villages that drew people here from Connecticut or New York or Philadelphia in the first place.  The piers may still be there, but the lobster boats and shrimping boats won’t be.

What are the options? Harpswell can’t opt out of the National Flood Insurance Program; it would never again be able to sell a property with a mortgage.

Nor should taxpayers be forced to pick up the whole tab for people who know their communities are flood prone and choose not to insure themselves.

However, like the working waterfront tax breaks, there should be able to be a middle ground.

There is a difference between a six-bedroom house on Bailey Island with a private beach and a two-bedroom house off Harpswell Center with a pier and a fishing boat out in front.  At least there should be.

No one but the owner of the home with the private beach benefits from that oceanfront property (and some new residents are working extra hard to make sure that continues to be the status quo!) but everyone benefits by a fisherman bringing his fresh catch to the pier on a daily basis. 

The local packers, the local drivers who bring the catch to the stores, the local stores who sell it, the local restaurants who buy it and cook it and sell it to locals and visitors alike all benefit from the fisherman being able to live near the shore.

Even taxpayers in Boston, in New York, in Philadelphia, buy fish from the Gulf of Maine.  There is a benefit to working waterfront that extends beyond the community in which the waterfront is located.

That should be recognized by those who establish flood maps.  Yes, it might cost us something as a society to rebuild the little two-bedroom house off Harpswell Center. Yes, we might have to do it once every ten years or 20 years.  But there is a qualitative difference between doing that, so that Fisherman Mike can get out and bring home fresh fish every day, and rebuilding the six-bedroom place on Bailey Island with the private beach so Mr. and Mrs. Connecticut can come up to relax for a month every August.

It’s time to treat working waterfront and moderate housing differently from the way other coastal housing is treated, both in local tax rolls, and in FEMA flood maps.

The purpose of the property should be considered as well as its statistical likelihood that it will be subject to a storm in any given year.  And an effort should be made to keep flood insurance affordable for moderate income people and the working waterfront, even if that means that the wealthiest summer residents may have to pay a little bit more.

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