How Sea Level Rise Impacts the Economy: A Study on Elevation’s Impact on Property Value Growth in Pinellas County, FL, USA

Abstract

In the context of accelerating Sea Level Rise (SLR) globally, elevations of coastal properties are becoming a more important factor for homebuyers given their relationship to current and future. This study investigates the impact of elevation on the residential property market of Pinellas County, FL, USA. Single-family properties no higher than an elevation of 4 m are selected as the sample. The research focuses on two aspects of elevation’s impact: elevation's impact on long-term appreciation and the “price” of this characteristic in property transactions. The first hypothesis tested is that the properties at lower elevation have a slower appreciation rate over time. This hypothesis is tested by constructing price indices at different elevations from 1972 to 2019. The result suggests that the hypothesis applies to the properties no higher than 1 m, and, further, properties at 1 m have the fastest appreciation rate. The second hypothesis tested is that properties at higher elevations can be sold at higher prices over comparable properties. This hypothesis is tested by conducting hedonic regressions on property transactions at different elevations from 1995 to 2019. The results suggest that the hypothesis applies to around a quarter of the areas investigated. All the findings generally indicate that, while homeowners are paying some increasing attention to the elevation of properties in home purchasing, it has not been a significant factor so far in Pinellas County, FL, USA.