
Seaside homes face increasing risks from storm surges and sea level rise as climate change continues.
New research suggests New Hampshire homes face substantially higher costs from flooding over the next 30 years as climate change worsens the risk of strong storms.
The nonprofit First Street Foundation says that nearly 10,000 homes outside of federally defined flood-prone zones statewide would have to pay an average of $3,279 per year in federal flood insurance premiums if those premiums reflected actual risk. First Street estimates those properties would only pay an average of $485 per year under the National Flood Insurance Program’s current structure.
Homeowners across the country face two challenges over the next 30 years, said Matthew Eby, First Street’s executive director.
First, the National Flood Insurance Program (NFIP), administered by the Federal Emergency Management Agency (FEMA), is expected to shift to a new rate structure this fall that reflects actual risk for properties in current flood zones. These properties are required by law to buy flood insurance intended to cover repair costs, and FEMA has embarked on a process called “Risk Rating 2.0” that will likely increase many homeowners’ premiums substantially.
“What does that do to home values? Adding cost of ownership, carrying costs, it’s going to bring the cost of a home down if you have a $600,000 home and you’re being told you have to start paying $5,200 a year,” Eby said.
First Street estimates the average NFIP premium for a one- to four-family home inside New Hampshire’s designated flood zones is $1,310. If current, known risks were included, the foundation estimates that figure should be $3,698, based on factors like the expected height of floodwaters under different scenarios and property characteristics like the height of a home’s first finished floor.
“There are people whose prices should go down and there’s prices that should go really high up. That’s where our model comes in,” Eby said. “It’s indicative of the changes you’re going to see.”
Flooding Could Get Worse
But the FEMA flood zones currently do not take changes likely to be cause by climate change over the next 30 years, like sea level rise or more frequent severe storms, into account. This, Eby said, masks the full extent of risk to homebuyers.
The state has 9,440 one- to four-family homes outside FEMA flood zones at risk of flood damage, compared to only 2,987 within the flood zones. Those properties face possible flood damages over the next 30 years totaling $1.35 billion, First Street says, with much of the potential increase in damage concentrated in Rockingham County.
Portsmouth, where officials approved a $3 million plan last month to protect the popular waterfront Prescott Park from sea level rise, faces the biggest increase in potential losses, First Street estimates: 45.3 percent, to $4.22 million. Hampton and Dover also face over 30 percent increases in the potential cost of flood damage.
The average homebuyer does not appear to be taking climate risks into account as they shop for houses and decide how much a home is worth, said Roger Stephenson, the northeast regional advocacy director for the Union of Concerned Scientists. However, some of that is due to how long someone is likely to spend in a home.
“Have the climate signals reached the local markets? You can see institutional investors and the mortgage banking industry, investors in real estate investment trusts, they’re looking at that,” Stephenson said. “But people aren’t living in their houses for 30 years. They’re living in their houses for an average of nine years.”
In the last six months, both Realtor.com and Redfin have inked deals with First Street to add its flood risk calculations to property listings.
“What we’re doing is trying to democratize this type of information, so that anyone who’s a homeowner should take action to mitigate against that,” First Street’s Eby said. “Homebuyers should understand the risk.”
Local communities are hardly standing still in the face of this risk, Stephenson said, conscious that their property tax revenues could be hurt by increased flooding. Over the last 10 years, many Seacoast towns and cities have worked together and individually, leveraging federal dollars, to map their vulnerabilities and begin addressing them with infrastructure projects. Some, like Rye, are even requiring new buildings to be built higher, out of reach of flood waters.
Ultimately, he said, coastal flooding along the Seacoast hurts the entire state.
“Why would you care about what happens in Hampton? Hampton throws off millions of dollars of room and meals taxes annually,” he said.