In spite of the rising sea level along the coasts, people are moving there in droves. You might wonder why they are doing so, since the risks of damage from high tides and storms now is creeping up even faster than the ocean is. This article from Yale Climate Connections discusses why coastal development is increasing in spite of future risks and relates it to local governments’ desires for tax income, insurance rates that are too low to reflect the real likelihood of damage, and the federal government’s requirement (until recently) of having to rebuild homes in damaged areas no matter how likely they were to be damaged again. And this is not just true of coastal areas but also for many inland areas that are affected by flooding or drought conditions which could affect future water supplies. As a result, many properties are overvalued and so an enormous bubble in housing prices has grown. When it pops, the impacts on the housing market could be severe.
