Estimating the impacts of climate change risk perception on local housing market: A case study in Miami-Dade, Florida

Abstract

Coastal amenities, services, and ecosystems attract people to live in coastal areas. However, coastal residents face exacerbated natural hazard risks due to recent climate change dynamics. Concerns about future climate change could disrupt residential property valuations in coastal communities, leading to relocations from high-risk coastal areas to inland locations. Such dynamics can cause climate gentrification in higher-elevation regions, displacing vulnerable communities. Despite these risks, many coastal residents are reluctant to leave the coast. The main goal of this study is to examine climate change's effect on the residential market in Miami-Dade County, one of the most vulnerable urban areas to climate change. This study offers insights into the impact of climate change by examining both proximity to the coastline as a factor influencing residential preferences and elevation as a proxy for risk perception. Additionally, this research explores changes over 41 years through parcel-level analysis, providing a unique perspective on long-term trends and micro-geographic details in property evaluations. A hedonic pricing approach is applied to the residential property market using sales data spanning over four decades. Findings suggest that the preference for higher-elevation properties has turned positive since the late 1990s and generally increased, but the preference for areas closer to the coast still exists, despite growing risks.