Measuring the Impact of Sea‐Level Rise on Coastal Real Estate: A Hedonic Property Model Approach

Abstract

This study estimates the impact of sea‐level rise on coastal real estate in North Carolina using a unique integration of geospatial and hedonic property data. With rates of sea‐level rise approximately double the global average, North Carolina has one of the most vulnerable coastlines in the United States. A range of modest sea‐level rise scenarios based on the IPCC Fourth Assessment Report projections (2007) are considered for four counties of North Carolina - New Hanover, Dare, Carteret, and Bertie - which represent a cross‐section of the state's coastline in geographical distribution and economic development. High‐resolution topographic LIDAR (light detection and ranging) data are used to provide accurate inundation maps for the properties that will be at risk under six different sea‐level rise scenarios. A simulation approach based on spatial hedonic models is used to provide consistent estimates of the property value losses. Considering just four coastal counties in North Carolina, the value of residential property loss without discounting in 2030 (2080) is estimated to be about $179 ($526) million for the mid‐range sea‐level rise scenarios. Low‐lying and heavily developed areas in the northern coastline are comparatively more vulnerable to the effect of sea‐level rise than the other areas.