Paul and Sandra McCrossan live so high in Toronto that their property is a popular resting place for migratory birds. But the acidic soil took its toll when the city received its heaviest rainfall in recorded history in August.
For the first time, their basement showed traces of moisture. And for Paul McCrossan, the unusually heavy rain due to climate change was a threat to his home that he was not willing to tolerate. The couple spent $10,000 covering the exterior walls of their basement to protect it from water and make sure the drains from the widows’ wells are clear.
“These were unexpected costs but they were not uncontrollable costs,” said McCrossan, a longtime insurer as a risk manager, in a telephone interview. “However, with climate change and increased rainfall and wind, I expect that many wealthy and asset poor retirees will be hit.”
Hanna Grichanik, a financial advisor at Northwestern Mutual, said she regularly talks with clients about planning for the cost of maintaining their homes in retirement. That means routine maintenance but could also include updates to deal with more wildfires in California, floods and hurricanes in Florida, or blackouts in Texas when a Blue Norther sweeps the country and shuts down the grid.
He said property insurance premiums are skyrocketing in some areas, and he knows Texans are buying $20,000 generators to be ready for the next snow or high winds from the next Hurricane Beryl.
“In retirement planning, I always tell people that you own your home, and they don’t just stop needing repairs,” Grichanik said. “You have to budget for that.”
The McCrossans faced a unique climate problem at their beachfront property in New Smyrna, Florida, north of Cape Canaveral. Hurricanes that hit Miami often jump over the Carolinas. But strong winds and rains are affecting homes on Florida’s east coast.
Their property sustained only minor wind damage but others nearby sustained more. The state also passed costly new regulations after the Surfside condominium collapse three years ago due to salt water intrusion killed 98 residents. Complying with the new regulations results in inspections for some condo owners to make overdue repairs or fill deposits in case repairs are needed. McCrossan said his additional inspections cover the cost of testing to ensure the building is sound.
Property values can also drop when a hurricane or flood hits neighborhoods on or near water, affecting retirees’ finances or destroying the home they intended to leave to their children. As the weather heats up, more and more areas and retirees will be affected, experts say.
Property values, particularly on the East Coast, do not fully reflect the potential for negative impacts from storm damage and flooding, according to the journal’s study. The environmentwhich estimates that flood-prone residential areas across the country are overpriced by, at least, $121 billion.
“The increased burden of flooding under climate change has led to growing concern that housing markets are immune to these risks,” the authors conclude, potentially “resulting in a housing bubble.”
Climate change is here. The results are beginning to be understood now.
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