NYS Property Tax Revenue at Risk due to Chronic Flooding from Sea Level Rise

Main Findings

Assuming static population, building stock, property value, tax rates in the future:

• 26 to 38 communities in New York State will have homes that experience chronic inundation (i.e., flooded 26 times per year or every other week on average) due to sea level rise in 2060.
• Among these communities, the average percent of the municipal property tax revenue that is at risk due to chronic inundation is 1.17% to 2.07% depending on sea level rise scenario in 2060.
• The community with the greatest property tax revenue at risk due to chronic inundation in 2060 is Stony Point, NY. With 25.2% to 25.4% of total property tax revenue under depending on the sea level scenario.
• 33 to 55 communities in New York State will have homes that experience chronic inundation due to sea level rise in 2100.
• Among these communities, the average percent of the municipal property tax revenue that is at risk due to chronic inundation is 1.32% to 5.14% depending on sea level rise scenario in 2100.
• Stony Point, NY is the community with the greatest property tax revenue at risk in 2100 under a low sea level rise scenario (25.35% of total property tax revenue).
• Long Beach, NY is the community with the greatest property tax revenue at risk in 2100 under a high sea level rise scenario (92.02% of total property tax revenue).
• Under most sea level rise scenarios and time horizons, most New York State communities have <5% of their property tax revenue at risk of chronic inundation. (Stony Point, NY is a notable exception).
• This result changes under high sea level rise scenarios by the end of the century (2100), with 7 communities in New York State with >10% of their property tax revenue at risk due to chronic inundation.

Importance of These Findings

These results suggest that if voluntary buyouts (i.e., property acquisitions) were offered to homes that will experience chronic flooding due to sea level rise, municipal property tax revenue will remain largely intact. The loss of municipal property tax revenue has the opportunity to be offset (partially or completely) by avoided costs associated with infrastructure delivery, emergency services, etc.

Goals of This Analysis

There is anecdotal information that municipalities (i.e., villages, towns, cities) are opposed to participating in voluntary buyouts (i.e., property acquisition) as a flood mitigation approach because of the perceived loss of property tax revenue that would occur. It is unclear to what extent the property tax revenue of municipalities in New York state is at risk to flooding. This analysis attempts to answer: If coastal municipalities in New York state were to offer voluntary buyouts to the properties most at-risk to chronic inundation, how would the municipal tax revenue be impacted?

The Data

Data for this analysis are from the Union of Concerned Scientist’s (UCS) Underwater: Rising Seas, Chronic Floods, and the Implications for US Coastal Real Estate. Data can be downloaded here. Full details and methodology are described in the Technical Backgrounder. In short, UCS combined data on chronic inundation (defined below) from Dahl et al. 2017 and Spranger-Seigfried et al. 2017 with real estate data from the Zillow Transaction and Assessment Database (ZTRAX). The data were prepared for the entire coastal United States, but only New York state was considered in this analysis. Communities are defined by US Census Bureau county subdivisions. In NY these correspond to towns and incoporated places (cities).

Defining Chronic Inundation

Chronic inundation is defined as an area that floods at least 26 times per year (i.e., every other week on average).

Sea Level Rise Scenarios Considered

The data prepared by UCS use three sea level rise (SLR) scenarios from the 2014 National Climate Assessment (Parris et al. 2012).

• Low: 1.6 feet (0.5 m) above 1992 levels by 2100. This scenario is a proxy for conditions under the Paris Climate Agreement.
• Intermediate: 4.0 feet (1.2 m) above 1992 levels by 2100
• High: 6.6 feet (2.0 m) above 1992 levels by 2100. This scenario includes rapid ice sheet loss.

Caveats & Limitations

• The data provided by UCS assume static population, building stock, property value, tax rates, etc. in the future. This is certainly not true and will likely lead to an underestimation of risk as most recent trends have shown an increase in development in the floodplain. This might be the most consequential simplification of these data and analysis.

• The data provided by UCS only consider coastal flooding due to sea level rise. Other types of flooding (e.g., riverine, increased precipitation, groundwater, storm surge, etc.) are not included.

• The data provided by UCS do not consider localized coastal defenses such as seawalls or levees. Therefore, flood risk may be overestimated for areas where localized coastal defenses have been or will be pursued.

• This analysis examines the property tax revenue generated by properties that are at risk of chronic inundation to understand the impacts of voluntary buyouts of those properties on the municipal budget. This analysis represents a “worst case scenario” where properties are acquired and the homeowners do not relocate within the community. It is possible to mitigate the loss of municipal tax revenue caused by voluntary buyouts by providing desirable and safe relocation opportunities within the community.

• Due to inconsistencies, data for Kingston, Newburgh, Poughkeepsie, and Rye were removed from the analysis. For these communities, differences between the town and the city could not be parsed in the dataset.

• The five boroughs of New York City (Bronx, Brooklyn, Manhattan, Staten Island, Queens) are reported individually here with property tax revenue reported at the borough-level. In reality, all five boroughs share a common municipal budget.

Results: 2060 Low Sea Level Rise

The following plot shows the percentage of a municipality’s total property tax revenue that is at risk due to chronic inundation in 2060 under a low sea level rise scenario. The values above the bars indicate the number of homes at risk in each municipality.

In this scenario, a total of 26 communities in NYS have properties at risk of chronic inundation.

Among these communities, the average percentage of municipal property tax revenue that is at risk of chronic inundation is 1.17.

In this scenario, all but one NYS municipality have <5% of their property tax revenue at risk of chronic inundation.

The municipalities with the largest portion of property tax revenue at risk of chronic inundation in 2060 under a low SLR scenario is:

Results: 2060 High Sea Level Rise

The following plot shows the percentage of a municipality’s total property tax revenue that is at risk due to chronic inundation in 2060 under a high sea level rise scenario. The values above the bars indicate the number of homes at risk in each municipality.

In this scenario, a total of 38 communities in NYS have properties at risk of chronic inundation.

Among these communities, the average percentage of municipal property tax revenue that is at risk of chronic inundation is 2.07.

In this scenario, most NYS municipalities have <5% of their property tax revenue at risk of chronic inundation.

The municipalities with the largest portion of property tax revenue at risk of chronic inundation in 2060 under a high SLR scenario is:

Results: 2100 Low Sea Level Rise

The following plots show the percentage of a municipality’s total property tax revenue that is at risk due to chronic inundation in 2100 under a low sea level rise scenario. The values above the bars indicate the number of homes at risk in each municipality.

In this scenario, a total of 33 communities in NYS have properties at risk of chronic inundation.

Among these communities, the average percentage of municipal property tax revenue that is at risk of chronic inundation is 1.32.

In this scenario, all but one NYS municipality have <5% of their property tax revenue at risk of chronic inundation.

The municipalities with the largest portion of property tax revenue at risk of chronic inundation in 2100 under a low SLR scenario is:

Results: 2100 High Sea Level Rise

The following plots show the percentage of a municipality’s total property tax revenue that is at risk due to chronic inundation in 2100 under a high sea level rise scenario. The values above the bars indicate the number of homes at risk in each municipality.

In this scenario, a total of 55 communities in NYS have properties at risk of chronic inundation.

Among these communities, the average percentage of municipal property tax revenue that is at risk of chronic inundation is 5.14.

In this scenario, most NYS municipalities have <5% of their property tax revenue at risk of chronic inundation.

The municipalities with the largest portion of property tax revenue at risk of chronic inundation in 2100 under a high SLR scenario is:

Sensitivity to SLR Scenario and Time Horizon

Some municipalities are fairly static across SLR scenarios and time horizons:

Other municipalities, such as Poospatuck, NY, are consistent through time but results depend on the SLR scenario used:

Others are much more sensitive, and show an increase in property tax revenue at risk as time progresses and with increasing SLR scenarios:

In many cases there is a steep increase in property tax revenue at risk to chronic flooding after 2060. The shape of this curve resembles the trajectory of different SLR scenarios.

Future Directions

This analysis capitalized on the availability of the dataset prepared by The Union of Concerned Scientists, which is limited to chronic flooding in coastal communities due to sea level rise. A priority next step for informing The Nature Conservancy’s New York State Climate Adaptation strategy would be to conduct a similar analysis for inland communities that are prone to riverine flooding. Data on municipial property taxes in communities throughout New York State are available in the NYS Tax Parcel Centroid Points dataset. Data on assessed property value could be combined with municipality-specific tax rates to determine property tax revenue generated by each property. A measure of flood vulnerability for inland communities would need to be developed that is comparable to the definition of chronic flooding (26 times per year) that was used in this analysis.

What Do Other Studies Tell Us?

There is not a significant amount of information in the peer-reviewed or grey literature on the tax impacts of property acquisition. A literature review found five studies that report on some aspect of this topic.

Those studies are:

• Freudenberg R, E Calvin, L Tolkoff, D Brawley. 2016. Buy-In for Buyouts: The Case for Managed Retreat from Flood Zones. Lincoln Institute of Land Policy, Cambridge, MA.
• Lowrie K, D Kutner. 2016. Mystic Island Voluntary Buyout Health Impact Assessment. Assessing Health Outcomes of Post-Sandy Decision-Making. Rutgers University.
• Salvesen D, TK BenDor, C Kamrath, B Ganer. 2018. Are Floodplain Buyouts a Smart Investment for Local Governments. Final Report for the UNC Policy Collaboratory.
• Schiff R, S Bighinatti, E Fitzgerald, N Wahlund, D Carlton, A Church, J Louisos, B Cote. 2015. Evaluating the Costs and Benefits of Floodplain Protection Activities in Waterbury, Vermont and Willsboro, New York, Lake Champlain Basin, U.S.A. Lake Champlain Basin Program Technical Report No. 78.
• Western Carolina University (WCU) Program for the Study of Developed Shorelines. 2019. Coastal Hazards & Targeted Acquisitions: A Reasonable Management Alternative. North Topsail Beach, North Carolina Case Study.

Schiff et al. 2015 provides the least information - just the change in proprety tax revenue under different buyout or development scenarios for two towns (Waterbury, VT and Willsboro, NY). These values are not compared to existing municipal budgets.

The other four studies provide some estimate of costs (acquiring & removing properties, lost proprety tax revenue) and benefits (avoided flood damages, school district savings, avoided emergency responses). The exact costs and benefits included in each study differ, but all include lost property tax revenue to the municipality.

Freudenberg et al. 2016 looked at fiscal impacts of buyouts for five communities in the NY-NJ metro area. The study reports costs and benefits incurred by different parties (e.g., individuals, municipalities, federal government) and does not estimate a net fiscal impact on the municipality or a benefit-cost ratio. But it does report lost tax revenue due to potential buyouts as a percent of total municipal budget. Results were:

• Oakwood Beach, NY: <0.01%
• Milford, CT 1.36 - 5.78%
• Mastic Beach, NY: 1.07 - 5.9%
• Wayne, NJ: 1.08 - 5.38%
• Sayreville, NJ: 4.23 - 12.91%

In the analysis of North Topsail Beach, NC conducted by Western Carolina University, a cost savings of $2.8 M for the municipality over 30 years was found. This study quantified the benefits of avoided future shoreline stabilization and sandbag maintenance, which exceeded the costs of costs of acquisition, lost tax revenue, and sandbad and structure removal.

Salvesen et al. 2018 examined how policies that incentive buyout participants to relocate within the community can have a major impact on fiscal impacts of buyouts. In the eight North Carolina communities analyzed, relocation policies could mitigate the negative fiscal impacts of buyouts by nearly 88%.