BALTIMORE -- Business is good for Steven Murphy. Last year the Baltimore real estate agent sold $45 million worth of property in trendy waterfront neighborhoods including Fells Point, Locust Point and Canton.
Even after Hurricane Sandy inundated New York and New Jersey just last hurricane season; even after Hurricane Katrina devastated New Orleans in 2005; and even after Tropical Storm Isabel saturated the streets of Baltimore a couple years before that, money is flooding into waterfront properties.
Condominiums at new luxury complexes like the Ritz-Carlton Residences, with its own marina along Key Highway, and the lavish 24-story Silo Point condos, with terraces that tower over the harbor, sell for over $1 million.
Murphy, who has been selling real estate for more than 14 years, could recall just one client saying no to a home because of worries about storm surges. It happened last fall.
“I remember it very well,” Murphy said. “The buyer was looking in the Canton-Fells Point side of town, which is lower on the water table than Federal Hill.... But that’s the only time that has ever happened to me,” he said.
After Hurricane Sandy, he said, more people were concerned about flooding. But that, he said, didn’t last long.
“Once the media is on something, it’s high on people’s radars,” he said. “And after a couple years people lose that level of concern.”
The Baltimore Planning Department’s All-Hazards Plan, which provides information about various potential dangers, says the biggest threat facing the city is flooding.
“Coastal flooding…usually occurs as a result of nor’easters and hurricanes…(and) the city has suffered several significant floods that have led to loss of life and significant damage,” according to the plan, adopted in 2004.
And under Maryland law, real estate agents must disclose to a buyer any material fact or physical defect that could create a health or safety hazard -- such as if a property is in a flood plain.
Federally regulated or insured lenders require flood insurance before they will give a buyer a mortgage for properties in flood plains.
But home buyers, do not seem worried about floods, and Baltimore does not seem not prepared, said Joseph T. “Jody” Landers III, former executive vice president of the Greater Baltimore Board of Realtors.
“I think more people have decided to move out of Canton and Highlandtown because they can’t find a parking place than because they’re near a flood plain,” Landers said.
Skip Tolley, of Real Estate Professionals Inc., takes his clients out to view waterfront properties on his boat the “No Worries.” He said he has never had sellers say they were leaving their home because of worries over sea-level rise.
“Reasons for selling are mostly moving to downsize, moving closer to grandchildren, moving south to warmer weather,” he said, “but never because of rising tide levels.”
Landers, who was a Baltimore city councilman from 1983 to 1991 and who ran for mayor in 2011, said he’s not aware that anyone “has taken a serious look at this issue,” either in trying to deter more development in those areas or in trying to protect against floods.
“It’s like anything else,” he said. “We tend to kind of put things out of our mind unless they are brought to our immediate attention,” he said.
Jagadish Shukla, president of the Institute of Global Environment and Society and a professor of climate dynamics at George Mason University, says the public is simply uninformed.
“They are not ignoring it,” he said. “They are just not aware. We have not done a good job conveying to society what the consequences are.
“My feeling is that people will not ignore (sea-level rise) if it is really explained well,” Shukla said.
Shukla mostly blames the federal government for allowing local governments to give developers permission to build in flood plains “left and right.”
But the Baltimore City Council did pass a flood plain management bill in 2011 to protect against flooding and to meet requirements for eligibility in FEMA’s National Flood Insurance Program.
The bill said all new or improved residential structures must be built at least 1 foot above base flood elevation, which is the maximum height that floodwater is expected to rise once every 100 years -- also known as a “100-year flood”.
For Baltimore, this means that new structures must be built from 7 to 11 feet off the ground, depending on location.
At the Ritz-Carlton Residences off Key Highway in the Inner Harbor, Joe Graziose is not worried.
“We took the 100-year floodline, and then we went above that by roughly 14 feet with our first floor,” said Graziose, senior vice president at RXR Realty, which developed the buildings.
That is 5 feet higher than required for that location.
“We completed the building in 2008, and obviously it’s 2013, and we’ve never experienced any issues whatsoever. That being said, we also haven’t experienced tides over 14 feet,” he said.
Condos at the Ritz sell for anywhere between $500,000 and $2.5 million.
The most expensive condo -- a combination of six different units -- is assessed for $14.3 million and is owned by Tom Clancy, thriller author and part owner of the Baltimore Orioles.
Each Ritz-Carlton unit has at least one balcony, a private elevator, concierge service and can be customized almost any way the owner wants it.
“In order to build a Ritz-Carlton condominium you’ll probably spend 35 to 40 percent more in construction costs,” Graziose said, because the company has strict safety standards.
The standards outline everything from fire protection, to maintenance requirements, to window grade regulations. The windows are required to meet a classification that withstands winds of 110 mph, up to a Category 2 hurricane.
And with 22 boat slips, private patios that appear to float atop the harbor for all first-floor condos, and panoramic views of the Baltimore skyline from every window in the building, the appeal is obvious.
“The allure of being close to the water, especially for people who love being on the waterfront or people who are into boating, is just too powerful,” Landers said.
But with sea levels predicted to rise another 2 to 5 feet in coming decades, according to researchers, is the luxury worth the risk?
The National Flood Insurance Program eases people’s minds, said Landers, who is now a real estate agent with Prudential Homesale YWGC Realty.
But insurance will not cover the complete cost of losses.
“I guarantee flood insurance will not make you whole,” said Ken Hranicky, a Baltimore city planner and flood plain manager. “You will get a Band-Aid or a cast, but after that you are taking care of yourself.”
“Baltimore is not going to retreat from the waterfront,” Hranicky added. But “if we keep building on the water, people will suffer loss.”
Shukla, the climate researcher, said people have to understand the dangers of rising sea levels before they can make good decisions about living near the water.
“Organizations in the county that are constantly telling people, ‘Oh, don’t worry, nothing will happen,’ are creating confusion in people’s minds,” he said.
In 1972, Tropical Storm Agnes caused $33.9 million in losses in Baltimore. In 1993, Tropical Storm Isabel caused $462 million in losses in Maryland.
“I think people tend to forget, because it’s usually pretty docile and placid on the waterfront,” Landers said. “I think they tend to forget that they have an incident like an Isabel or an Agnes that those properties, and all of that waterfront down there” -- his voice rose -- “is at sea level.”
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