Making the case for stormwater resilience

How we led an interdisciplinary team to build a powerful, data-backed business case for stormwater resilience investments in Miami Beach.

Summary

ICF led an award-winning interdisciplinary team in this pilot study to understand the business case for stormwater resilience investments in Miami Beach. The study considered the effect of sea level rise and infrastructure investments on factors such as flood damages, property values, insurance premiums, tax revenues, business disruptions, and more.

Challenge

Miami Beach is experiencing sea level rise. As a result, the city is developing an ambitious program to combat its flood risks. However, the city needed more data on the economic implications of its investments before advancing this program.

The goal of this study was to understand and communicate the business case for stormwater resilience investments in Miami Beach through robust data analysis and state-of-the-art modeling. This study developed a unique formula for Miami Beach to determine the economic benefit of adaptation and the city’s stormwater resilience improvements.

Solution

We conducted a business case study with an interdisciplinary team that included Kimley-Horn, AIR Worldwide, Brizaga, and Florida Atlantic University. The business case evaluated three scales of resilience investments: an individual home, a neighborhood, and citywide. The analysis innovatively integrated three types of state-of-the-art models.

Stormwater Model

This study used an integrated 2-dimensional surface and groundwater modeling software (ICPR4, the Interconnected Pond Rounding model version 4). The model combines rain, tides, and groundwater. It captures how flooding is reduced through stormwater pipes, pumps, and elevation. For the First Street neighborhood, the model showed that the city's proposed investments including stormwater pipes, pumps, and elevating the road reduce the level of water enough to eliminate flooding to buildings during the five- and ten-year rainstorm events.

Miami Beach Example Results
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Catastrophic Risk Model

This study used the AIR Tropical Cyclone model to estimate expected losses from storm surge with and without sea level rise, and to estimate the effects of public and private flood mitigation measures on both expected losses and associated insurance premiums. The modeling shows that a sea level rise of approximately one foot (compared to 2013 levels) will produce approximately a doubling in the losses from small to moderate hurricanes and a 25 to 30% increase in damages from severe hurricanes (e.g., a direct hit from a major hurricane).

Property Value Model

This study used a hedonic pricing model to determine the effects of public and private investments on home values. Hedonic modeling is a statistical analysis technique used to isolate how much people are willing to pay for a particular characteristic related to a home purchase—in this case the parcel elevation and the elevation of nearby roadways. The model was based on actual home sales prices in Miami Beach from 2005 through January 2019. The analysis was independently peer-reviewed.

Results

We concluded that public and private adaptation are both critical components of Miami Beach’s overall resilience. The benefits exceed the costs for the resilience investments we analyzed.

Citywide investments of at least $2 billion for road elevation and storm protection would be cost beneficial. Investments could lead to a 4.9% to 14.1% increase in residential property value per foot of nearby road elevation, and an 8.5% to 11.5% increase in residential property value per foot of parcel elevation.

The city’s proposed public infrastructure improvements reduce the flood risk to individual properties. However, the city’s investments will not remove all flood risk and there are a range of cost beneficial options that property owners can take to further manage their risks.

This study developed a methodology that can be applied to other communities to help them understand the economic benefits and costs of resilience investments.

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