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Sea Level Rise Could Have A Negative Impact On Commercial Lending

Rising sea levels could lead to declines in available financing for commercial projects. 

Commercial real estate developers in cities facing climate change threats could have a harder time acquiring loans if they have not prepared for potential infrastructure issues such as flooding, The Real Deal reports.

The city of Miami Beach sits on a barrier island across Biscayne Bay from Miami.

With sea levels near the Atlantic and Gulf Coasts expected to experience growth of 14 inches by 2100, the damage could be disastrous and this potential risk is causing banks to be more cautious about their lending habits.

Areas such as Miami Beach, which has experienced sea levels rising six times faster than the global increase between 2011 and 2015, are planning ahead. The city has invested an estimated $500K in infrastructure projects that will prevent damage from floods, which has given it an advantage over many other cities on the coast.

To offset any future challenges with infrastructure and financing, developers and local municipalities will need to begin thinking about the whole picture, including public transit, access points, highways and airports that are around the development site, incorporating necessary infrastructure that will mitigate hazards from climate change.