Examining Opportunities and Challenges for Implementing Land-based Financing Instruments for Funding Climate Action: A Study of Land Markets and Flood Risk Pricing in Different Contexts: Miami Case Study

Abstract

Assessing the efficiency of markets in pricing environmental risk is crucial for designing effective policies, especially as key climate risks evolve rapidly. This study explores how land and housing markets in Miami escalate climate risks, such as sea level rise, flooding, and heavy rainfall. It investigates the influences of various factors, including socioeconomic characteristics, public perceptions, institutional actors, information asymmetries, land use regulations, insurance market dynamics, social vulnerability, and climate gentrification. The study finds that underpricing of flood risk occurs due to exceptional amenities, behavioral biases, insurance subsidies, and a lack of information disclosure. However, sophisticated commercial buyers and risk-aware buyers are progressively incorporating this risk into their decision-making processes. The study explores reimagining land-based financing as a stabilizing force and examines value capture mechanisms as emerging financial sources for infrastructure projects. It also conceptualizes "resilience as a local service," advocating for the integration of resilience into local services governance. The findings provide valuable insights for designing effective policies to address the complex challenges of urban climate adaptation in coastal cities like Miami.