Miami Beach, FL, December 27, 2022 --  

Miami has been dodging the bullet of a major hurricane for 96 years. Its luck can't last forever.

When Hurricane Ian ripped into Florida's Gulf Coast in October, the boomtown of Cape Coral took a direct hit. The category 4 hurricane created a storm surge ranging from 10 to 15 feet inundating residential properties in the area, many of them newly built over the past decade. Breakneck development in Cape Coral has doubled the population of the city since 2010 to reach 200,000 people, making it the largest city between Tampa and Miami.¹

While floodwaters have since receded, 59 people lost their lives in the county², and residents suffered over $5 billion in property damage³. That property damage will add even more stress to Florida's troubled insurance industry, which has seen many companies become insolvent and go out of business or pull out of the state, leaving dubious providers and a state-run insurer of last resort named Citizens Property Insurance as the largest provider.

Two weeks ago, the Florida legislature passed a law to shore up the property insurance market, including a $1 billion taxpayer fund to backstop insurers, a ban on assigning insurance claims to contractors for collection, relief of insurers from paying legal fees, and a requirement of policyholders in the state-run system to purchase flood insurance.⁴

Skeptics doubt that the law will have much affect on residents largest concern -- skyrocketing premiums. But it is clear that the reforms will do nothing to stop another looming disaster that is guaranteed to wipe out the industry.

Before heading west, Hurricane Ian initially looked like it might strike Florida's Atlantic coast in the Miami area. While the damage to new low-density developments in Cape Coral cost an estimated $5 billion, the cost of a direct hit on dense Miami by a 100-year hurricane could cost over $250 billion⁵, a number that makes Florida's new $1 billion insurance backstop look laughable by comparison. Such an event would bankrupt every insurer in Florida and the state government itself.

Mapping the Disaster, Courtesy: Federal Emergency Management Agency 2021

Could this happen? Yes. In fact, such an event is almost overdue. The last direct hit on Miami Beach was in 1926, just four years shy of the 100-year marker used to measure such storms. That hurricane wiped clean much of the beachside boomtown and leveled new developments in the city across the bay. Since then, several Hurricanes have affected Miami but only two major ones -- Donna in 1960 and Andrew in 1992. But both of those storms made landfall dozens of miles away from the city, yielding only glancing blows.

As devastating as the Great Miami Hurricane of 1926 was, it was nothing compared to what would happen if a similar storm hit today. Miami-Dade county is now home to over 2 million people, with the most expensive properties clustered along the coast. The blue-tinted regions of Miami Beach and downtown Miami on flood maps from the Federal Emergency Management Agency show where a major storm surge would wash over densely developed coastal areas, flooding homes, hotels, and retail businesses with sewage-tainted brackish water.⁶

Many of these areas like Miami's Brickell neighborhood host multi-billion dollar skyscrapers with the density of Manhattan, with an increasing number of supertall structures that are (in theory) designed to withstand hurricane force winds, but have never been tested. Just a single failure out of hundreds of structures would eclipse last year's Champlain Towers South disaster.

Yet developers in Miami keep building in this danger zone. Willing buyers put their money down on properties that face inevitable destruction and have no realistic hope of being covered by insurance companies. Only once a storm similar to Hurricane Katrina finally turns Miami into a disaster area will developers and property owners finally face reality.

What will happen next is hard to predict. Once the rubble is cleared and flooded dwellings gutted, will the ultra rich who can afford to absorb such losses build anew? Will there be enough of them to make Miami Beach and the Biscayne Bay shore a pleasant place to live? Or will new development shift inland to higher ground and displace industrial areas and working class residents? Or will the whole city fall out of fashion and become a depopulated backwater, much like happened to Galveston after its devastating 1900 storm?

None of these are attractive prospects. But whatever the outcome, the best that current residents can hope for is to delay the inevitable. Miami has gone 96 years without a direct hit of a major hurricane. But if luck remains in its favor, the city might keep the good times going for a few decades more.

Related Web Columns:

Sinking Prospects, October 18, 2022

Exhibition of Disaster, Februrary 22, 2022

Notes:

1. US Census Bureau, Cape Coral Quick Facts, as posted October 18, 2022

2. News-Press, LCSO: Nearly 1,000 Rescued, 59 Dead; Hurricane Search and Rescue Expected Through Saturday, October 6, 2022

3. WGCU News, Lee County has updated the Hurricane Ian Damage Assessment Map, October 8, 2022

4. Tampa Bay Times, Florida Legislature Passes Property Insurance Overhaul, December 14, 2022

5. Miami New Times, 100-Year Hurricane Could Cost $250 Billion If It Hit Miami, April 16, 2015

6. Federal Emergency Management Agency, Flood Maps, November 10, 2021