This great piece in the New York Times points out that banks are already requiring higher down payments on houses in coastal flood zones in anticipation of rising sea levels due to climate change. Even buyers are increasingly taking “interest only loans”, where they are a building 0 equity, presumably because they believe that the home will be worth nothing, shortly.

The changes are modest, but starting. Fannie Mae and Freddie Mac are still backstopping these mortgages, under the guise that flood insurance is a sufficient protection, but the reality is many homes in the US, and therefore quite a bit of property value and household wealth, will be destroyed in the next 50 years.

What can we do from a policy perspective? With our politics utterly polarized on the belief of science, the government seems unable to begin to price in the costs of climate change to protect our economy and provide a true caveat emptor to homebuyers. I expect that the debate of the 2040 election might be which wealthy people get a bailout due to climate change destroying their homes and wealth.

I don’t expect to be sympathetic.