Venice has been keeping flood records for 150 years, though it is generally understood that the city has been regularly flooding since the very beginning. It usually happens between the fall and the spring and the earliest record is believed to be from the 6th century.
This past week, Venice saw its acqua alta (or high water) peak at 187cm (6'2") above its normal level. This is the second highest number on record and is just below its 1966 peak. At these numbers, about 80% of the historic center is underwater. Here is a chart from the WSJ explaining that:
Venice has been working on a flood management project called MOSE since the 1980s. The name is an acronym, but there's a deliberate biblical reference here. Remember when Moses parted the red sea?
The project has been mired in engineering delays and corruption scandals, and so it's not yet operational. If it were, it would have, in theory, protected the city this past week. 2022 is the anticipated completion date, but I don't know if that's realistic or not.
The system consists of 78 mobile gates that fill with water and sit flat on the seabed when the tide is low. When a high tide is predicted, the gates are then to be pumped with air so that they rise (hinged on one side) and close off the three inlets that connect the Venetian Lagoon to the Adriatic Sea.
As I was reading about this project and everything else that has been going on in Venice this past week, I became curious about how exactly the Dutch have been managing to hold back the sea. I mean, a big chunk of the Netherlands sits below sea level.
If you're also curious, here's a video that explains how they do it.
In the comments of my recent post about Manhattan real estate prices during the Great Depression, a regular reader of this blog shared this terrific blog post (and corresponding research paper by Piet Eichholtz) about house prices along the Herengracht canal in Amsterdam from 1628 to 1973. Later it was updated to include up to 2008. It’s a long run house price index.
Probably the first thing you’ll notice is that the index is highly volatile. Amsterdam enters its Golden Age, creates the world’s first stock exchange, and becomes the wealthiest city in the western world – house prices go way up. The tulip mania bubble pops – house prices go way down. It’s not until after World War II that prices sort of start to stabilize and increase, maybe, more consistently.
In nominal dollars, the house price index increases 10x over the study period. But in real dollars most of that disappears. The biennial increase (that’s how the study was done) over the same period of time is just 0.5%. That translates into a doubling of house prices, which may seem quite good, except that remember it’s over a 380 year time period.
The Herengracht canal is a particularly good study because it was and has remained (or so I’m told) a desirable part of Amsterdam. This is an attempt to control for the variable that maybe some of the volatility could be explained by the area simply falling out of favor. (As a quick sidebar, the Herengracht was one of the first canals laid and dug out around the original city center of medieval Amsterdam during its Golden Age.)
Generally, this finding is in line with one that economist Robert J. Shiller famously published a number of years ago where he argued that, when you correct for inflation, home prices actually look remarkably stable over long-run forecasts. In one study, he looked at 100 years of US home prices ending in 1990. Real home prices increased about 0.2% a year. What an outstanding hedge against inflation.
This past February, a new central train station opened up in Delft in the Netherlands. As part of the train station, there’s an underground parking facility for 5,000 bicycles.
Here’s a video of how it all works:
[youtube https://www.youtube.com/watch?v=UuhLv1AN0bE?rel=0&w=560&h=315]
Isn’t it amazing what you can achieve when you decide to make something a priority?