A key reason why some ecosystem services are undervalued is because they are not easily perceived both by beneficiaries and potential providers. Hydrological modeling allows us to assess, quantify, and visualize the causal link between a particular human intervention and the positive or negative impacts this has on flooding. This study uses such a model to test hypothetical changes in land use in the Brazilian coastal city of Paraty. We discuss how the adoption of higher density patterns of urban development can respond to the needs of a growing population, while safeguarding cultural landscapes of high environmental value against unsustainable urban sprawl and encroachment. Results of the modeling exercise show how water-flow regulation services can be improved, and to what extent restoring natural functions and properties of peri-urban floodplains may reduce urban flooding.