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For property owners and developers, being underwater has long been a metaphorical shorthand for times of stress, when property debt exceeds property value or expenses exceed income. But the term now has a new meaning: Real estate may actually be underwater due to future climate change.

Hardly a day goes by without another report, editorial comment or prediction about climate change and its risks, convincingly documented by countless scientific studies. Observable and measurable evidence includes rising ocean and land temperatures; weather and weather-related events of abnormal frequency and intensity such as hurricanes, floods and wildfires; changing patterns of the biosphere; the acceleration of glacial melting at the poles and at extreme northern and southern latitudes; and sea level rise.

But you don’t need to be a scientist to understand that the economic and physical effects of climate change could negatively affect real estate. Risks exist at all geographic scales and in all locations: along coasts; in watersheds; on the hillsides; and in vulnerable urban, suburban and peri-urban areas. Individual buildings are also at risk, depending on their location and construction.

Recent reports worth reading include “Climate Risk and Real Estate Investment Decision-Making,” published by the Urban Land Institute (ULI) and Heitman, a real estate investment management firm. It really is a report that President Trump – real estate developer, investor and owner – might want to read. Basically monetary, it identifies the sources and impacts of “physical” risks and “transition” risks associated with climate change.

Physical risks are those caused directly by specific catastrophic events – hurricanes, sea level rise, drought, wildfires – which are ultimately attributable to climate change and changing weather patterns. Among the many negative impacts of such events are the dramatically increased costs of maintaining, repairing and rebuilding severely damaged or destroyed structures; the skyrocketing cost of property insurance; and losses of commercial and economic productivity after the event.

Frustrated by the high cost of real estate? Government regulation is partly responsible.

Less obvious are transition risks over time that are not attributable to single catastrophic events. Gradual climate change could reduce the growth and viability of the real estate market, as well as property values. Public policies and regulations aimed at mitigating the effects of climate change could increase capital and property expenditures, including taxes, insurance, code compliance, infrastructure and financing. Essential resources, such as energy and water, could become increasingly scarce and increasingly expensive.

The ULI-Heitman report pointedly cites volatility in the insurance industry resulting from uncertainty about an unknowable future and potentially skyrocketing premiums needed to cover ever-larger losses and claims. Viable and affordable insurance, key to risk management, depends on the ability to recognize and reasonably assess future risks.

As the report explains, the challenge is to determine how to measure and mitigate future climate change risks affecting the sustainability and physical resilience of the property, as well as property value, capital appreciation, income and liquidity. Real estate industry professionals are beginning to address this problem by analytically mapping the specific physical risks associated with the properties they own. Mapping integrates historical and current site-specific data with predictive geophysical, meteorological and economic modeling. Even the seismic risk can enter into the calculations.

Meanwhile, LEED-certified architects, engineers, developers and government agencies have already taken steps to address and mitigate the impacts of climate change. They use more environmentally friendly materials, more renewable energy sources and less fossil fuels, reducing greenhouse gas emissions that contribute to global climate change. Both the federal government and the district have adopted building codes and sustainability guidelines for site development and construction to create projects with a zero carbon footprint and minimal negative environmental impact.

Creating a secondary suite is not an easy task

Additionally, in many US jurisdictions, including the Washington area, construction in floodplains or designated wetlands is not permitted. This prudent policy protects parts of the natural landscape that are not only prone to flooding, but also retain surface and ground water while helping to control flooding.

The ULI-Heitman report cites Miami-Dade County in Florida to illustrate how a highly vulnerable region is trying to mitigate multiple climate change risks and increase regional sustainability and resilience. The county is a partner in the Southeast Florida Climate Change Compact, which has developed plans and committed funds to address greenhouse gas emissions, sea level rise, stormwater management and climate control. floods.

Remarkably, area residents have shown a willingness to pay higher taxes. “Miami’s proactive and strategic investment helps mitigate the inherent physical risks it faces and advocates for not highlighting regions at risk from climate change,” said Jim Murley, Miami County Resilience Director. -Dad. Sophisticated investors,” Murley added, “will look at both physical risk and what cities are doing to mitigate risk to all of their real estate assets.”

A regional pact like Florida’s would make sense for the Chesapeake Bay region encompassing low-lying and at-risk areas of Virginia, Maryland, Pennsylvania and Delaware.

In other words, you might want to keep your property in South Florida or on the East Coast.

The bottom line of real estate decision making is clear. To stay afloat, we must act together and make public-private commitments, regionally and selflessly, to implement and fund climate change risk mitigation. Otherwise, we will all end up under water physically and financially.

Roger K. Lewis is a retired architect, professor emeritus of architecture at the University of Maryland and guest commentator on “The Kojo Nnamdi Show” on WAMU (88.5 FM).

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