Climate Change Resilience in Real Estate

 

Resilience is defined as the capacity to recover from difficulties; toughness.  As it specifically relates to social communities, resilience is the ability of a system or community to survive disruption and to anticipate, adapt, and flourish in the face of change.

Tacking onto the blog from last week about natural disasters and the cost to rebuild, it makes sense to talk about how adapt to these costly disasters in the first place.  Setting aside climate change as a politically-charged debate topic, industry leaders are building climate change into their five, 10, and 100-year plans.  It is having an impact on the housing industry accept it or not.   The hot topic is resilience and it has everything to do with property values, insurance rates, and population movement.  At its core, resilience in housing starts with location, location, location.   Not a shock; people don’t want to buy homes in locations that are more exposed to danger.   So what trends are there?  Miami continues to be a trendsetter but now the trend isn’t fun.  It’s a well known fact that high tides already flood portions of Miami, most specifically Miami Beach which is a barrier island (no longer being very effective at doing its title job).  As recently as October 5, the high tides made Miami Beach, and also inland Miami, looked like a tropical storm had come through http://www.miaminewtimes.com/news/miami-king-tides-flooding-city-like-a-hurricane-again-today-9725153.  (Though, the jury is still out on how many fish swim in the street as Obama’s famous “fish in the street” comment through up debate:  http://www.politifact.com/florida/statements/2015/dec/04/barack-obama/do-fish-swim-streets-miami-high-tide-barack-obama-/ )

Compared to national sales, property sales in Miami are down—a slow but steady trend that was occurring prior to this year’s rounds of tropical storms and hurricanes.  Investors are already moving inland and there’s a rise of gentrification of lower economic areas as what was once less desirable higher ground further into Miami is becoming more desirable than traditionally expensive oceanfront property. Hugh Gladwin, http://www.climatecentral.org/news/climate-change-us-real-estate-prices-21720

What does this mean for areas that are more adaptable and resilient?  Say, Western NC for example?  As more disaster-prone areas see more and costlier disasters such as Harvey, people will migrate to safer locations like ours.  We are less prone to tornados, less prone to flooding like tidal surges (though still prone to river flooding), and less prone to fire (though drought has seen this change a little, i.e. Fall 2016 fires throughout the mountain region).  Asheville is already a top 10 destination; can we handle a surge of population growth and increased prices?  Certainly more people means more building, more need for infrastructure, and a huge impact on the land.  The ability to handle this impact will also affect our resilience.  Time to keep a keen eye on how our institutions face this challenge.

If this topic piques your curiosity, check out at some extra articles that I ran across listed below.

https://www.theguardian.com/environment/2017/aug/31/us-risk-flooding-harvey-boston-new-york-miami-beach

https://money.usnews.com/money/personal-finance/saving-budget/articles/2017-04-14/how-climate-change-will-impact-homeowners-insurance

https://www.sciencedaily.com/releases/2017/08/170817092825.htm

I’m not sure this following list takes into account dangers other than climate change such as earthquakes and pollution: http://www.businessinsider.com/best-us-cities-escape-climate-change-2017-9/#philadelphia-pennsylvania-13

 

 

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