Stay Head of climate Change
Ways Real Estate Stays Ahead
Helping Municipalities Adapt
Different businesses and services are forcing other businesses and governments into dealing with climate change. Many businesses now try to curb their carbon footprints and improve their practices to be more environmentally friendly in the hopes of slowing down climate change. Even with these efforts, local and state governments are having to plan ahead with climate change at the forefront of their considerations.
One example of a company that might help to give municipalities the push they need to adapt to the new needs of their community is Moody’s recent announcement. Moody’s Corporation is an influential American business and financial services company that is changing how it calculates credit scores for U.S. cities and states. It is now including the potential for climate shocks in its calculation of credit scores.
This will likely push local and state governments to address climate change head on, and to prioritize investments in projects to adapt to climate change in order to prevent a downgrade of their credit rating. In addition to making communities safer from the results of climate change, another positive side of this is that businesses can take advantage of this opportunity to help cities adapt. They can do this by directly working on projects, and indirectly by helping to plan and/or donate time or money to various projects.
Stay Head of climate Change
Disaster Builds Resilience
Natural disasters such as hurricanes, fires, and earthquakes cause real estate prices to go down. Homebuyers are sensitive to threats of their safety. While these disasters are destructive and devastating to people who lose their homes and communities, rebuilding using innovative and resilient design can help accelerate recovery.
In the aftermath of natural disaster, building safety codes are often updated. An example of this is how Oakland, California recovered from the devastating 1991 wildfire that engulfed its residential, hillside communities. Homes were rebuilt using required fire-retardant designs, materials and landscaping. Streets were widened, fire hydrants were upgraded throughout the city, firefighters’ equipment was updated with wildland firefighting gear and fire shields, water cisterns were added to the area, and a new fire station was established in the hills.
As improvements began, this accelerated redevelopment by making homeowners who may have been thinking about relocating, feel more secure in rebuilding their homes. This in turn created opportunities for businesses to design and build them.
Less than three decades later, this area is once again a thriving community with homes selling at premium market value.
Technologies that are born of the ashes of this and other natural disasters can help real estate developers to continue to thrive.
Higher Level Thinking
Even though beachfront properties across the United States are still pricier than similar properties just a short distance inland, trends indicate that people are moving to higher ground. According to one data collection agency, home sales in counties that do not typically flood grew 25% more quickly than in flood-prone coastal areas.
It is costly to live in flood prone areas because of insurance and the costs of repairing damages after a flood. Insurance premiums are increasing which winds up depressing the value of homes in areas of frequent flooding. The property taxes in flood prone areas are also increasing as municipalities need money to raise roads, enhance drainage, and to build and reinforce dams, levees and sea walls.
Some flood prone areas such as Miami, Florida are seeing a gentrification in less affluent neighborhoods that are above sea level, on a coastal ridge while homes exposed to sea level are selling at a discount.
It is important for real estate and property developers to keep abreast of climate change trends and how they may affect the markets in their areas.