Report warns climate change will hit real estate developers hard
President Donald Trump may not be interested in dealing with climate change, but he should be, especially since the real estate industry he has been involved with for decades is starting to take it seriously.
Partnering with global investment manager Heitman, a real estate investment firm with properties all around the world, the Urban Land Institute put together a comprehensive report warning that climate change poses a devastating risk to the industry, which is incredibly vulnerable to the effects of climate change and the natural disasters that will increase in number, intensity and frequency the longer nothing is done to prepare for it or to prevent it.
“This process will be painful for investors who are caught off guard, but those who are prepared have the potential to outperform,” the report said.
Trump’s own Mar-a-Lago resort and golf course in Florida is just one of his many properties that is in the crosshairs of climate change.
His refusal to acknowledge the reality of climate change puts him and other real estate developers and investors who think like him, in the most peril, according to Urban Land Institute CEO Edward Walter.
“Understanding and mitigating climate risk is a complex and evolving challenge for real estate investors,” he said. “Risks such as sea level rise and heat stress will increasingly highlight the vulnerability not only of individual assets and locations, but of entire metropolitan areas. Building for resilience, on a portfolio, property and citywide basis, is paramount to staying competitive. Factoring in climate risk is becoming the new normal for our industry.”
According to a CNBC report, climate change damage is getting worse.
Damage to U.S. real estate from extreme storms hit a record high in 2017. Natural disasters, including floods, mudslides and wildfires, cost more than $300 billion in damage, the bulk of it to residential and commercial real estate.
In 2018, from May through July, much of the East Coast, down to Florida, saw rainfall up to three times normal levels, according to the National Oceanic and Atmospheric Administration (NOAA). Nine of the top 10 years for one-day extreme precipitation events have occurred since 1990, according to the Environmental Protection Agency (EPA), because as the atmosphere warms, clouds hold more water.
Coastal areas are the most vulnerable to the effects of climate change, with much of the United States east coast predicted to be under water within 100 years if we continue to do nothing about it.
Taking the threat of climate change seriously now will not only save valuable real estate, but millions of lives that will be impacted. In the end, lives are far more important than real estate, but we can save both by acting instead of ignoring the problem. The real estate industry is doing something about it, so should the federal government.
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