Climate Risk Assessments & Climate Refugees will Impact Property Values

Here’s another way that real estate prices will be getting more expensive: places that are not as impacted by climate change will see values increase as more “climate refugees” move there. And the price of insurance for homes will also be increasing as heat maps of climate risk in municipalities become normalized.

Think of hazard heat maps as the  “Walk Score” for property values in the 21st century.

Emma Paling of CBC  writes that climate risk assessments will be the next tool added to real estate inventories, and that future home buyers will see value in purchasing property with ocean views, but not  close to water with future sea rise, storm surges, and flooding potential.

Propublica’s data in this article by L. Waldron and A. Lustgarten  suggests that climate “damage” will mean that the southern third of the United States will become so hot it will disrupt the economy “erasing more than 8% of its economic output and likely turning migration from a choice to an imperative.”

A company in San Francisco, ClimateCheck does risk assessments based upon address for the United States. The tool has  been added to Redfin’s real estate listings on the web. Properties are ranked from 0 to 100. The closer to a 100 score the more  most risk. The tool is being adapted for Canadian use.

Since the disastrous flood in Calgary in 2013 costing five billion dollars of damage, flood risk information has been provided by realtors.  Price point and location of where buyers want to purchase homes has not yet been impacted.

But as more climate change events impede low lying or properties that do not have good drainage, it is expected that climate change insurance will be tailored to topographical location and take into account associated risks in proximity to water, hardscapes, and other hazards.

The Province of British Columbia has already conducted a province wide assessment on potential risk factors and evaluated the probability of fifteen “climate risk” events along with economic, environmental and human consequences.

Produced in 2019 it was the first in Canada to look at a provincial climate risk assessment.

After the weather this summer it is no surprise that the greatest risks in this province are identified as “severe wildfire season, seasonal water shortage, heat wave, ocean acidification, glacier loss, and long-term water shortage”. 

Other risks identified were storm surges and “severe” river flooding with  provincial economic and environmental ramifications.

The report and the executive summary of the report are available here.

Last year I wrote about projection models showing that millions of people in the United States would be moving to northwest and northeast cities, with populations in places like Minnesota, Michigan and Vermont  growing by ten percent.  These areas will be seen as more temperate and inviting.

Cities like Detroit, Rochester, Buffalo and Milwaukee will be sought after for relocating climate refugees for the “excess capacity in infrastructure, water supplies and highways”.

In the first year of the pandemic Pacific northwest median sales prices  in Bellingham Washington rose 16.5 percent, and the number of homes sold has increased 26 percent.

It’s not too late to commence a co-ordinated approach to climate change with all levels of government, as Duke of Data and Simon Fraser University City Program Director told CBC’s Ms. Paling.

“Canadians need to start demanding “political courage” from all levels of elected leadership to mitigate the impact of climate change on housing and infrastructure and more policies like taxes on foreign buyers and empty homes. We just can’t afford to surrender.”

The YouTube video below talks about the new climate refugees who are moving to areas with less extreme weather, abundant water,  better infrastructure and transportation options.