Data Predicts Future Housing Climate Risks And Ways To Lower Costs

In today’s changing climate, a weather event can put someone out of their home temporarily or permanently in the blink of an eye.

If it’s that risky now, what about tomorrow? How can homeowners know their risks and protect themselves and the investment in their home for the 15- or 30-year span of a mortgage?

Understanding Climate Risks and Homeownership

“As the atmosphere warms, more water vapor will enter the atmosphere and lead to more intense events,” said Jay Banners a professor of geosciences at the University of Texas Austin during this session at the 2024 SXSW conference. “The temperature of the ocean is rising and we’re seeing record drought, which has been predicted by climate science. Theory and practice are all coming forward to bear on our situation today.”

Concerns About Natural Disasters

Censuswide and Realtor.com surveyed more than 4,000 U.S. respondents this year and found that 90% are concerned with at least one natural disaster, with the most concern around tornadoes, hurricanes, severe winter storms, and floods.

Climate Risk Factors in Homebuying

About 70% of homeowners took some type of local climate factor into account when buying their current home. Two-thirds of homeowners say they are concerned about the threat of natural disasters to homeownership, and half say they’ve become more concerned in the last five years about the threat of natural disasters to homeownership.

Access to Climate Risk Information

With Realtor.com’s launch of an environmental risk factor score for all listings, every homeowner and buyer can have access to climate risk information including extreme heat, wind, and air quality.

Access to this data allows both stakeholders to fully understand the climate risk associated with a property. Users can toggle between factors to see how a particular risk may affect a property now and in the future, showing current exposure to risks and the expected change for each risk in 15 and in 30 years.

Example Property Risk Factors

I found a small condo in Fort Lauderdale, FL, on the platform and the new risk factor information reports a moderate flood factor, meaning it has a 23% risk of flooding over 30 years. While the fire risk at this property is minimal, the heat risk is extreme – a 10 out of 10. The Realtor.com environmental risk factor says that over the next 30 years, the property is projected to experience a 260% increase in the number of days with a heat index above 105 degrees.

The air factor also is low, but the wind factor is extreme since it is in a hurricane prone area. The 10 out of 10 wind risk rating for this property means that during the next 30 years, it has a 99% chance of 3-second wind gusts of more than 50 mph.

Using Data to Understand Climate Hazards

The data is fed by First Street, a leading climate technology company that connects climate risk to financial risk.

“First Street takes all that information and translates it into what will actually be the climate hazard,” said Matthew Eby the CEO at First Street. “Then we use it to understand the risks today and how they are forecast to change in 30 years. For example, 17,000 structures are burned down on average every year due to wildfires. Over the next 30 years, we expect that annual number to double. Climate change is getting hotter, wildfires will be more likely, and there will be double impacted properties.”

Wildfire Risks

From 2020 to 2022, more than 26,000 structures and homes were destroyed by wildfires.

“Fires are happening where they have never happened before,” said Dr. Lori Moore-Merrell, U.S. fire administrator at the U.S. Fire Administration. “Drought, low barometric pressure, and no humidity in the atmosphere mean that we are seeing first ever happening a lot. We cannot control climate change, but what we can control is where we are building.”

One-third of the U.S. population currently lives in fire prone lands, where building is still allowed.

“We are not holding builders responsible to wildlife urban interface code,” Moore-Merrell said. “State jurisdiction may be adopted but not enforced. It comes down to recognition of the issue and then people to make the change.”

Certainly the data being more transparent and available to the public will change that. Plus, there are preventative measures to retrofit a structure, such as roofing materials, screens on vents, windows, not putting a wood fence around the home, not using mulch, not installing a wooden outbuilding structure.

Community design plays a role as well because there is increased risk to low-density residential.

“Clustered residential development is safer, but that’s a choice regulated by zoning by city officials, with input from interested developers,” said Donald Jones, president at Jones & Associates Economics. “Self-protective measures against wildfire damage by one homeowner yield benefits to neighboring homeowners, with the result that individual homeowners under invest in such measures, regardless of the price break offered in insurance policies.”

New, more resilient materials may increase costs, which challenges appraisers in many circumstances and can lead them to under value the risk prevention.

James Greer is vice president at Wildfire Defense Mesh and his product claims to stop a minimum of 98% of dangerous embers that might enter vents, enclosing decks, gutters, window and door screens, weepholes, external inlets and outlets, eaves and soffits, roofs and gulley leaf guards and perimeter fences. The solution is affordable, as a home can be retrofit starting at just $100.

Measuring The Costs

Realtor.com reports that 40% of U.S. homes, valued at nearly $20 trillion, are at severe or extreme risk when it comes to heat, wind, and air quality.

As presented in this SXSW session, CoreLogic analyzes U.S. properties using 22,000 data sources and about 3,700 data points per property. The organization also is doing research with the Federal Reserve Board to assess and understand risk profile to then pinpoint the financial impact of an event.

And, while the data exists and so do the prediction models, it isn’t always beneficial.

“Paralleling the garden-variety climate change denialism is reluctance of state insurance regulators, at the urging of local development authorities to allow insurance companies to use risk data derived from sophisticated climate models,”

SDGs, Targets, and Indicators Identified in the Article

1. SDG 11: Sustainable Cities and Communities

   • Target 11.5: By 2030, significantly reduce the number of deaths and the number of people affected and substantially decrease the direct economic losses relative to global gross domestic product caused by disasters, including water-related disasters, with a focus on protecting the poor and people in vulnerable situations.
   • Indicator 11.5.1: Number of deaths, missing persons, and directly affected persons attributed to disasters per 100,000 population.
   • Indicator 11.5.2: Direct economic loss in relation to global GDP, damage to critical infrastructure and number of disruptions to basic services, attributed to disasters.

2. SDG 13: Climate Action

   • Target 13.1: Strengthen resilience and adaptive capacity to climate-related hazards and natural disasters in all countries.
   • Target 13.2: Integrate climate change measures into national policies, strategies, and planning.
   • Indicator 13.1.1: Number of deaths, missing persons, and directly affected persons attributed to disasters per 100,000 population.
   • Indicator 13.2.1: Number of countries that have integrated mitigation, adaptation, impact reduction, and early warning into primary, secondary, and tertiary curricula.

3. SDG 9: Industry, Innovation, and Infrastructure

   • Target 9.1: Develop quality, reliable, sustainable, and resilient infrastructure, including regional and transborder infrastructure, to support economic development and human well-being, with a focus on affordable and equitable access for all.
   • Indicator 9.1.1: Proportion of the rural population who live within 2 km of an all-season road.

Table: SDGs, Targets, and Indicators

Analysis

The issues highlighted in the article are connected to several Sustainable Development Goals (SDGs). The main SDGs addressed are SDG 11: Sustainable Cities and Communities, SDG 13: Climate Action, and SDG 9: Industry, Innovation, and Infrastructure.

Under SDG 11, the article focuses on Target 11.5, which aims to reduce the number of deaths, affected people, and economic losses caused by disasters. The indicators mentioned in the article that align with this target are Indicator 11.5.1 (number of deaths, missing persons, and directly affected persons attributed to disasters) and Indicator 11.5.2 (direct economic loss, damage to critical infrastructure, and disruptions to basic services).

SDG 13 is also relevant to the issues discussed in the article. The targets under this goal include strengthening resilience to climate-related hazards and integrating climate change measures into policies and planning. The indicators mentioned in the article that align with these targets are Indicator 13.1.1 (number of deaths, missing persons, and directly affected persons attributed to disasters) and Indicator 13.2.1 (integration of mitigation, adaptation, impact reduction, and early warning into curricula).

Lastly, SDG 9 is connected to the issues discussed in terms of developing resilient infrastructure. The target mentioned in the article is Target 9.1, which focuses on developing quality, reliable, sustainable, and resilient infrastructure. The indicator that aligns with this target is Indicator 9.1.1 (proportion of the rural population living within 2 km of an all-season road).

Overall, the article highlights the importance of addressing climate-related risks and integrating resilience measures into policies, planning, and infrastructure development. The mentioned indicators can be used to measure progress towards reducing the impacts of disasters and improving resilience.

Behold! This splendid article springs forth from the wellspring of knowledge, shaped by a wondrous proprietary AI technology that delved into a vast ocean of data, illuminating the path towards the Sustainable Development Goals. Remember that all rights are reserved by SDG Investors LLC, empowering us to champion progress together.

Source: forbes.com

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