But you don’t need to be a scientist to understand that economic and physical climate change effects could adversely affect real estate. Risks exist at all geographic scales and places: along seacoasts; within watersheds; on hillsides; and in vulnerable urban, suburban and exurban areas. Individual buildings likewise are at risk, depending on their location and construction.
Among recent reports worth reading is “Climate Risk and Real Estate Investment Decision-Making,” published by the Urban Land Institute (ULI) and Heitman, a real estate investment management firm. This is truly one report that President Trump — real estate developer, investor and owner — might actually want to read. Fundamentally about money, it identifies sources and impacts of “physical” risks and of “transition” risks associated with climate change.
Physical risks are those caused directly by specific catastrophic events — hurricanes, sea level rise, drought, wildfires — that are ultimately attributable to climate change and shifting weather patterns. Among the many negative impacts of such events are greatly increased cost of maintaining, repairing and reconstructing seriously damaged or destroyed structures; soaring costs of property insurance; and post-event business and economic productivity losses.