Environmental change is a major risk to the health and economic security of Americans, with impacts observed or anticipated on all sectors of the economy. The real estate sector is especially at risk from environmental change due to the complete immobility and relative illiquidity of land and building assets, which put property owners in local markets at risk, along with the national real estate market and the financial markets that depend on the steadily increasing value of real estate. The scale of the environmental risk to real estate across the United States represents a potentially catastrophic risk to the US financial system and macroeconomy. Government action is needed on an epic scale to protect Americans from the direct physical risks of environmental change along with the economic and social impacts that can negatively affect all Americans. This paper serves as an introduction to the topic of resilient locations and real estate, and the strategies that individuals, businesses, and governments can use to improve their resilience in the era of environmental change. The paper will add to the currently available literature and public information on the topic of climate change and real estate, by synthesizing publicly available information and drawing new conclusions using data analysis, to inform action on the part of individuals, businesses, and governments to preserve their interdependent economic security. The paper will also provide a new definition for resilient real estate, in contrast with common definitions of sustainable real estate, sometimes called green buildings. Current definitions of resource-efficient buildings often leave out the most important topic when discussing climate change and real estate, the direct physical impacts and transition risks that put asset holders in vulnerable locations at extreme risk of income losses and property devaluations, whether the property has energy efficient appliances or not. A property should not be considered sustainable unless it is also resilient, and to be financially secure in the age of environmental change requires environmental resilience. Building new Class-A resource-efficient buildings in environmentally vulnerable locations is the opposite of sustainability; it adds to the value at risk, and due to the shorter building life cycle means resources are not used more efficiently over the life of a comparably resilient but inefficient asset.
As the quantity of quality, resilient land in the United States is declining, the population and economy are growing, and through the forces of supply and demand, prices are likely to increase for environmentally resilient land over the coming decades. Due to the spatially asymmetrical impacts of environmental change in the United States and the locationally fixed nature of real estate, the individual property owner and the macroeconomy are put at risk by the under accounting for environmental change in current asset prices. The uneven impacts of environmental change on real estate across the nation presents an opportunity to individuals, businesses, and governments to adapt using resilient real estate strategy.
| Identifer | oai:union.ndltd.org:bu.edu/oai:open.bu.edu:2144/48432 |
| Date | 19 March 2024 |
| Creators | Grobstein, Jonathan |
| Contributors | Baldwin, James |
| Source Sets | Boston University |
| Language | en_US |
| Detected Language | English |
| Type | Thesis/Dissertation |
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