Climate change is a grim reality to life today. From melting polar ice caps to more frequent hurricanes, the signs of nature changing are evident. In such volatile factors, extreme weather conditions are not an uncommon occurrence.
Effects of Climate Change
The increasing number of wildfires every year damages countless properties. Meanwhile, the melting of the icebergs leads to a rise in sea levels that cuts into highly profitable sites. In Louisiana alone, the sea has claimed over 1333 sq miles of land from 1980 to 2010.
Higher average temperatures also meant more energy consumption in properties. The tenants require more protection from the heat and use various techniques to keep cool. A shortage of rain can also affect water availability for everyday purposes.
These factors also affect the real estate sector. In the US alone, over $1 billion of property damage has been attributed to weather disasters since 1980. Thus, climate change is an essential element that the real estate sector must address.
Human Involvement
Human involvement is the primary element resulting in climate change. Since the development of industries and mass-produced goods, carbon emissions have been upward. The use of single-use plastic products also contributes enormously to the harming of nature.
The real estate industry is not guiltless when contributing to the global carbon footprint. Reports show that the fuel used in construction and buildings contribute to a shocking 40% of the total carbon emission.
The Lousiana wetlands represent about 40% of the total wetlands in the Continental United States. But from 1983 to 2010, the state has lost almost 1900 sq. miles of land. The 3 million acres of land are lost to sea at the rate of 75 sq. miles per year.
Factors like the flooding of the Mississippi River and the rise in global sea levels are certainly to blame. But there is a reason why Louisiana is the world's fasted submerging state. Human activities like wetland dredging for agriculture are a huge reason behind the vast annual floods in the region. Digging canals and 'reclaiming land' from the marshland makes the area vulnerable. Without the protection of these natural basins, when the rains come surging in, it causes massive property damage.
Why It Is Not Too Late
The goal set by the Paris Agreement on Climate Change is 2 degrees celsius, and such a post-Covid plan could help meet this. However, it is not too late to change things. A recent Emissions Gap Report by the United Nations Environmental Program (UNEP) shows that an environment-friendly pandemic recovery policy would help decrease carbon emissions by 25%.
Aside from the UNEP, the Global Alliance for Buildings and Construction (GlobalABC) is another body taking firm steps to control emissions. It is a platform for civil society, the private sector, governments, and international organizations to unite for efficiency and zero pollution in the buildings and construction sector.
The production of zero-carbon concrete and steel is a goal that many of these parties are working towards.
Increase in Energy Consumption
The utility costs of owning a home go hand in hand with climate change. With an increase in average global temperatures, tenants and landlords have to resort to newer technology to keep cool. Such a change entails an increase in the energy consumption of the property. Coolers, fans, climate control, and AC contributed to the spike in energy levels.
In some areas, drought is a typical result of changes in the weather. Aside from drinking purposes, a property requires water for numerous purposes, including water for landscaping, laundry, general cleaning, and more. A drought significantly hampers such a system. It isn't easy to find enough water for utilities in such a circumstance.
In the cases of water shortage, the property manager has to be in charge of finding a solution. Such work may entail buying drinking water from companies. As a result, the expenses of maintaining a building suddenly spikes up.
Decreased Sales in High-Risk Markets
Global sea level is on the rise. With the drastic melting of the polar ice caps, most coastal cities all around the globe are expected to be underwater by 2050. Flooding, hurricanes, and unpredictable weather conditions are all signs of changes in nature.
The risk posed by these natural phenomena adversely affects the real estate market in their specific area. People are unwilling to buy property in areas where wildfires or storms are common. Today, property valuation in disaster-prone areas is significantly lower than those facing less risk.
Extreme weather conditions make tenants opt for properties in areas deemed 'safe.' As a result, there is a noticeable disbalance in population density. People were willing to pay higher fees to stay in safer areas.
Increase in Insurance Expenses
Climate change leads to an increase in the frequency and strength of disasters like storms, flash floods, blizzards, wildfires, and more. Living in high-risk areas like beaches or forests makes your property susceptible to damage. Therefore to cover the costs of these damages, it is crucial to get an insurance scheme for your property.
If your property lies in a high-risk area, you pay a significant amount of insurance. Companies aren't willing to provide insurance without the higher fees.
Sometimes property managers have to pay extra for added coverage on top of the insurance fees. It is sometimes impossible to find insurance companies in areas that face disasters annually. In such cases, property managers can seek help from the state.
How Can the Real Estate Sector Face Climate Change?
Installing solar panels or upgrading to an energy-efficient lighting system can help mitigate climate change. If every home in the country switches to sustainable practices, it can significantly impact energy conservation.
You can initiate change in the construction sector as well. When building structures and making renovations, if your business can reuse or use second-hand materials, it can save on excess waste and contribute to a cleaner planet. Connect with a consulting partner who understands the importance of green technology in your properties. Contact Assetsoft today!