The institutional urban planning and real estate sector have felt climate change’s adverse impacts. In places like Charleston, SC, residents have to deal with issues like flooding in good weather at least once a week. The seepage of groundwater onto city streets has gone beyond a mere inconvenience, becoming a serious public safety issue.
Local officials are aware of this and are teaming up with organizations like the Army Core of Engineers for many possible solutions. These include a sea wall that will cost Charleston $1.1 billion,
City officials are aware of the vulnerability. So they’re pondering significant initiatives, like a partnership with the Army Corps of Engineers to build a $1.1 billion sea wall and a landmark zoning regulation that will stop construction in low-lying areas.
However, this has not put a crimp on ongoing construction projects throughout Charleston. While developers are certainly aware of flooding risks, they don’t see it as a roadblock to urban development.
How investors see the issue
Investors, on the other hand, are taking the impact of climate change on urban planning and zoning quite seriously. So while developers in South Carolina aren’t being challenged regarding their plans or charged more substantial capital rates, the real estate investment sector may soon pressure them to tan a more proactive stance regarding climate change risks.
Indeed, investors specializing in providing development companies with capital are beginning to pay closer attention to any solutions geared towards mitigating the adverse effects of climate change on cities and suburban residential developments.
A recent slew of studies conducted jointly by real estate investment firm Heitman and the Urban Land Institute noted that investors had revised their risk assessment strategies since the start of the pandemic. These strategies have shifted from considering only property-level risks to including risks on the market level.
The situation elsewhere
But Charleston isn’t the only place where developers seem oblivious to how climate change affects the real estate sector.
The ongoing pandemic has done little to stem the tide of construction and urban development in coastal areas like South Florida. But a number of both government and international agencies have sounded the alarm regarding extreme weather conditions like hurricanes which have wrought havoc and severe cost to life and property over the past several years.
Yet, even this obvious threat hasn’t forced developers to call it quits.