Two years ago, the IREM blog asked the question “Is Climate Change Important?” because a survey that year showed that real estate industry leaders ranked “climate change/global warming” last among their concerns.
This year, PwC and the Urban Land Institute addressed the issue head on in a 2-page section in their Emerging Trends in Real Estate® report. Asking the question, “Are the risks recognized?” the report noted that “Compared with their thoughts on issues like job growth and construction costs, respondents placed much less importance on the risks of extreme weather, energy prices, sustainable buildings, water conservation, and water regulations.” While the authors can’t explain why the issue doesn’t rise higher in the level of concern, they theorize that it is “the perception that climate change requires collective action at a significant scale,” and is beyond the investment horizon of most real estate projects.
But the impact of climate change is already apparent in the form of extreme weather events that threaten existing buildings. So planning for a distant catastrophe is not only about future investments. It is about managing risk now. Large investors are already pricing this risk into their valuations—and finding value in mitigation strategies such as energy efficiency and building resilience.
Resilience is not achieved by a single action or series or actions or modifications. It involves taking a strategic approach, and considering how to address the systems, structures, and processes that take place in a physical space. Some options from the Resilient Design Institute include:
- (Re)Locate critical systems to withstand flooding and extreme weather events.
- Model design solutions based on future climatic conditions as much as possible, rather than relying on past data.
- Create buildings that will maintain livable conditions in the event of extended loss of power or heating fuel through energy load reductions and reliance on passive heating and cooling strategies (passive survivability).
- Reduce dependence on complex building controls and systems. Provide manual overrides in case of malfunction or temporary power outages.
- Optimize the use of on-site renewable energy.
- Carry out water conservation practices and rely on annually replenished water resources.
- Provide redundant water supplies or water storage for use during emergencies.
- Consider design practices that were prevalent before the advent of air conditioning and central heating. Combine with modern materials to optimize resilient design.
- Provide redundant electric systems with at least minimal back-up power capacity.
- Maintain on-premises, non-perishable food supply that could provide residents with adequate staples for a 3-to 6-month period.
The Emerging Trends report identifies ways that businesses are currently incorporating resilience thinking and adaptation measures. For example:
- Installing backup and on-site power;
- Investing in higher-quality construction to withstand risks (often above code);
- Avoiding construction in high-risk areas;
- Conducting risk assessments that incorporate severe weather impacts;
- Securing enhanced insurance; and
- Developing emergency management, disaster recovery, and contingency plans
As you move to increase energy efficiency, resilience, and risk management for your properties, the IREM/Rocky Mountain Institute course series: Analyzing and Presenting Deep Retrofit Value can guide you in developing your capital plans.
As storms and natural disasters continue to worsen, it is incumbent upon real estate managers to recognize the risks of climate change and to consider the resilience of the properties in their care.
About the Authors
Mindy Wallis is a Senior eLearning Developer at IREM Headquarters in Chicago. She works with IREM members to develop content materials, including classroom and online courses.
Todd Feist is the Sustainability Program Manager at IREM Headquarters in Chicago. He develops classroom and online courses and helps manage the IREM Sustainability program, including the IREM Certified Sustainable Property certification.
Photo Credit: Hoboken Ambulance Swallowed By Hurricane Sandy Flood Waters by accarrino via Compfight cc