Climate change affects every aspect of our lives, from our diet to how we can survive natural disasters. Until now, the real estate industry had been relatively slow to address the issue of climate change’s impact on the market. However, as the world experiences higher temperatures and more frequent natural disasters, the impact of climate change on commercial and residential properties has become more apparent.
The cost of property damage caused by climate change in the US reached a record high of $300 billion in 2017. Most of the damage was concentrated in commercial and residential properties. Climate change is already having a significant impact on the real estate industry and it’s time for property owners and developers to take immediate action to address this issue.
The main driver of global warming is human activity. It’s believed that almost all of the current climate change is caused by the activities of humans since the Industrial Revolution.
During this period, the US and Europe started using fossil fuels in their mass production. Fossil fuels contribute to the accumulation of greenhouse gases in the atmosphere.
The Industrial Revolution led to the destruction of forests, which were then converted to farmland. Without trees, the emissions from burning of fossil fuels go directly to the atmosphere.
A 2020 Pew Research study revealed that over 60% of Americans believe that climate change is already having an impact on their lives. The study also revealed that due to the effects of climate change, forced migration has become more common.
The real estate industry is a major contributor to global warming. It accounts for about 40% of the planet’s carbon footprint. In addition to being used for construction materials, the industry also uses energy in various ways. This energy usage contributes to the accumulation of greenhouse gases in the atmosphere.
In the US, over 125 million commercial and residential buildings use about 75% of the country’s electricity. The two most common types of building materials are steel and concrete, which contribute about 8% to global emissions.
The rise of the LEED movement in the 1900s led to the establishment of new standards for the design and construction of sustainable buildings. This led to the development of the smart building concept, which uses technology to reduce the energy consumption of a building.
In response to the increasing concerns about climate change, the real estate industry in 2006 developed a set of guidelines that encourage the use of sustainable practices in the construction and operation of commercial and residential properties. These guidelines are designed to help property owners and developers meet the needs of their local communities.
Due to the guidelines, the number of sustainable buildings has increased. These are not only beneficial for the environment, they also boost the return on investment of real estate. By implementing these practices, property owners can lower their energy consumption and contribute to the reduction of greenhouse gases.
Climate change poses various risks to the real estate industry. In addition to rising temperatures, natural disasters such as hurricanes and wildfires can also cause severe damage to buildings. Each year, thousands of people are forced from their homes due to the devastating effects of these natural disasters.
According to a report released by Swiss Re, the extreme weather in 2020 caused insured losses in North America to reach over $100 billion. Redfin, a real estate brokerage firm, noted that there were over $200 billion worth of real estate in areas in California that were most at risk from wildfires. As a result, many people are fleeing from areas affected by climate change. The low property values that have been reported in these areas have also caused the US economy to shrink.
Due to the increasing number of natural disasters, it is now more important than ever that real estate companies adopt green building standards. This can help minimize the effects of climate change on the structure and value of their properties.
A study conducted by McKinsey revealed that the construction industry’s productivity growth rate has only increased by 1% over the past two decades. This means that it is in danger of falling behind other industries. This means that it is time for the industry to adopt a new productivity model that focuses on decarbonization.
Various tools have been created to analyze and predict the potential carbon emissions of a construction project. These tools can then help the industry make informed decisions regarding the use of low-carbon materials and products.
A survey conducted by a company called Nielsen revealed that over three in four millennials are planning on paying more for sustainable building solutions. The survey also showed that the younger generations are more aware of the effects of climate change.