With densely developed and populated areas situated along hundreds of miles of shoreline, the accelerating impacts of climate change stand to have a disproportionally severe impact in New England. Our shores are not only home to all manner of coastal residential real estate submarkets, but also major commercial downtown centers, significant seaports and industrial parks, airports, wastewater treatment facilities and other substantial critical infrastructure, not to mention prominent coastal economic sectors, such as tourism and commercial fishing.
In April 2016, the chief economist for Freddie Mac, Sean Becketti, issued a striking warning regarding climate change – in particular rising sea levels, changing weather patterns, and increased flooding – and its looming impact on coastal real estate markets. He noted that many future impacts now appear unavoidable even if significant and coordinated global action were to move forward, and that potential responses to coastal climate change risk will not be entirely sufficient to stave off rising sea levels and spreading flood plains. Most alarmingly, Becketti observed that the “economic losses and social disruption may happen gradually, but they are likely to be greater in total than those experienced in the housing crisis and Great Recession.” Indeed, the World Economic Forum’s 2017 “Global Risks Report” identifies extreme weather events and the failure of climate change mitigation and adaptation as the most significant long-term risk facing the global economy.
With this in mind, the Massachusetts and Rhode Island Chapter of the Appraisal Institute has developed a 2-hour educational offering which hopes to take an evidence-based look at the risks facing economic sectors and real estate markets along New England’s coastline. On June 26 in Providence, the chapter will assemble a panel of speakers with expertise in public and environmental policy, ocean engineering and marine science, planning, and financial risk management and flood insurance regulation. US senator Sheldon Whitehouse (RI) and Grover Fugate, executive director of the Rhode Island Coastal Resources Management Council, will discuss the threats our economy faces from climate change, and what climate change, sea level rise, and storm surge will mean for coastal communities. Teresa Crean, Coastal Community Planner from the University of Rhode Island Graduate School of Oceanography’s Coastal Resources Center and RI Sea Grant, will share the latest tools under development to assess risk of flooding and damage from storms and future sea level rise, and discuss how these tools are being used to inform state and local decision making to protect public health, safety, and welfare. Marc Guerin, senior vice president and director of real estate risk services of Citizens Financial Group, will outline statutory and regulatory requirements for financial institutions and how they impact risk management within a lending institution’s appraisal division.
Real estate professionals have the opportunity to become leaders in understanding climate change and preparing for its effects. Real estate appraisers not only understand risk analysis, but, as a profession, hold a substantial reservoir of necessary knowledge and skills which could prove essential in assessing and managing the economic and real estate risks of changing climate. Given the profession’s particular mission to promote and maintain a high level of public trust, appraisers will be in a unique position in the coming years. The June 26 event will be an important first step for real estate and valuation professionals in taking a proactive role, not only in understanding climate change, but also in communicating climate change risk to users of valuation services, other market participants, and the general public, as well as promoting preparation and adaptation to its unavoidable consequences.
Beginning at 9 a.m., the event, held just a few steps from the shores of the Narragansett Bay at Save the Bay Center in Fields Point, will conclude with networking and a luncheon. Please register at www.massri-appraisalinstitute.org/.
Bradford Hevenor, MAI, is chief appraiser at Markus Appraisal Inc., Wakefield, RI