Climate risk scores could reshape Canadian real estate markets some experts say

If the house you're about to buy is going to be under water in 30 years, should that be disclosed during the sale?

Chris Chopik says "yes." The Toronto real estate agent has been calling for years for a climate risk assessment to be added to real estate listings in Canada the same way that data is readily available on the ease of walking from any address. He said these conversations need to become commonplace and factored into a property's value.

"For sure, I would say consumers should consider where they're buying, and what they're buying, in the context of climate risk," he told CBC News.

"So if I'm buying seaside, I'd rather buy high. Let me get a seaside cliff, not a seaside beach."

Chris Chopik is a real estate agent in Toronto who for years has called for climate risk scores to be added to property listings. (Submitted by Chris Chopik)

This type of information has become more accessible in the United States in recent years, and it'll likely be available for Canadian properties soon.

At a time when the United Nations is warning that climate change will bring more extreme weather events, it's already raising questions about who will be able to move to areas of relative safety, and who will be left behind.

'Top of mind' for next generation

A company in the San Francisco area, Climate Check, launched a website about 18 months ago offers a free report on risks posed to any U.S. address from climate change. 

An address's risk is ranked from 0, the least risky, to 100, the most risky. More detailed reports are available for a fee. Users can also read more general breakdowns of the risks for each state. Earlier this month, Climate Check's risk ratings were added to every listing on real estate brokerage Redfin's website.

The Climate Check website provides a free climate risk assessment for any address in the U.S. The company is working on a tool for Canada, too. (Screenshot/ClimateCheck.com)

The company is working on a site for Canada which could be launched early next year, principal Cal Inman told CBC News. 

"I think realtors are using it as a tool to answer questions that they're getting every day from homebuyers," Inman said. "In particular, younger generations are asking these questions. It's top of mind."

Another group called First Street Foundation has an online tool called Flood Factor, which can provide a flood risk assessment for any U.S. address.

A woman stands in the backyard of her home in the flooded community of Bowness after about 100,000 people were evacuated from their homes in Calgary in June 2013. (Nathan Denette/The Canadian Press)

In Calgary, Chopik said, some of this data has been available to agents for the better part of the last decade. Real estate services company Pillar 9 provides flood mapping data to realtors through the Calgary Real Estate Board. 

The catastrophic flood of 2013, which killed five Calgarians and caused $5 billion in damage, prompted the board to start providing this data, according to Pillar 9 CEO Shane Griffin. But he said he doesn't believe the data has had a big impact on the market or affected home prices in areas that are more vulnerable to flooding.

"From what we see for transactions, would it stop somebody from buying a house? I don't think it would," Griffin said in an interview. 

"But would it potentially give them that knowledge that they need to safeguard the property or ensure that their insurance is correct, or any of that other work that they should do? Yeah, it gives them the opportunity to be proactive."

WATCH | Canada is already seeing wide-ranging impacts of climate change: Canada could see more fires, floods from climate change6 days agoAs the UN’s new climate report sounds the alarm about global warming, scientists say Canada could see more extreme weather, including drought, fires and floods as the global temperature rises. 4:38 'People almost forget'

Chelsea Mann is president of the Kamloops and District Real Estate Association in British Columbia, an area where wildfires have raged this year.

She said agents don't have access to any general data about a property's wildfire risk and don't get many questions about it. During fire season, there are many resources for people to check on active fires and smoke forecasts, she said.

"This year, obviously, has been extreme," Mann said in an interview. "And we have had a few years in the past that we reference â€" you know, 2003 and 2017. But in between, it's a little interesting that people almost forget."

Other experts and academics, however, say climate change may already be reshaping some housing markets and could even create new types of gentrification.

'We run the risk of people being trapped'

Jesse M. Keenan, an associate professor of real estate at Tulane University's School of Architecture in New Orleans, studies the ways that climate change affects housing and real estate markets. 

He was one of the authors of a 2018 case study which found that since 2000, homes in Miami at a higher elevation have appreciated in value more than homes at lower elevations.

"There's examples all around the world, where different shifts of population are crowding out people when they move because of climate change, stress or shock," he said in an interview. 

Another example is Chico, Calif., where rent prices increased after a neighbouring town burned to the ground in 2018, Keenan said.

"It's basically climate gentrification."

Amber Blood looks at a figurine she found in the ashes of her home lost in the Camp Fire in Paradise, Calif. in October 2019. A real estate agent, Blood said even she had trouble finding a home after the fire because there was not much available. (Rich Pedroncelli/The Associated Press)

He said tools like Climate Check and Flood Factor will have both positive and negative impacts. The good thing is that people will know what to expect, and investment can be steered away from high-risk areas. 

"Of course, for the people that live there, that will mean that we run the risk of people being trapped, or maybe having [a] decline in their home equity or their valuation of their homes because they become less desirable," he said.

'Can't afford to surrender'

Andy Yan, the urban planner and Simon Fraser University professor who rang the alarm about vacant condos and the impact of foreign buyers in Vancouver, said this phenomenon could further inflate housing prices in Canada.

In 2014, he proposed that Vancouver, the least affordable market in North America, was attractive to wealthy foreign buyers not because of its job market or cultural cachet, but because of its stability.

The same thing could happen in Canadian cities that are relatively safe from the worst effects of climate change, Yan said in an interview. And then there are the regions that will become unsafe.

Deailed data is not yet available on which neighbourhoods or towns in Canada will be hardest hit by climate change. But the latest report from the United Nations Intergovernmental Panel on Climate Change provides some clues about which areas of the country will be most affected.

Canada's Arctic, which is warming at twice the rate of the rest of the world, will see a longer fire season, the report said. There will be more severe heat waves across North America, which create more severe fire conditions. People who live in cities will feel the impact of higher temperatures acutely because they will be exacerbated by air pollution and smoke from fires.

Coastal communities are expected to see severe flooding throughout the rest of the century. But Ontario and parts of Quebec are also very likely to experience more rainfall as well as extreme precipitation, causing floods even in places that don't normally flood.

Andy Yan, an urban planner and director of Simon Fraser University's City Program, says house prices could rise in parts of Canada considered relatively safe from the effects of climate change. (Harman/CBC News)

"What we found out with [Hurricane] Katrina was, the first people to move were those who can afford it. And then those who couldn't were stuck there," Yan said, referring to the 2005 hurricane.

He said Canadians need to start demanding "political courage" from all levels of elected leadership to mitigate the impact of climate change on housing and infrastructure and more policies like taxes on foreign buyers and empty homes.

"We just can't afford to surrender," he said.

'No safe place'

Annie Preston, the head of data at Climate Check, said she was struck by how widespread the impact of climate change will be. She said everyone's instinct is to say that the place they live in won't be affected.

"Especially looking at the heat risks that we calculate, like everywhere is so subject to really significant increases in heat, which is actually the deadliest hazard so far," she said in an interview with CBC.

"It just drives home how there's no safe place. I mean, that sounds dark but I think it's a positive thing too, helping people understand that we're interconnected and there's not necessarily [any] escaping from this. There's only working forward together."

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