The near future will include increased flood protection insurance costs, increased sewer utility charges and increased on-site water management requirements. The increased frequency and scale of flood risk has moved beyond a centrally managed sewer capacity remedy. Municipal investment in centralized flood remedies will be recouped through storm water utility fees. Property owners will be mandated or rewarded for investing in flood protection such as rain gardens, permeable paving and smart rain harvesting.
Businesses with large impermeable areas such as roofs and parking lots are already seeing increased requirements for onsite water retention. Examples include permeable paving, bio-swales, rain gardens, green roofs and integrated green infrastructure.
Homeowners are seeing restrictions on hardscaping, mandatory downspout disconnection and a push for landscaping that includes storm water management. Consider this the new normal. These flood mitigation measures reduce individual property flood risk and shared community flood risk. Municipalities spend more energy dollars on water distribution and treatment than any other energy need. Toronto uses more electricity for water than it does for operating the TTC. The level of efficiency of the system matters, because our tax dollars are paying for it.
The investments and best practices that municipalities are choosing need to be reliable, measurable and effective. The close connection between insurability, flood protection and property impacts are important to the real estate industry, says Tim Syrianos, president of the Toronto Real Estate Board (TREB).
“It seems like Toronto is receiving Vancouver’s weather and vice versa. These are times when changing weather systems are affecting housing. It is incumbent on TREB members to understand municipal flood protection programs such as downspout disconnection, and to be knowledgeable about flood-prone areas in their market,” he says.
Following significant property damage and flooding of the Bow River in Calgary, the Calgary Real Estate Board (CREB) set out to help members and homeowners use flood data within the context of property transactions. CREB worked with the municipality to integrate flood maps with the Calgary MLS to create an understandable visual tool for members.
Shane Griffin, CREB’s spokesperson for the project says, “We designed the tool to be visually usable, so listing agents can market a property with disclosure, and buyers can see relevant information such as walk score, along with flood mapping to make a buying decision.”
Increasingly, municipalities will be measured by their effectiveness at managing flood (and drought) risk. Water management expert Kevin Mercer of RainGrid says the efficiency of municipalities to manage the mounting impacts on flood management infrastructure will be revealed in public and private property damage, insurability and economic recovery.
“The cities that will achieve flood and drought climate resilience, as well as fiscal sustainability in the face of unrelenting climate change challenges, are going to be those that transform their water, wastewater and storm water services into intelligent distributed infrastructure networks of real-time rain harvesting and reuse. Intelligent distributed infrastructure also disrupts the traditional public versus private delineation of public services by extending the availability of reliable, measurable and effective systems right into residential properties where the rain falls and the demand for water originates.”
Rain is the climate change that hits the ground. Flood and drought are two sides of the same coin. Rain affects property values and insurability related to crop yields. It’s not only the cities that are concerned with hydrology. Drought is also connected to increased forest fire risk and other lifestyle inconveniences. The Fort McMurray fire is an example of the impacts of drought on real estate.
Property value is inexorably tied to the precipitation cycle. Whether we are talking about how much snow is on the ski hill, how frequently there is water in the basement or how full the ripe grapes are in the vineyard, property value is affected by water. The real estate industry must choose how we communicate the value, vulnerability, risk and opportunity that climate change brings to our industry.
Chris Chopik is an influential housing industry innovator and a respected authority working at the intersection of housing, energy, resiliency and natural hazards. Chopik’s work includes an extensive exploration of the future of “Property Value in an Era of Climate Change” (2019) where he examines the financial impact of natural hazards on property values across North America. He holds a Master of Design, Strategic Foresight and Innovation from OCAD University.
