Wildfires are big news. Last July in Jasper, the country watched in horror as a wildfire consumed one-third of the town’s structures, forced the evacuation of 25,000 residents, and resulted in the death of one firefighter and insurance claims of $880-million.
Now we’re watching again as fires consume huge swaths of land in Los Angeles. The final numbers from this disaster are still being counted, but as of Jan. 17, 27 are confirmed dead, 200,000 were forced to evacuate and some 12,400 structures were destroyed or damaged. At this point, there are only vague estimates of monetary damage.
The housing impact of natural disasters
In terms of housing, everyone whose homes were damaged or destroyed needs a place to live. Imagine a disaster of that scale impacting the heavily populated areas of Canada. In the midst of our existing housing crisis, how could we possibly cope with tens of thousands of people who suddenly need to be housed?
And don’t think, “It can’t happen here.” This subject impacts homeowners across the country and will only become a bigger part of Realtor practice in the years to come.
For one, the similarities between the geography of L.A. and the Lower Mainland can’t be lost on anyone. Los Angeles suffered the driest nine-month period on record prior to the start of the wildfires. B.C.’s own “heat dome” is still a recent memory for residents here.
While we don’t typically have katabatic winds like the Santa Ana, our region nonetheless experiences regular outflow winds from powerful high-pressure events in the B.C. Interior.
Climate change and the escalating risks
No, climate change alone didn’t “cause” the Jasper or L.A. fires. But environmental conditions and years of willful ignorance of preventative measures have made the impact of these fires far worse than the case a few decades ago.
And while the financial impact will be immense, confirmed by the total insurance claims, the human cost—deaths, displacement, lost memories, destroyed family heirlooms—will likely leave the deepest scars.
The future of real estate in high-risk areas
What does this mean for real estate in Canada and particularly those of us in BC? We have wildfires—seemingly worsening every year. We have floods—in some cases catastrophic. We will have sea level rise—the slowest moving but most relentless form of climate change.
Ironically, some of the most-valued properties in B.C.—riverfront, lakeside, oceanfront, or surrounded by forest—are the ones most imperilled by climate change hazards. These properties are facing increased scrutiny from the insurance industry with rising annual premiums and refusals to renew policies in the highest-risk regions.
Without insurance, financial institutions will not grant mortgages, and only those with cash-only deals will be able to purchase. But the biggest question is this: Who would be willing to invest that much equity on a property they can’t insure?
The rising cost of insurance and affordability
Even if insurance is attainable for homes in higher-risk locations, it will be at an extremely high cost, which also impacts the property’s affordability. This insurance could also come with caveats. Will insurers provide coverage only if some amount of risk mitigation (such as flood protection levees, separation from the forest interface, and fireproof roofing/cladding materials) is undertaken?
Then there is the element of homeowner protection. Which purchasers will be willing to put their families at risk of poor air quality (wildfire smoke) or emergency evacuation due to flood or fire warnings? Inevitably, as consumer awareness of property-specific risks increases, their willingness to pay top dollar for properties previously considered “highly desirable” is likely to decline.
The role of Realtors
From a regulatory standpoint, governments will inevitably require higher disclosure requirements so that prospective home buyers are fully informed of potential climate change-induced hazards. It will be incumbent on Realtors to provide the information necessary to ensure buyers make an informed decision, fully understanding the potential risks.
While nobody is expecting Realtors to become overnight subject-matter experts, knowing which areas are subject to seasonal or overland flooding, or at highest risk from wildfires, will be important knowledge to pass on to clients.
The days of ignoring the realities because we can’t readily see the impacts of climate change are gone. You can ask the residents of Jasper and L.A. what they think.
In his role as Advocacy Projects Manager with the BC Real Estate Association (BCREA), Mark Sakai works with internal and external stakeholders to ensure BCREA effectively advocates for thoughtful, balanced, and evidence-based housing policy. Before joining BCREA, he served as Director of Government Relations with the Homebuilders Association Vancouver (previously known as the Greater Vancouver Homebuilders’ Association). Mark loves golf, but the feeling is not mutual.
disagree
respectfully disagree
Authorities should take a closer look at removing homeless encampments from forested areas. That will prevent many “wildfires”.
Also keep a close eye on unstable individuals who display symptoms of pyromania.
OMG LOL I used to believe this fear-mongering too. We have so many real problems.
“Climate change” is just to distract us and make us poorer.
Climate change is not responsible for climate change, it’s the biggest hoax in the world perpetrated by liberal morons. It’s a lack of forest management, many countries in Europe don’t have huge forest fires because of forest management. The world is in trouble with this belief we can control climate, God controls the climate and no one else and if you use common sense of forest management LA wouldn’t be destroyed or Jasper
Climate change is hoax by woke liberals who have destroyed Canada, governments won’t spend money on Forest management, that’s why Jasper burned and LA, it’s not climate it’s common sense and Forest management. God controls climate not humans but they need to follow common sense, many countries in Europe don’t have huge forest fires because of forest management
Call it what you like, climate change, global warming, it matters not the words used, but the ability for us to recognize and acknowledge that the regions are experiencing extremes in weather. Having bought, and lost a home in a wildfire that destroyed acres and acres of forest – and many other homes I can most certainly say there are real challenges facing the industries – including Real Estate. Insurance could not be obtained on a vehicle and house during a number of weeks, even after the fires had subsided, due to risk of reigniting. The beautiful neighbourhood and properties we had purchased to live in were now all chard, only blackened stumps of trees remained, and there were no-go zones in many of the walking trails, and even permanent closure of mountain parks, that are now no longer safe to enter. Fact is, we are experiencing changes that are causing droughts, water restrictions and fires. No one wants to live in a region that is bleak, or be forced to abandon a lush landscape, but this is becoming a norm in many communities that faced these massive fires. There was not enough infrastructure in place to save the all the homes and some where located on in-accessible hillside communities that just couldn’t be protected due to a lack of equipment. Firefighter heroically held back flames using homeowners garden hoses. The bottom line, no one will want to buy in those areas scared by fire, lacking in beauty. Equally, anyone who was witness to these fires, are less likely to buy a home in areas that are high risk, and lack access to ample water. I’m dismayed that people still are resistant to recognize the climate, our planet, is under a serious and real threat – floods, fires, droughts. If there is a lesson here, perhaps it is each home buyer must now ask about flood risk, drought rules, fire mitigation strategies, and the great Realtor’s out there will have knowledge of these facts, or at a minimum be able to direct their clients to the appropriate website to inform them on the prospective community they hope to buy and call home. When you live under the treat of fire, and the season is long, and sometimes unpredictable, you live with your important documents, and most precious treasures in a go-bag, ready to flee at a moments notice. If you live in a region that has not directly faced these risks, you are lucky, but you have little incentive to educate yourself on how weather, climate and these real changes are impacting the people living in those areas.
Approximately 60% of forest fires are caused by humans. Sometimes it’s ignorance but it’s often arsonists. Unfortunately, some of them are paid by The liberals to create such a climate crisis in order to justify their carbon tax and climate crisis agenda via the WEF. CBDC & climate change lockdowns incoming if they have their way. I wonder how you’ll spin that news.
“The days of ignoring the realities because we can’t readily see the impacts of climate change are gone” is a statement so ironic and out of touch with reality that it’s laughable.
Residential real estate disclosure will begin to mirror the financial disclosures commonplace in equity markets. Buyers, pinched by stringent insurance and lender requirements, will start to demand material information from sellers and agents on construction materials, remediation measures for extreme weather events, and municipal preventative actions before making a purchase decisions. And why wouldn’t we? For most Canadians it’s the biggest financial transaction they will make in their lives. Shouldn’t they apply as much care as an institutional investor when in taking on real estate risk. You can deny climate change all you want, but the financial realities are, as Mark rightly concludes, undeniable.
Thank you for writing this. I read nothing in this events based article that invites proselytizing on if climate change is or is not rapidly increasing, or if human generated activity is or is not to blame. I believe you are correct. Risk management exposure and forecasting by insurance companies is real and is happening. Their decisions on if to insure and what and where to insure will start to impact banks decisions on what they will finance and where they will finance. This can influence the security of a buyers investment and/or their potential resale value. In these two regards at the very least, aside from quality of life issues, I see due diligence fiduciary duty on the near horizon and in some locales believe it has already arrived.
Climate change, like all issues, is not a matter of what we believe or what we want to believe, or what we present as facts; rather, it is a matter of what are proven facts. Given the apparent seriousness of the matter to humanity, I dedicated over a year and a half to an intense study of climate and “climate change” to better inform myself; so, what are the proven facts?
Short answer, there is no climate emergency. The long answer is a bit more complicated.
Climate alarmists (unfortunately, that is what they are) focus on atmospheric CO2 as a greenhouse gas. This is too complicated to go into in great detail but here are a few undeniable facts. CO2 has risen rapidly during the course of the industrial revolution and, while not certain, it is highly probably it is our emissions that have contributed significantly. We are somewhere near 450 ppm atmospheric CO2, though the earth has been much higher more than one in prehistoric times and life thrived. Ever see the images of huge trees and lush vegetation during dinosaur ages? Turns out CO2 is plant food and earth needs it to survive. We dropped close to the point where all life ceases (around 135 ppm) recently but that is never mentioned.
We are in a peak interglacial period where CO2 and temperature naturally rises quickly and so to speak of “record” temperatures during a peak interglacial is meaningless, especially record temperatures in the last 200 years. Earth has most certainly been warmer many times in the past billions of years and will be again.
Climate is an extremely complex system with inputs and outputs so complex that the best climate models have been and still are useless when extrapolated out into “what if” scenarios. They all tend to create feedback loops; scientists keep modifying the models but it will always be guesswork as to what will happen.
Long term hurricane, storm and forest fire data collected by USFS, CFS, NOAA, etc, show NO statistically significant trend of increasing frequency or intensity. In fact, forest fire damage has decreased significantly over the last 100 years due to proper management. Unfortunately, Jasper, Hawaii and California were not properly forest managed.
Regarding insurance, the damages are not increasing, rather more people are building in known hazard areas (like New Orleans) knowing the risks and the expanding bullseye effect (plus inflation) is causing increased damage; the storms are not.
News media reports are not data. Stories of your friend losing her home is not data. Wondering why more people don’t see the threat because you see it is not data. Only data is data.
Should we mitigate our footprint on the environment? Of course. Why wait to find out what will happen? Why rely on hope? Funny thing is, western nations are reducing their footprint. Carbon emissions have diminished steadily over 20 years in western nations. We are doing our part. Let’s continue to do it reasonably, responsibly and rationally. Demanding everyone else live in a hut and ride a bike (I’m exaggerating for effect) because I want to is not reasonable, responsible or rational.