Within the past year the issue of Climate Change has come to concern me because of the experiences of many persons close to me. First, a close friend of mine lost his house and his business in St Maarten due to the devastating hurricane Irma. Then another close family member decided to temporarily take in a displaced family from Dominica after hurricane Maria. A friend had a major setback to his small business in Santa Cruz after torrential rains and unusual flooding severely damaged his property and equipment. Another friend incurred significant expenses because of flooding in downtown Port of Spain. Then my daughter who lives in London experienced an unusually cold and snowy winter.
Experts are telling us these are the first signs of Climate Change and more is to come. Some dire pronouncements are stating that sea levels could rise 5 feet by the year 2050. If this is true we are facing considerable negative consequences for low lying coastal neighbourhoods such as Westmoorings, downtown Port of Spain and Chaguanas.
As Real Estate professionals this should concern us. Properties in coastal areas, normally higher priced, would now be reconsidered, with home investment moving towards higher ground. Consider what is happening to Miami Beach properties in the aftermath of hurricanes, and St Maarten property prices have plummeted.
The value of vulnerable homes would fall resulting in loss of home owners’ equity. Cost of maintenance and repairs would rise. We are already experiencing a tightening of property insurance rates.
When we consider that most properties are part of 30 year mortgages, if costs of maintenance and repairs rise when coupled with lower home values, we may witness an increase in mortgage default, negatively impacting the financial sector.
The Central Government has to also consider climate change when making long and short term planning decisions and budgets have to formulated to reflect this. Already we have had increases in expenditure due to flooding in Central and South Trinidad, increases in landslides, more frequent clearing of waterways, and providing relief to those adversely affected.
So what can we as Real Estate professionals do to ameliorate some of these risks? First, Real Estate Developers should build to be resistant, while shifting to higher ground. Home owners must start planning for higher maintenance and repairs costs, while investing in home protection measures. New home owners should consider climate change when choosing where to invest for the long term.
Real Estate professionals should start considering climate change and advise buyers and sellers accordingly. We must be in the forefront in agitating for proper Town and Country Planning decisions and funding for City Councils and Regional Corporations to clear water ways in anticipation of more numerous water surges.
Climate Change is upon us, as the wise bridegrooms, we must prepare ourselves for the greater risks.