THE REAL ESTATE FINANCE-URBAN CLIMATE RISK NEXUS: A COMPARATIVE ANALYSIS OF MIAMI, ROTTERDAM, AND SINGAPORE

Project Information

REALCLI

Grant agreement ID: 799711

DOI

10.3030/799711

Project closed

EC signature date 21 March 2018

Start date 14 January 2019

End date 13 January 2021

Funded under

• EXCELLENT SCIENCE - Marie Skłodowska-Curie Actions

Total cost

€ 160 800,00

EU contribution

€ 160 800,00

Coordinated by

KATHOLIEKE UNIVERSITEIT LEUVEN
Belgium

Periodic Reporting for period 1 - REALCLI (THE REAL ESTATE FINANCE-URBAN CLIMATE RISK NEXUS: A COMPARATIVE ANALYSIS OF MIAMI, ROTTERDAM, AND SINGAPORE)

Reporting period: 2019-01-14 to 2021-01-13

Summary of the context and overall objectives of the project

The connections between real estate and urban climate risk management represent a critical missing link in urban research, policy-making, and practice. Real estate-finance climate risk management practices have important consequences for the welfare and prosperity of society. Housing markets and other forms of property are central to contemporary political and economic life, and real estate-linked financial markets comprise an increasingly important part of the overall financial system. Climate risks, and their management by financial institutions, may disrupt these important political economic relationships, and could destabilize ‘risky’ urban regions. Increasing disasters and other growing climate risks, and attempts to mitigate their effects, can reshape the vulnerabilities, uses, and users of property. At the same time, government-led climate risk management practices vary greatly within and across urban regions. Historical patterns of urbanization, institutional expertise and financial capacity, patterns of real estate market development and finance, and distinct geophysical processes shape current and future urban climate risk exposures, for example. This creates a complex, uncertain, and high-stakes landscape for financial and urban policy-making and practice.

The emerging interaction of institutions, imperatives, and interests that govern real estate climate risks – both across the global real estate-finance sector and within at-risk cities – may be termed the real estate finance-urban climate risk nexus. This project advances our theoretical and practical understanding of this nexus across real estate-finance institutions (asset managers; real estate investors; re/insurers), and within three ‘risky’ coastal urban regions (South Florida; the Randstad, Netherlands; and Singapore). The aim of the project is to assess current practices associated with real estate-finance climate risk management, and to identify the general and particular challenges and opportunities across these institutional and urban landscapes.

Work performed from the beginning of the project to the end of the period covered by the report and main results achieved so far

The project has entailed interviews with real estate-finance stakeholders across North America, Europe, and Southeast Asia, and with government planners, civil society leaders, and other place-based actors in South Florida, the Randstad, Singapore, and beyond. Stakeholder workshops, participant observation at major industry events, site visits, and other methods have also been deployed to understand this emergent area of practice, as well as challenges and opportunities on the horizon. The project points to needs for more integrated, place-based real estate and infrastructure climate risk governance strategies, and for a stronger focus on social equity within urban climate risk management research and practice.

Initial project results and insights for further research and practice have been published in academic journals, including Environment and Planning A: Economy and Space, and the Cambridge Journal of Regions, Economy and Society, as well as in essay form in the Urban Land Institute’s “Urban Land” magazine. Findings have been presented before practitioner audiences in case study regions, including the American Society of Adaptation Professionals and a multi-stakeholder expert community of practice in the Netherlands. The project has also influenced the development of a free practical resource for city stakeholders, the C40 Cities “Understanding infrastructure interdependencies in cities” report. Podcasts and recorded lectures based on the project are available online.

Progress beyond the state of the art and expected potential impact (including the socio-economic impact and the wider societal implications of the project so far)

The project has advanced the state of the art by bringing the relationships between real estate-finance institution climate risk management practices and urban adaptation planning into a clearer and critical light. The project has also reached a broad international audience of academics, policy-makers, practitioners, and other stakeholders through professional organizations (e.g. C40 Cities), publications, and media coverage (e.g. New York Times). In this way, the project has sought to build our collective societal capacity to understand, assess, and refine real estate-finance climate risk management practice, towards a more equitable and durable urban futures.

Miami waterfront