October 18, 2021Realtors must adapt to climate change era
Buyers and sellers will need much more fact-based guidance
As featured in the Toronto Star
16 Oct 2021
GAVIN SWARTZMAN CONTRIBUTOR
Gavin Swartzman is the CEO of Peerage Realty Partners.
The climate issue is even more urgent given the national housing supply crisis and the push to further expand cities and build more and more homes, contributor Gavin Swartzman writes.
At the end of October, the 26th annual United Nations Climate Change Conference will convene in Glasgow to discuss the complex challenges posed by rising CO2 emissions, global warming and the pressing need to find a sustainable way forward.
Canadians should pay close attention to the outcome of this event and what it signifies for the future of their largest and most personal investment: a home.
Whether or not the emission reduction targets set at the upcoming conference are met, the changing global climate will eventually affect where and how people will live in Canada.
Wildfires, floods, hurricanes and intense storms have already shifted once-theoretical discussions of mitigation to a more pressing practical agenda.
The climate issue is even more urgent given the national hous- ing supply crisis and the push to further expand cities and build more and more homes.
As these factors begin to directly impact homeowners, their expectations of realtors — and their reliance on the considerable advice realtors provide — will also change.
Buyers and sellers alike will need a much greater degree of fact-based guidance to identify the increasingly diverse resources required to make a very long-term financial decision.
Given their role on the front lines of the real estate sector, Canadian realtors should consider preparing now for an enhanced role in the sale and purchase of residential properties.
As with insurance, home inspection, renovations, mortgages and a host of other essential homeowner information, a big part of a realtor’s role is to provide clients with reliable fact-based resources, bolstered by their professional experience.
Those who aspire to be “trusted advisers” in the age of climate change, however, will have to first confront the challenge of educating themselves on a topic that is fraught with partisan agendas, pseudo-science and untruths.
At the outset, this may require the real estate industry to pull together, helping homebuyers determine which climate change information and resources are most trustworthy and relevant. That also means developing some basic standards on packaging and sharing that guidance with clients in new and easily accessible ways, such as apps and data hubs.
The consistent focus of every such initiative must be ensuring that home buyers and sellers understand the many ways that climate change can affect everything from the location of a house to the structural options for fire or flood mitigation to the rising costs of home insurance.
There is growing evidence of just how significant a consideration that can be: The average annual cost of claims for property damage or losses due to severe weather has quadrupled in Canada over the past decade to about $2 billion a year.
This has not gone unnoticed by the global reinsurance companies that underwrite these policies for insurers. They have already started to revise rates based on the risk profile of Canadian homeowners, something that will be directly reflected in future coverage rates. This will impact the cost of owning a home and the free cash flow available for its financing.
The crucial first steps forward will require a high degree of collaboration among diverse stakeholders, including the realtor community. In a limited way, this has already begun; realtors are starting to gain access to some of the information that homebuyers need to weigh carefully when choosing where to live.
After the devastating 2013 floods in Calgary, for example, the city began working with the Calgary Real Estate Board to provide flood mapping data to realtors. The 2017 floods in the Petite-Nation River region of Quebec led to the development of tools to track flood risk management. The Insurance Bureau of Canada has partnered with the Federation of Canadian Municipalities on reports that quantify the cost of climate change mitigation at the municipal level — something that affects property taxes over the long term.
The intersection of realtors and climate science is already underway in the U.S. Some brokerage firms have partnered with resources such as ClimateCheck, an app that provides their clients with detailed climate risk information on any U.S. address. (It is reportedly coming to Canada in the future.) Another online tool, FloodFactor, provides flood risk assessments for any U.S. address.
While high-level government conferences work toward framing big-picture climate change policies, private sector and individual collaboration has a crucial role to play on the ground. In dealing with the daily lives and fortunes of Canadians, realtors should develop and leverage new ways to help homeowners find their way forward in a rapidly changing environment.
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Peerage Realty Partners is a subsidiary of Peerage Capital Group.