Climate change and real estate: An introduction to the special issue
本文是《区域科学杂志》特刊导言，介绍五篇关于气候变化对房地产影响的研究，涵盖住宅与商业地产的价格、保险、绿色融资及市场稳定性，适合关注气候风险与房地产的学者和从业者。
Climate change is increasing the frequency and intensity of natural disasters, putting tens of millions of real estate properties at significant physical and financial risk. A recent climate change assessment by the Biden administration estimates that extreme weather events cost the United States approximately $150 billion in direct damages annually (USGCRP, 2023).1 In addition to imposing a substantial welfare cost on property owners, mounting risks could threaten the stability of the property market, financial sector, and macroeconomy itself. At the same time, the real estate and building sector consumes around one-third of the world's energy annually and is responsible for a similar share of greenhouse gas (GHG) emissions. Given its volume, reducing emissions from the sector is central to achieving the pledged net-zero goals of nations. Real estate investors are increasingly putting sustainability at the center of their decision-making processes, given the close association between climate risk and real estate assets, both of which are location-based. In the meantime, more stringent building decarbonization regulations are putting pressure on real estate owners and investors, who must invest heavily to retrofit their buildings or pay “carbon penalties” and see their assets lose value. In recognition of the real estate sector's vulnerability and its contribution to climate change, the MIT Inaugural Climate and Real Estate Symposium was held on the MIT campus on December 4 and 5, 2022. Sponsored by the MIT Center for Real Estate, the conference brought together some of the leading experts on the interface of real estate markets and their reaction and adaptation to climate change. Academic, policy, and industry experts convened to listen to and discuss the leading research in this area. The Journal of Regional Science is pleased to publish this special issue, consisting of five papers from that conference. Edited by Juan Palacios of Maastricht University and MIT (assisted by Siqi Zheng and Ed Coulson), the papers have been vetted through the conference discussions as well as the journal's standard refereeing process. The contributors include some of the leading scholars in the area of sustainable real estate, and the papers represent a broad set of analyses on important issues in this field: Le (2024) sheds light on the dynamics of residential markets following Hurricane Sandy, and factors explaining the price recovery. The estimates show that remodeling expenditures are responsible for the return of prices to pre-storm levels, rather than changes in risk perception. In addition, the author documents an increase in flood insurance take-up rates in affected areas outside of floodplains after the hurricane. On the other hand, the increasing availability of green finance instruments offers a promising set of solutions to transform real estate into a more resilient and environmentally friendly industry. Devine and McCollum (2024) examine the impact of green finance on the propensity to adopt energy efficiency measures using one of the largest green bond programs to date in the United States. The authors highlight substantial challenges for investors when providing green financing. The results of their econometric analysis display substantial variation in the achieved efficiency of the real estate properties financed by the green bond program. In addition, the results suggest that ex-ante estimates of efficiency savings provided to prospective investors seem to be unrelated to the efficiency outcomes, hindering the ability of investors to form expectations about the expected carbon impact of their investments. The remaining three papers in this special issue concern the interface of commercial real estate and climate risks, which is a relatively neglected subject when compared to research on residential real estate. For instance, similar to the aforementioned paper, Holtermans, Niu, et al. (2023) study the impact of climate shocks on the commercial real estate sector, using an event-study approach to examine changes in prices before and after Hurricanes Harvey (Texas) and Sandy (New York). The authors find clear evidence of a decline in transaction prices in hurricane-damaged areas after the hurricanes, relative to unaffected areas. The adjustments in prices are more salient in locations considered at risk by official sources (i.e., outside FEMA floodplains), suggesting a strong link between belief updates and price corrections. This suggests that, unlike property owners in the residential market, affected areas do undergo a change in their risk perceptions in these areas. Two papers in the special issue discuss the impacts of climate change on debt and equity markets. Climate disasters may also disrupt businesses and their ability to repay loans. Holtermans, Kahn, et al. (2023) explore the changes in commercial mortgage payments after Hurricanes Harvey and Sandy. The results show that both hurricanes led to elevated levels of commercial mortgage delinquency. Ling et al. (2023) explore the transmission of climate risk from real estate to listed equity markets. The authors estimate that climate shocks to local property markets are associated with a 0.2–1.4 percentage point decrease in quarterly stock returns for publicly listed United States equity Real Estate Investment Trusts (REITs). The effects are more pronounced in markets with a focus on climate change. Both papers suggests that debt and equity markets can be fragile when it comes to climate risk. This fragility can have spillovers to the broader economy, with serious impacts that might not be easily ameliorated. Collectively, these five papers form a valuable contribution to the study real estate and climate risk. More importantly, it is the hope of the special issue editors that they will stimulate further research into these issues and help the dissemination of research outcomes. This is critical to the cusses of our efforts to address climate challenges by supporting climate actions—both mitigation and adaptation interventions—in the real estate sector, the built environment and the entire economy.