The construction, financing, insuring, and maintenance of all buildings have undergone gradual updates over the last several years due to inexorable climate change. For homeowners, once optional features are now standard in new construction. Retrofitting homes with climate-adaptive features is becoming the norm. Here’s how climate change is affecting homeownership and what you can expect in the future.
The steady ratcheting up of climate extremes
Weather patterns over the last decade are erasing doubts about the reality of climate change. Hurricanes are becoming more intense, wreaking devastation in the southeastern United States. So-called “Tornado Alley,” which once covered the Midwest, has shifted east into states such as Tennessee, Mississippi, and Alabama, where the number and intensity of tornadoes have increased. The southwestern states are enduring a long-term drought, which brings the risk of massive wildfires.
These environmental conditions are forcing changes in the design and construction of all types of buildings. As homeowners, we must adapt to protect our investments.
The impact of climate change on homeownership
Here are the most noticeable upgrades that climate change is imposing on home construction and remodeling:
- The construction of new homes is incorporating features directly related to climate change. Insulation, thermal sheathing, and seam sealing behind the outer facade material are more robust, helping prevent outside temperatures from increasing HVAC costs.
- Retrofitting homes with more climate-control features, both inside and out, is on the rise.
- Local or state codes may require certain structural safeguards, such as “hurricane straps,” to protect the roofs of houses along the Gulf Coast.
- HVAC systems are more efficient than ever, seeking to insulate homeowners from utility rate increases. Heat pumps process air cost-efficiently. Smart-home thermostats ensure the most efficient operation of HVAC equipment.
- Building materials are made from nontoxic and environmentally friendly materials.
- Solar panels, though still expensive, help homeowners save on utility costs.
- Lighting has advanced from incandescent to fluorescent to LED bulbs, reducing electricity use to pennies on the dollar.
Here are the lending and insurance financial effects of climate change:
- Banks and other lenders are applying ESG principles to their lending practices. Environmental, social, and governance standards are used to rate vendors and affect lending guidelines. Lending terms are shaped to encourage “green” building practices. Lenders do climate risk assessments in disaster-prone areas to shape lending policies.
- Houses in high-risk areas, such as the Gulf Coast hurricane zones and California wildfire zones, face a double whammy: higher insurance rates and lower home values as demand for properties in those areas wanes.
- Some insurers have withdrawn from the hardest-hit states. The limited number of insurers means increased rates.
Industry experts advise home shoppers not only to crunch the numbers on the purchase price, but also to assess how environmentally resilient the home’s building materials are and whether it needs retrofitting if it is an existing home. Be sure to obtain detailed quotes from mortgage lenders and insurance companies before committing to purchase, and ensure the numbers fit your budget.
Related – Climate Change is Driving Up The Cost of Your Insurance
