Understanding and Assessing Climate-Induced Population Migration

Climate-induced population migrations have emerged as an important issue in recent years, likely to be exacerbated in the future with the increasing frequency and severity of weather events. This phenomenon has far-reaching implications for various sectors including commercial real estate investors / developers, retailers, and residential mortgage lenders. By recognizing the potential impacts of these migrations, such as changes in demand for housing and retail space, as well as the associated risks to mortgage portfolios, these industries can proactively adapt their strategies to help make informed decisions. We aim to provide real estate and retail leaders with a methodology to help evaluate a region's adaptive capacity to understand community resilience and inform business decisions.

This presentation will begin by examining how climate-induced migrations are already occurring today, highlighting key indicators such as high exposure to physical risks and lack of insurance coverage. Examples will be presented, including the experience of New Orleans after Hurricane Katrina and more recent movement from Phoenix, AZ due to increased heat. These examples aim to illustrate the potential immediate and long-term effects of climate-induced migrations on communities.

We propose a framework for evaluating adaptive capacity and community resilience, in line with the Task Force on Climate-related Financial Disclosures (TCFD). This framework will be applied to areas with varying levels of physical risk exposure and existing climate resilience plans, in order to identify potential future “climate havens”. By understanding the adaptive capacity of a region, real estate investors and developers can identify areas that may be more likely to withstand climate-related challenges and offer long-term growth potential.

Additionally, the presentation will emphasize that investors and developers should understand the long-term physical risk exposure of their investments. By considering the potential impact of climate-induced migrations, such as changes in demand and property value, stakeholders can make strategic business decisions that align with the realities of a changing climate. The presentation will conclude by emphasizing the importance of integrating climate resilience into business strategies and fostering sustainable and resilient communities.

Ultimately, our findings will provide real estate investors, developers, and retailers with valuable insights into the potential impacts of climate-induced population migrations. By understanding the current and future state of migrations, evaluating adaptive capacity, and considering long-term physical risk exposure, stakeholders can make informed decisions that promote community reliance and enable the long-term success of their investments.