the need for urban resilience will have a profound impact on real estate development over the next few years.
In its 2020 Forecast released last week, Avison Young stated that the Canadian real estate industry should now seriously consider the environmental implications of any future projects, particularly in islands and in cities situated near coastlines.
“By 2030, according to the UN, unless there is significant investment to make cities more resilient, natural disasters may cost cities worldwide $314 billion annually and climate change could push up to 77 million more city residents into poverty,” Avison Young warned in its analysis.
Among the markets that are most at risk of suffering severe losses in property values include Toronto and Vancouver, according to a prior report by the International Monetary Fund.
“Lower income groups tend to be worst affected by climate change, and least able to recover from the effects,” Avison Young added. “The demand for a response is growing, and cities around the globe are developing urban resilience strategies to ensure economic, social and environmental sustainability.”
The forecast observed that governments at all levels have the power to effect significant changes, with the most impactful being at the municipal level.
“[Cities] need to adopt meaningful regulation to compel more sustainable development, and to champion the use of technology to measure and reduce energy consumption and emissions from buildings.”
Moreover, any potential spin-off industries cannot be underestimated.
“Adopting urban resilience strategies represents a fundamental shift in how we build cities. It will require substantial funding from both the public and private sector, creating significant finance and investment opportunities for private and institutional real estate investors,” Avison Young noted.
“It will also need specialized construction and project management expertise to tackle new technologies, building codes and materials. Existing assets will need to be refurbished and retrofitted to meet updated emissions targets. All this will drive demand for new service offerings; from benchmarking of new technology and construction standards to educating the investment industry on which assets will not only deliver strong returns but contribute to the sustainability and health of our built environment.”