Scorched: Extreme Heat and Real Estate
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SCORCHED Extreme Heat and Real Estate SCORCHED Extreme Heat and Real Estate AUTHORS ULI PROGRAM STAFF ULI PROJECT STAFF Katharine Burgess Billy Grayson James A. Mulligan Vice President, Urban Resilience Executive Director, Center for Senior Editor Urban Land Institute Sustainability and Economic Performance Laura Glassman, Publications Elizabeth Foster Professionals LLC Senior Associate, Urban Resilience Rachel MacCleery Manuscript Editor Urban Land Institute Senior Vice President Content Brandon Weil Art Director Bridget Stesney ULI MEMBER REVIEWERS Senior Director Thomas Cameron Building Healthy Places Designer Janice Barnes, PhD Principal and Director of Resilience Matt Norris Craig Chapman Waggonner & Ball Senior Manager Senior Director Building Healthy Places Publishing Operations Ladd Keith, PhD Planning Lecturer and Chair of the Leah Sheppard Sustainable Built Environment Program Senior Associate University of Arizona Urban Resilience Kate Donatelli Intern Urban Resilience Megan (French) Palathra Intern Urban Resilience COVER PHOTO: Los Angeles downtown cityscape at sunset. (Shutterstock) © 2019 by the Urban Land Institute 2001 L Street, NW | Suite 200 | Washington, DC 20036-4948 All rights reserved. Reproduction or use of the whole or any part of the contents without written permission of the copyright holder is prohibited. Recommended bibliographic listing: Burgess, Katharine, and Elizabeth Foster. Scorched: Extreme Heat and Real Estate. Washington, DC: Urban Land Institute, 2019. ISBN: 978-0-87420-431-5 ABOUT THE URBAN LAND INSTITUTE The Urban Land Institute is a global, member-driven organization comprising more than 44,000 real estate and urban development professionals dedicated to advancing the Institute’s mission of providing leadership in the responsible use of land and in creating and sustaining thriving communities worldwide. ULI’s interdisciplinary membership represents all aspects of the industry, including developers, property owners, investors, architects, urban planners, public officials, real estate brokers, appraisers, attorneys, engineers, financiers, and academics. Established in 1936, the Institute has a presence in the Americas, Europe, and the Asia Pacific region, with members in 80 countries. More information is available at uli.org. Follow ULI on Twitter, Facebook, LinkedIn, and Instagram. CONTRIBUTORS ULI is grateful to The JPB Foundation for its support of this project and ULI’s Urban Resilience Program. ULI also appreciates and is honored by the volunteer contributions to this report of more than 50 subject matter experts from ULI’s membership and beyond. RESEARCH PROCESS To better understand how heat could impact real estate and land use, ULI’s Urban Resilience program interviewed more than 50 real estate developers, designers, land use policymakers, and climate scientists. A full list of the organizations of those who shared their knowledge and perspectives in interviews, nominated case studies, and provided supporting materials for this report is provided in the Acknowledgments. SHUTTERSTOCK CONTENTS 2 Executive Summary 6 16 44 PART I PART II PART III THE SCIENCE IMPLICATIONS AND THE EXTREME HEAT AND IMPACTS OPPORTUNITIES FOR THE POLICY LANDSCAPE REAL ESTATE SECTOR 8 47 The Science of 19 Potential Extreme Heat The Emerging Innovations Business Case for in Heat Policy Addressing 12 Extreme Heat The Impacts of 51 Extreme Heat Case Studies: 22 Policy Regional Market Impacts 24 Mitigation 60 and Adaptation Conclusion: Strategies Building for a Warmer Future 33 62 Case Studies: Acknowledgments Real Estate Development 63 Notes PLAZA COMPANIES PLAZA COMPANIES An iconic 125-foot-tall shade sail at SkySong, the Arizona State University Innovation Center, anchors the 42-acre development and is part of a heat-conscious design that helps attract tenants and reflects the founding partners’ forward-thinking, entrepreneurial vision. EXECUTIVE SUMMARY Heat is the Soaring temperatures and dangerous Extreme heat also has the potential for heat waves are the uncomfortable reality long-term impacts on local economies and number-one in communities across the United States. consumer market preferences. natural disaster Extreme heat risks are not limited to killer in this historically hot environments or summer In response, U.S. real estate developers, months; heat is the most widespread and designers, and policymakers increasingly country. deadly weather-related hazard in the acknowledge the consequences of extreme 1 DANIEL HOMSEY United States. With the projected impacts heat and are seeking solutions to make Director of Neighborhood of climate change and continued urban buildings, neighborhoods, parks, and outdoor Resilience, City and County of San Francisco development, many communities are likely spaces more adaptable to environmental to experience higher-temperature days; conditions and comfortable for occupants. longer, more frequent heat waves; and Although managing extreme heat has no intensified impacts in cities where “urban one-size-fits-all approach, particularly given heat islands” (UHIs) form because of the different humidity levels and other local heat-absorbing properties of urban surfaces. conditions, a suite of potential options is available, many of which also build amenity Urban areas are the most at-risk locations value and address other environmental from extreme heat in the United States. needs such as stormwater management. This heat has the potential for devastating Broadly, developments can prevent the public health consequences—as seen in absorption of heat with light-colored surfaces the Chicago Heat Wave of 1995, the European and materials, provide direct cooling with heat wave of 2003, and more recently, increased shade from built and natural shade the near global summer heat wave of 2018. canopies, and better cope with extremes 2 SCORCHED: EXTREME HEAT AND REAL ESTATE through “heat-aware” building envelopes adaptation at the building and neighborhood Heat, especially and heating, ventilation, and air conditioning scales. Although designing for extreme (HVAC) choices that stabilize indoor heat is an emerging issue that is not yet in our market temperatures even during power outages. mainstream in many U.S. markets, it is during the hot likely to become more prevalent as extreme and humid Policymakers are considering how to address heat increases and is acknowledged by extreme heat in land use and building both consumers and local regulators and months, is top regulations as well as through social services as economic, infrastructural, and public of mind. and emergency preparedness. Urban greening health impacts make the risks of extreme programs and community resources to heat more visible. BRYAN MOLL Executive Vice President of protect the most affected demographics are Development, JBG Smith well-established approaches. New programs This report explores how extreme heat is and technologies are seeking to better emerging as a growing risk factor and understand and apply the nuances of urban planning consideration across the United heat dynamics to planning policies that States and why this trend is likely to can improve climate resilience through continue. The report also explores how the extreme heat mitigation and adaptation. land use, design, and real estate sectors are responding with design approaches, The built environment is ultimately both technologies, and new policies to mitigate a contributor to and a solution for extreme the infrastructure impacts of extreme heat, especially in cities, and presents heat and to protect human health. numerous opportunities for mitigation and PROJECTED SUMMER TEMPERATURE BY 2080–2099 This map displays the average U.S. summer temperatures projected by the end of the century (2080–2099) if climate change continues at a rapid rate (emissions scenario RCP 8.5). (Climate Impact Lab 2019) EXECUTIVE SUMMARY 3 LIAM FREDERICK The exterior of the ENR2 building in Tucson is covered in a “blind” that filters direct sunlight and prevents solar heat gain. This exterior has helped reduce the building’s summertime energy use by 40 percent. Find more details at developingresilience.uli.org. This is a KEY TAKEAWAYS Without intervention, the current and conversation potential future impacts of extremely high More cities in the United States are or will be temperatures—on real estate developments, about the at risk of extreme heat because of climate infrastructure, and the economy—could success of cities change and increased urban development. be substantial. Implications relate to the durability of building materials, energy demand addressing heat. High temperatures are already influential factors in real estate design, construction, and and consumption, outdoor space design, Each and every maintenance in the Southeast, Southwest, consumer location preferences and amenity property has California, and increasingly, in the Northeast; expectations, regulation and taxation, and moreover, the scientific consensus is that practitioners’ insurance costs and professional a role in that temperatures are continuing to increase in liability risks. Many of these implications could success. these locations. Rising temperatures, heat ultimately impact real estate development waves, and urban heat islands are not limited projects’ net present value. RIVES TAYLOR to warm environments. The relative change in Principal and Codirector of Leading developers and designers are Resilience, Gensler temperature causes more damage—to people, infrastructure, and landscapes—in