Are you in real estate? And have you ever thought of sea level rise as a business opportunity? Probably not. And it must be said, the science on the expected sea level rise is ambiguous.
One minute the IPCC is adjusting its scenario’s to a few centimeter per year, the next minute NASA images are showing a larger ice melt in the polar regions than ever expected.
One thing is sure though, sooner or later, the sea level will rise.
Meanwhile, coastal locations are the most popular locations for people to settle and waterfront development is thriving. The Darwin Convention Center (see image) – an iconic landmark located on the spectacular Darwin Harbour in Australia – is just one of many examples. Within several decades it is expected that 50% of the world population will be living within 100 km of the coast. So a rising sea level could, in the worst case, imply that large areas will be flooded more often or even permanently.
So how is the real estate industry factoring in rising sea levels and the popularity of coastal locations to its development strategy?
Well, it doesn’t. Sea level rise doesn’t really seem to have the attention of the real estate industry.
How is this possible?
First of all, this could be explained by the fact that the real estate industry, like most businesses, is influenced by demand and supply and that the demand for flood proof real estate is not quite high yet.
Besides that, sea level rise seems to be more of a topic on a macro level. It is assumed and expected that national and regional governments are responsible for the protection against the sea and that this is not the task of the project developer. This explains the demand being low, because people feel save, they do not really see the threat of being flooded, let alone feel the urge to flood-proof their property.
Is it possible at all to decrease the threat of the rising sea levels from the perspective of the real estate industry? Or should the protection against the sea remain in the hands of water boards and other governments for building better dikes and higher sea walls and in the hands of urban planners, restricting flood prone areas and implementing better water retention and drainage systems?
A sea of opportunities
To my opinion there is a lot to gain, both for the industry as for the future users of the real estate. The industry can play a much larger role in decreasing the socio-economic impact of flooding and lowering the vulnerability of cities and regions. All that is needed is to look a beyond the familiar boundaries. By considering water as the new land, a sea of opportunities will open, not reclaiming but floating.
The principle is not that new. In the Netherlands, people live on houseboats since the 16th century. The Mayan culture already combined fish farming with floating agriculture, and Asian fishing communities have been living in floating settlements for ages.
What would the benefits be?
So what would be the benefits for adopting floating urbanization into the real estate development portfolio? There are many reasons.
- Investing in a large scale floating development would make you a pioneer. Although being the first is not something the real estate industry is very keen on…
- You can secure your developed and undeveloped property, and therewith also the economic value.
- You have the power and knowledge to develop interesting areas, that were before unattainable or unsafe.
- You are able to offer new high-value waterfront locations in coastal zones and old port areas, often located close to, or within the city centers, without distorting cultural heritage or water retention capacity.
- There are also global benefits. Coastal cities are the fastest growing cities in the world and often urban sprawl competes with arable land and rainforests, whereas space on water is available and really close. This leads to new opportunities for coastal protection. Moreover, seventy percent of the earth is water.
Time to step up
Technically it’s all possible, financially as well and in some regions, like the city of Rotterdam, the policymakers have already started to see the boundless opportunities of floating urbanization.
So now is the time to step up and do it. A hand full of pioneering companies, most of them Netherlands based – where else – have already started.
Image: Darwin Convention Centre
Source image: http://www.darwinconvention.com.au