Report: Investor interest drives up home values in environmental hazard areas
Roughly 17.3 million single-family homes and condos, valued at $4.9 trillion, currently stand in zip codes facing a high risk of environmental hazards including superfund sites, brownfields, polluters and poor air quality, according to a report from property database company Attom Data Solutions.
More than 8,600 zip codes were analyzed, with the high-risk areas accounting for one-quarter of the total 68.1 million homes and condos included in the survey. Topping the list were Denver, Curtis Bay, MD, Niagara Falls, NY, Hamburg, PA, Tampa, FL and several cities in California.
Areas not vulnerable to the risk factors mentioned tend to experience higher home values and stronger home-price appreciation. However, recent price increases in risk-prone areas suggest a willingness among investors as those markets continue their recovery.
Homebuilders have long assessed the potential effects of hazards — from weather-related damage to the impact of runoff from nearby industrial areas — on project performance and occupant health.
In August, the U.S. Federal Emergency Management Agency recommended that certain federally funded construction projects be built 2 feet above the 100-year floodplain, in response to the damage caused from Hurricane Katrina in 2005 and Hurricane Sandy in 2012.
National Association of Home Builders’ then-Chairman Ed Brady criticized the plan, citing concerns that it could increase costs and prevent new affordable housing projects from being built.
Among the key concerns from builders and developers where environmental hazards are concerned is the initial investment in resiliency. In December, researchers at the Massachusetts Institute of Technology Concrete Sustainability Hub announced that they are developing a tool to work out how much project teams should invest up front to make new and existing structures more resilient.
Where hazardous weather is concerned, the U.S. had an average or below-average year for earthquakes, wildfires, hail, tornadoes and winter storms in 2016, according to CoreLogic. Most of the impact came from Hurricane Matthew in the Southeast U.S. in October.
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