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24 NOVEMBER 2020
By Michael G. McGuinness
Jerseyans during the COVID-19 pandemic (yielded) ... significant short-term emission reductions in the transportation sector” resulting from the “ability of institutions
and businesses to integrate remote work programs while maintaining productivity.” A good start, but New Jersey will not be able to comply with a statutory mandate of an 80 percent reduction in greenhouse gases by 2050 unless we transition 88 percent of all cars, SUVs and light duty trucks to electric or hydrogen power by 2030; electrify 22 percent of all new building stock by 2030 and 90 percent by 2050, while converting existing buildings; and convert our existing power- generating facilities to renewable energy sources. We must travel this tough road to meet these stringent and critical goals.
Real estate investment managers and institutional investors, facing rising insurance and mitigation costs and heightened awareness
of the impact of climate change, increasingly recognize climate
risk as a core issue. While climate migration remains a newer topic, some real estate investors are beginning to consider climate risk at the market or city level as well as the asset level, as explored by the Urban Land Institute and Heitman in “Climate Risk, Real Estate and Market Assessment.”. A growing
number of investors are looking to develop indicators to better assess these risks — such as assessing a city’s resilience strategy, including existing and planned infrastructure and resilience policy — to benchmark these efforts. Analytical tools for measuring market-level vulnerability are still nascent,
but the increased recognition of migration potential may drive further interest, technological innovation and integration into investment processes, according to ULI’s Urban Resilience program. It won’t be long before the insurance industry starts to factor the financial risks from climate change into operations and business strategies.
As reported in “Emerging Trends,” some cities are beginning to position themselves as potentially attractive havens for climate migrants. The 2018 Green Cincinnati Plan predicts that “many businesses seek to ensure continuity of operations and may consider relocating from disaster- prone locations to relatively safe locations like Cincinnati. This will provide economic opportunities, if Cincinnati is prepared to market itself to these businesses.” The mayor of Buffalo, New York, recently declared that city a “climate refuge.”
The importance of the home has skyrocketed in the pandemic, as workers and families were forced
to work and “school” from home. While virtual schooling will likely
be limited and temporary, working from home may be a consumer shift, as new homebuyers will seek quiet, private spaces with good access to technology. We should see increased demand for homes with separate living areas, kitchens and private entrances, as multiple generations share space. The Brookings Institution cites work from home (WFH) as a trend that goes back
a decade, but new home design
is pivoting dramatically toward a more integrated live/work/play/learn balance of indoor and outdoor living solutions. Non-negotiables include improvements in design for health and function, and even accessory dwelling units.
Since not everyone is blessed
with the means to own a home, I wonder if the residential real estate industry will be able to develop products that are more affordable, attainable and accessible to expand the universe of buyers, or choose to continue serving a shrinking
This year’s headlines have been dominated by
the pandemic,
financial crisis,
racial justice
movement and
climate change-
induced natural
disasters that
900,000 Americans in 2019. While
I am no expert, I suggest we get used to this level of turmoil for now, especially given the recent U.S. elections and aftermath.
Amidst this chaos, PwC and the Urban Land Institute released
in October their info-packed annual report, “Emerging Trends
in Real Estate® 2021: US and Canada,” which looks at real estate investment and development trends, finance, capital markets, property sectors and other issues. The timing is strategic, as this
information can help local, state and federal policymakers understand the challenges we must face and
the emerging opportunities we cannot afford to squander. This article focuses on a narrow subset of covered issues and themes: sustainability and climate change; the renewed importance of home; urban migration to the suburbs; social equity; and proptech, or property technology.
New Jersey is a coastal and densely populated state, so minimizing the adverse impacts from rising sea levels, flooding, extreme heat and storms should be our first order
of business toward achieving sustainability amid relentless climate change. The “2020 New Jersey Global Warming Response Act 80x50 Report,” released by the state Department of Environmental Protection in October, finds that the “recent experience of many New

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