Catastrophe Planning in Real Estate

As Robert Muir-Wood says in The Cure for Catastrophe: “Natural disasters are in fact human ones: we build in the wrong places and in the wrong way, putting brick buildings in earthquake country, timber ones in fire zones, and coastal cities in the paths of hurricanes.” Global climate change is already amplifying freak weather events, adding tricky considerations to today’s real estate decisions: unprecedented droughts, raging wildfires, and superstorms with their disastrous floods.

How is the smart, responsible homebuyer/homeowner to reduce exposure to such risks? No one would disagree that protecting one’s life, family, and assets is a worthy goal, but planning and preparation don’t come easily to everyone.

Of course, avoiding catastrophe-prone regions altogether is the best insurance you can get. If you can choose to live in a region where disaster risks are low, that’s great. If you cannot, there are still steps you can take to protect yourself: live near the coast but don’t buy right on the water. Research earthquake fault lines, nuclear power plants, flood maps, and other relevant risk factors before purchasing real estate.

The first step is to think through what catastrophes could hit your home—and think about the likelihood of them happening. The big ones are obvious: earthquakes and wildfire in California, hurricanes in the Southeast, ice storms in the upper Midwest. Flooding can happen anywhere, not just coastal areas or regions with high rainfall. The floods in Colorado’s Front Range in 2013—a 1000-year event—cost $1 billion in property damage and killed at least eight people. How do you plan for a 1000-year storm? My advice is: there’s no reason not to at least consider even the long odds. FEMA’s Local Mitigation Planning Handbook (easily searchable online) is an excellent tool for evaluating risk and mitigating hazards before purchase, and it provides guidance on how to work with neighbors and community members after a disaster. The handbook also provides crucial flooding maps that identify 100-year storm areas.

National Oceanic and Atmospheric Agency (NOAA) offers more than three hundred tools “to manage your climate related risks and opportunities, and to help guide you in building resilience to extreme events.” There’s a high “wow” factor with many of these online tools, which cover hurricanes, landslides, earthquakes, flooding, high heat, plagues of locusts, and pretty much any other disaster you can think of.

One curious thing about catastrophe planning is that while none of what I’ve said above is the slightest bit controversial, this type of risk mitigation is still uncommon. I think a portion of the blame lies with the tendency toward a kind of blind faith in authority. We assume that local governments, city planners, developers and architects have thought about these problems and taken steps to protect us. Homebuyers in Houston may only now be realizing that the planning and building department let developers build in flood zones— trading long-term resilience for short-term profits.

Another major factor to evaluate with regard to real estate is a building’s “passive survivability”—how habitable it would be during an extended loss of electricity, external fuel sources, or water. This concept has been integrated effectively in Vermont and other cold regions. Here in earthquake country, we always have a few hundred gallons of water, candles and charged LED flashlights, a couple tanks of propane, and a stock of easy-cook food. We estimate that we could shelter at home for a week easily, and for a month on leaner rations. We have also organized with our neighbors to make sure they have similarly ample supplies.

Catastrophe is like a really big, slow-moving train coming down the track. If you’ve located your home up and out of the way of all the hazards you can, then there’s no time like the present to mitigate those you cannot. Every local and regional building department has copious details on how to protect your home and family. Retrofitting your house to protect against flooding or fire is fairly straightforward, and many improvements can be piggybacked on other upgrades.

Most importantly, in a catastrophe, your community is your best possible resource, so get to know your neighbors. Catastrophe can bring out the best in humanity and pull people together. Reach out to neighbors now to start building your disaster contingency team. Your own forward-thinking actions today may establish you as a hub of resilience in the future.

Christopher Peck

Welcome to my archive of newsletter articles and blog posts. For more information on my service offerings, please go to my advisor webpage.