Receiving Community

Resumen del informe: Climate change is changing conditions in communities worldwide, increasing incentives to live and work in some locations and decreasing incentives in others, causing ripple effects across global, national, and local markets. As people of all demographic groups gravitate toward areas with comparatively lower risk from climate effects (receiving communities), they will spur local economic growth and development. As a result, local governments of these receiving communities and private interests will be challenged to ensure such growth and development is inclusive and equitable and minimizes gentrification-driven displacement.

This report defines climate gentrification and describes its impacts on receiving communities. It communicates the value proposition of equitable, inclusive, and resilient development in these communities and outlines specific strategies to minimize climate gentrification–driven displacement.

Key Takeaways:

• Climate gentrification can occur because of the international, national, regional, and local movement of people, industries, and businesses; it can be unintentional or actively encouraged by localities.
• It is important to monitor and understand how new development might influence gentrification indicators such as rising rents, decline in vacant properties, and rising rates of evictions and foreclosures to mitigate adverse impacts such as displacement.
• Climate gentrification can vary and compound as a result of a wide range of factors including regional climate hazards, household income, race and ethnicity, age, and educational attainment.
• Climate-driven displacement has many causes including ongoing disparity in wealth-building opportunities for vulnerable groups, changing community dynamics, and declining resource accessibility.
• The value proposition for investing in receiving communities includes preventing stunted asset value and avoiding repair and replacement costs.
• There are many time-tested strategies for mitigating adverse impacts and achieving more equitable outcomes in gentrifying communities (see Strategies for Mitigating Climate Gentrification-Driven Displacement below). 

Much work still remains to understand the emerging dynamics of climate migration and climate gentrification; however, local governments and private real estate–sector professionals are particularly well positioned to lay the foundation for communities that serve the needs of all residents. 

The Receiving Community webinar is available here.

About Climate Gentrification

In this report, climate gentrification is discussed as growing real estate investment, spiking prices for housing and other goods, residential displacement, and demographic changes in areas with lesser exposure to climate change risks. Climate gentrification differs from traditional forms of gentrification because neighborhood change results from changes in demand that account for climate risk.

Property owners are starting to make decisions based on climate-risk factors. For instance, a 2022 study by Redfin found that homebuyers who have access to flood-risk information when browsing home listings are more likely to view and make offers on homes with lower flood risk than those who do not have such access. As people resettle in areas with less risk, communities will need to create capacity for new residents and be prepared to reconcile their interests with those of long-term residents. In this process, prioritizing equitable and inclusive development is important.

The threat of displacement in receiving communities looms large, necessitating definition of indicators, understanding of causality, and most important, coordinated action. The report discusses specific contributors to climate gentrification–driven displacement, namely, ongoing disparity in wealth-building opportunities for vulnerable groups, changing community dynamics, and declining resource accessibility.  

Explore the interactive graphic below to learn more about indicators of gentrification and climate gentrification’s potential effects on communities.

The Value Proposition for Investing in Receiving Communities

The imperative for development in low-risk areas can be framed in terms of both the protection of asset value and reduced maintenance costs.

• Avoided value impairment. While climate risk is not consistently factored into property valuation and appraisal processes, acute and chronic climate impacts such as storms and flooding often result in stunted residential property values in areas where they occur. As effects worsen, the risk of stranded assets grows alongside the value of properties in lower-risk areas.
• Avoided repair and replacement costs. Cost of repair and replacement will increase as climate events continue to cause damage. In high-risk areas, this translates into a long tail of economic and health impacts as communities rebuild and recover as well as higher insurance rates. Receiving communities hold appeal because they are comparatively less vulnerable to these costly climate impacts. 

Strategies for Mitigating Displacement from Climate Gentrification

This section of the report proposes six strategies for public officials and private real estate leaders to achieve more equitable development outcomes in communities that are, or are anticipated to be, affected by climate gentrification.

Support for this research was provided by the Robert Wood Johnson Foundation. The views expressed in this publication do not necessarily reflect those of the foundation.