How Climate Is Reshaping Real Estate

In an era defined by climate change, real estate faces a new, urgent challenge: resilience. 

At the 2025 Climate Business and Investment Conference at Columbia Business School, two expert panels explored the intersection of real estate and climate risk. The discussions highlighted how rising temperatures, intensifying storms, and regulatory changes are reshaping the way we build, invest, and live in cities—especially in New York City.

Moderated by Stijn Van Nieuwerburgh, Earle W. Kazis and Benjamin Schore Professor of Real Estate and professor of finance at CBS, the first panel, “NYC Real Estate Challenges in a Changing Climate,” featured Jonathan Rose, president of Jonathan Rose Companies, and Rohit Aggarwala ’00, New York City’s chief climate officer. Together, they described the scale of climate risks facing the city. Rising sea levels threaten New York’s 520 miles of coastline. Heat waves now kill more residents annually than flooding. And massive rainstorms, which were once rare, are now frequent.

Aggarwala emphasized that New York City’s approach to climate resilience is built around three key risks: coastal flooding, extreme heat, and intense rainstorms. Coastal areas face billions of dollars in potential damages, while inland neighbor- hoods must cope with deadly heat waves. In response, the city has implemented ambitious measures like Local Law 97, which mandates energy efficiency improvements in large buildings, and urban cooling initiatives like planting millions of trees.

But even these efforts face challenges. Aggarwala noted that Local Law 97, a piece of climate legislation enacted as part of New York City’s Climate Mobilization Act, which aims to reduce carbon emissions, has been difficult for some lower- income cooperatives to comply with. Without proper guidance, some property owners struggle to meet the requirements, relying on outdated advice from unqualified contractors.

From left: Jonathan Rose, Rohit Aggarwala '00, and moderator Stijn Van Nieuwerburgh, Earle W. Kazis and Benjamin Score Professor of Real Estate

Rose brought a developer’s perspective to the conversation. His company has pioneered resilient, sustainable housing, but he acknowledged that most of the city’s housing stock was built long before sustainability became a priority. Transforming these buildings to meet modern climate standards is a massive undertaking, both financially and technically.

Rose pointed out that the economics of resilience often work against property owners. Energy-efficient technologies can reduce costs over time, but the initial investment is often too high for affordable housing developments. Rose argued for greater public funding and innovative financing models to support widespread resilience upgrades.

The second panel, “Housing Markets and Climate Realities,” shifted focus to how climate risk is impacting housing markets and buyer behavior. Skylar Olsen, chief economist at Zillow, joined Professor Gernot Wagner to discuss how the popular real estate app and website is integrating climate risk data into its property listings, offering buyers detailed information on such factors as flood and heat risk. She noted that homes in high-risk areas are beginning to see slower price growth and longer time on the market.

But Olsen also highlighted the complexity of the problem. While climate risk data can help buyers make informed decisions, it can also create anxiety. Some buyers may avoid at-risk areas entirely, while others may underestimate the risks because they are poorly communicated.

Both panels agreed on a critical point: Information alone is not enough. Cities must invest in resilience, and property owners must be empowered to make informed choices. This will require clear communication, better incentives, and public-private partnerships.

Real estate is more than just buildings. It is a foundation of communities and a critical driver of economic growth. As climate risks intensify, cities like New York must lead in showing how real estate can be both profitable and resilient. And as these experts made clear, achieving that balance will require innovation, investment, and a shared commitment to a sustainable future.

But achieving resilience in real estate is not just about technology or regulation—it’s about changing mindsets. Both Rose and Aggarwala emphasized that resilience must be woven into every decision, from the materials used in construction to the long-term planning of neighborhoods. For developers, that means thinking beyond immediate profits and considering the long-term sustainability of their properties.

Rose, whose company has pioneered sustainable housing for decades, highlighted the importance of adaptive reuse: transforming existing buildings to meet modern efficiency standards rather than tearing them down. This approach not only reduces waste but also preserves the character of neighborhoods.

Aggarwala pointed out that New York City’s resilience strategy also involves engaging residents, particularly in vulnerable communities. Education campaigns, support programs, and clear communication about risks can help residents take proactive measures to protect their homes and health.

Olsen from Zillow echoed this sentiment, noting that transparency is crucial. By providing clear, accessible information about climate risks, Zillow aims to empower buyers to make informed decisions. But she also warned that information without support can create anxiety.

Looking ahead, one critical challenge is funding. Resilience upgrades are expensive, and while large developers may have access to capital, smaller property owners often do not. This is particularly true for low-income cooperatives and individual homeowners. Aggarwala emphasized that the city must create accessible financing solutions, such as low-interest loans or grants, to help these groups comply with new regulations and adapt to a changing climate.

On the technology front, new materials and construction techniques offer promise. Rose highlighted the growing use of cross-laminated timber, which is both sustainable and resilient. He also pointed to advancements in energy-efficient building designs, including passive house standards that drastically reduce energy consumption.

But technology alone is not a solution. As Olsen pointed out, education is essential. Buyers must understand climate risks, and property owners must know how to make their buildings more resilient. Public awareness campaigns and clear, actionable guidance are key to bridging this knowledge gap.

This article was created with the assistance of generative AI and subsequently reviewed and refined by a human editor to ensure accuracy, clarity, and coherence.

Key Takeaways for Business Leaders

1. Proactively upgrade buildings for climate resilience. Use public funding and new financing models.
2. Provide clear, accessible climate risk information to buyers and tenants.
3. Collaborate with public and private sectors to scale resilience solutions.