Fortifying Real Estate Against Climate Risk? Don’t Expect an Insurance Discount

• The cost of resiliency: Hardening buildings against weather related disasters helps prevent damage, so why aren't insurers offering better rates?

• Listing wars: Celebrity broker Mauricio Umansky is suing NAR over MLS rules, joining a wave of lawsuits that could reshape how homes are listed.

• Green tape: California just rewrote its environmental playbook to fast-track urban housing—sparking debate over what gets built and what gets protected.

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Insurance

Fortifying Real Estate Against Climate Risk? Don’t Expect an Insurance Discount

The real estate industry is under growing pressure from extreme weather events—from floods and hurricanes to wildfires and heat waves—that caused $182 billion in damage in 2024 alone. In response, developers are investing in resilience upgrades like elevating mechanical systems and insulating pipes. But without clear financial signals, such as lower insurance premiums, many struggle to justify the cost. A lack of standardized systems to verify upgrades and convert them into measurable savings remains a major barrier.

Calculating returns on these investments is difficult. Developers must guess both the likelihood and severity of disasters—an uncertain science—making cost-benefit analysis challenging. While insurers have advanced models, they rarely take on the added burden of verifying building upgrades. Developers like Greystar’s Ryan Souls Senior argue that meaningful insurance incentives won’t happen until third-party certification systems are widely adopted. Some insurers offer limited discounts, such as for buildings built above flood elevation, but these incentives are inconsistent and rare.

Lasting climate resilience takes more than individual building fixes—it requires citywide planning. Houston’s $2.5 billion post-Harvey flood program shows both the scale and difficulty of this approach. Though some funds have been allocated, rising costs are slowing progress. The takeaway: building upgrades help, but real protection comes when cities integrate resilience into zoning, infrastructure, and community planning. Only then can property owners avoid bearing all the risk and cost alone.

Overheard

California Ends Most Environmental Reviews for Urban Housing Projects

California has enacted a significant overhaul of its landmark environmental law, the California Environmental Quality Act (CEQA), in a bid to address the state's severe housing crisis. Governor Gavin Newsom signed legislation that exempts most urban housing projects from CEQA review, aiming to expedite development in areas with existing infrastructure. This move has garnered support from developers and housing advocates who argue that the law's stringent requirements have long hindered the construction of much-needed housing in the state.

The decision has sparked a contentious debate among environmental groups, labor unions, and tribal leaders, who express concerns over the potential loss of environmental protections and community input. Critics argue that bypassing CEQA could lead to unchecked development, threatening ecosystems and disregarding the voices of affected communities. Proponents counter that the reform is necessary to alleviate California's housing shortage and to ensure that development occurs in areas equipped to handle growth.

This legislative shift in California may influence other states grappling with similar housing shortages and environmental concerns. States like Oregon and Washington, which have also faced challenges balancing environmental regulations with housing development, could look to California's approach as a model. However, the move also invites scrutiny from states with more conservative environmental policies, potentially leading to a reevaluation of how environmental laws intersect with housing development nationwide.

NAR’s Listing Policies Under Siege Again in Celebrity Broker Lawsuit

The National Association of Realtors (NAR) is facing a new antitrust battle, this time over who controls access to coveted real estate listings. Mauricio Umansky, celebrity broker and founder of The Agency, refiled a lawsuit against NAR early Tuesday, arguing that its policies stifle competition and hinder innovation.

Umansky’s company, Pocket Listing Service, specializes in private or "whisper" listings, which are popular among celebrities and high-net-worth individuals. His company created a private database of these listings in Los Angeles. NAR’s controversial “clear cooperation” policy requires agents to publicly list homes on multiple listing services within 24 hours of marketing them, or risk penalties, which Umansky says has damaged his business and off-market database.

After a pause last year during NAR’s $418 million commission-fixing settlement, Umansky refiled his suit a mere thirty minutes after the litigation freeze expired. He claims NAR’s control over MLS feeds amounts to one of the nation’s “longest-standing monopolies,” preventing alternative listing models from thriving.

This legal volley adds to a mounting wave of challenges reshaping how homes are marketed digitally. Compass recently sued Zillow over similar listing exclusivity practices. The outcomes of these cases could redefine how—and where—homes are listed for sale, reshaping the power dynamics of residential real estate nationwide.

Technology

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Propmodo Daily is written and edited by Franco Faraudo with contributions from readers like you and the Propmodo team.

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