So folks don't have to rely upon my anecdotal comments, since folks prefer to just look right through whatever point I try to make:
Link to Report by Grosvenor, Institutional Bastion of Liberal Group Think
Real estate investors often worry that their portfolios might be pummeled by economic factors such as rising interest rates. But there are plenty of other concerns—rising sea levels, earthquakes, overpopulation, social inequity, pollution, crime, and poorly functioning government. Globalization,
climate change, and aging populations are creating dramatic changes at the country, city, and neighborhood level. These changes, in turn, are likely to have a profound impact on the built environment.
Related: Resilient Cities Research Report
The traditional methods of assessing real estate investment risk—such as standard deviation of returns, projected vacancy rate, and forecast rental growth—fall short in a world in which the basic patterns of the last two centuries are undergoing drastic transformation.
Global property group Grosvenor has long realized that its future success is tied to the sustainable growth of the cities where it has a presence. The company, like other long-term global investors, has a vested interest in helping create and manage vibrant, viable cities. At the same time, the firm and its investors seek to preserve real estate capital values and generate sustainable rental income.
In order to better plan and manage its global portfolio, Grosvenor undertook a three-year study, titled Resilient Cities, seeking new ways of measuring cities’ long-term resilience and identifying the world’s most resilient cities. “Resilience” is defined as the ability of cities to continue to function as centers of production, human habitation, and cultural development despite the challenges posed by climate change, population growth, declining resource supply, and other paradigm shifts.
The study examined and ranked 50 of the world’s most important cities. Although these cities account for only 7 percent of the world’s population, they represent the major focus of most global real estate investment and consume the lion’s share of the world’s resources. Thus, the fact that so many struggle to meet basic levels of resilience indicates how unprepared the rest of the world is to face the next century’s major challenges.
In the context of this study, vulnerability is not the same as susceptibility. Some societies are better prepared for adverse events and are more adept at bouncing back: witness New York City’s rapid recovery from the impacts of 9/11 and, more recently, Hurricane Sandy. At the opposite end of the spectrum is the devastation wrought in the Philippines by Typhoon Haiyan this past November.
To recognize this ability, the study weighs “adaptive capacity” equally with vulnerability in order to assess overall resilience. A city’s resilience is a negative function of its vulnerability and a positive function of its adaptive capacity. The results can be counterintuitive. For example, investors tend to shun cities with high taxes and regulatory burdens; however, cities that invest tax revenue in public infrastructure, planning systems, and support for employment growth can increase their resilience significantly, thus improving long-term investment prospects.
