Real Estate

Here today. Gone tomorrow. Back someday because of climate change.

Some Mass. residents are decamping for warmer states, but will we have enough housing when they return?

Ally Rzesa/Globe staff; Adobe
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Don’t throw away your welcome mat.

It’s not exactly news that Massachusetts declined in population during the pandemic. Suffolk County, in particular, had one of the biggest out-migrations in the United States last year, according to census data. The state lost 37,497 from its population between 2020 and 2021, and Suffolk — which includes Boston, Chelsea, Revere, and Winthop — had the seventh-largest percentage decline among US counties with more than 20,000 people, the Globe has reported.

. — Ally Rzesa/Globe Staff

Some people headed for northern New England, the Cape and Islands, and the Berkshires amid the newfound freedom of remote work, but like many major northern cities, metro Boston saw residents decamping for the Sun Belt, and not just to retire. (The second most popular out-of-state destination for Massachusetts residents was Florida, according to the Pioneer Institute for Public Policy Research.)

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. — Ally Rzesa/Globe staff; Adobe Stock

But experts are warning regional leaders to plan for when that migration pattern makes a dramatic reversal.

No, this doesn’t mean the tea leaves are pointing to a time when New England will be more affordable than places like Dallas and Nashville. Unfortunately, this “win” for New England would mean certain parts of the country have become uninhabitable.

Climate change will be the big driver of that migratory U-turn, but the region isn’t exactly known for its abundance of housing. There’s already a shortage here, and the region is known for its “NIMBY,” or “not in my backyard,” attitude when it comes to beefing up density or building tall to accommodate more residents.

Changing that is key to accommodating the forecast retreat of millions due to climate change.

“Climate change doesn’t care about our NIMBY-ism,” said Parag Khanna, the founder and CEO of Climate Alpha, an analytics platform that identifies climate oases of the future, and the author of “Move: Where People Are Going for a Better Future.” “You’re going to have to [build more housing] because climate change is that ‘the alien invasion has happened’ moment.”

And New England is a future climate oasis, according to Climate Alpha. (Parts of Russia, as well as Canada, are the top climate oases based on the platform’s analytics of socioeconomic, demographic, and market indicators.)

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None of these regions is immune to climate change. Each has vulnerable coastlines, geopolitical risks and tension, but it’s more a question of which areas will be more habitable.

“We are going to have this great realignment of people, of resources, of borders, and of infrastructure. It is going to happen because we’re human. We’re mammals, and mammals have a fight-or-flight instinct, and people will flee,” Khanna said.

A ‘Minsky moment’

There’s an economic term for this future era of climate-induced migratory patterns. A “Minsky moment” — named for economist Hyman P. Minsky, who studied financial crises — is one in which there is a collapse of property values that accompanies the end of “a prolonged period of prosperity in which investors take on more and more risk until lending exceeds what borrowers can pay off,” according to the Levy Economics Institute at Bard College. The best example in recent history is the housing market collapse during the 2008 financial crisis.

Economists and climate experts have been warning about a climate-related Minskey moment happening across the Sun Belt and other parts of the world for years. A 2016 report in Nature Climate Change warned that rising sea levels could displace 13 million Americans by 2100 — including more than 6 million in Florida.

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“As the Sun Belt suffers from increasing vulnerability, the question is can New England benefit from that?” said Greg Lindsay, Climate Alpha’s chief communications officer and an adviser to cities and real estate firms on demographic trends.

But the region is already home to housing costs well above the national average, a byproduct of not enough supply to meet the demand.

“If climate change vastly changes migration patterns and concentrates people in certain areas, there needs to be substantial infrastructure investment,” said Aaron Jodka, a national director of capital markets research for Colliers International. “If that’s in New England, if that’s in the Great Lakes region, [or] if that’s somewhere else, we have to prepare for that. From a housing standpoint here in New England, that would be a big change for us.”

‘As the Sun Belt suffers from increasing vulnerability, the question is can New England benefit from that?’

Greg Lindsay, Climate Alpha

New England can plan ahead, but this theoretical scenario could be too early a sell for investors. Some even argue the mass migration talk is overblown, as people would probably move to areas closer — and with more housing — to where they were initially displaced.

“New England is predicted by some as being a receiver community,” said Carlos Martín, a project director at the Remodeling Futures Program at the Joint Center for Housing Studies at Harvard. “I’m a little more skeptical of that because I think there are going to be places like Atlanta and Orlando that can continue to receive more population because they’re closer to where people want to be.”

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Financing throws another wrench in New England being able to accommodate climate-related migration. How do you persuade someone to underwrite a deal in which you buy large plots of land to sit on for a few decades until people start showing up? Pension funds that finance real estate deals often want a quicker return than that.

“It’s a fascinating concept and debate and discussion. I just think it’s a little early for investors to potentially capitalize on it,” Jodka said. “If someone owned a bunch of land in some of these areas, it could be a nice position to be in, but I really don’t see pension funds saying: ‘All right. I need to allocate X million dollars into potential development opportunities in these areas.”

Planning for more than protection

The cautionary tale for New England is that it is important to include housing in any climate-resiliency discussion, those interviewed for this story said. Nearly all the measures with respect to climate change in the region are about resiliency and prevention instead of growth.

“It’s very much about protection: How do we mitigate, live with, [and] adjust to climate change?” Jodka said. “It’s not really ‘How are we actually going to capitalize on these shifts?”

Whoever moves into the next strata of climate change conversation still has to be methodical about the process, though.

“You don’t want this kind of reckless climate gentrification overrunning places where you get crowding out and pricing ordinary people out of the market,” Khanna said. “If you just think with a rigorous scientific lens, you should be thinking about the places that would be more resilient [and] pre-designing in the sense of sustainable technology and enlarging the capacity of those geographies to absorb greater populations.”

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