Zillow, the US’s largest real estate listing site, has removed a feature that allowed people to view a property’s exposure to the climate crisis, following complaints from the industry and some homeowners that it was hurting sales.
In September last year, the online real estate marketplace introduced a tool showing the individual risk of wildfire, flood, extreme heat, wind and poor air quality for one million properties it lists, explaining that “climate risks are now a critical factor in home-buying decisions” for many Americans.
But Zillow has now deleted this climate index in the wake of complaints from real estate agents and some homeowners that the rankings appeared arbitrary, could not be challenged and harmed house sales. The complaints included those from the California Regional Multiple Listing Service, which oversees a database of property data that Zillow relies upon.
Zillow said it remains committed to help Americans make informed decisions about properties, with listings now containing outbound links to the website of First Street, the nonprofit climate risk quantifier that had provided the on-site tool to Zillow.
Matthew Eby, founder and chief executive of First Street, said that removing the climate risk information means that many buyers will be “flying blind” in an era when worsening impacts of extreme weather are warping the real estate market in the US.
“The risk doesn’t go away; it just moves from a pre-purchase decision into a post-purchase liability,” Eby said. “Families discover after a flood that they should have purchased flood insurance, or discover after the sale that wildfire insurance is unaffordable or unavailable in their area.
“Access to accurate risk information before a purchase isn’t just helpful; it’s essential to protecting consumers and preventing lifelong financial consequences.”
Eby claimed that the push to delist the First Street ratings from Zillow is linked to a challenging real estate environment, with a lack of affordable housing and repeated climate-driven disasters that are causing insurers to raise premiums or even flee states such as California.
“All of that adds pressure to close sales however possible,” he said. “Climate risk data didn’t suddenly become inconvenient. It became harder to ignore in a stressed market.”
As the US, along with the rest of the world, has heated up due to the burning of fossil fuels, worsening extreme weather events have taken their toll directly upon people’s homes, as well as other infrastructure.
Last year, disasters likely amplified by the climate crisis caused $182bn in damages, one of the highest on record, according to a government database since taken offline by the Trump administration.
As a consequence of these mounting risks, the home insurance required for buyers to obtain a mortgage is becoming scarcer and more expensive across much of the US. These changes are running headlong into an opposing trend whereby more Americans are moving to places like Florida and the south-west, which are being increasingly beset by threats such as ruinous hurricanes and punishing heatwaves.
But assigning climate risks to individual properties has been controversial within the real estate industry, as well as some experts who have questioned whether such judgments can be made at such a granular level.
Warnings of such perils deterred some buyers, especially if the home was particularly costly anyway. Last year, a sprawling Florida mansion was put on sale for $295m, making it the most expensive property in the country and in a place also ranked as one of the most at-risk in the US for flooding. After several cuts to the asking price, the house has been taken off the market.
Jesse Keenan, an author and expert in climate risk management at Tulane University, said many scientists and economists have argued that “proprietary risk models that provide highly uncertain assessments can have the perverse effect of undermining the public’s confidence in climate science.”
“There has been a growing bipartisan recognition that the government should play a more active role in supporting and standardizing risk assessment for properties,” Keenan said. “At the same time, the science is limited in its capacity to assess property-by-property assessments.
“I do not believe that this is a sign that the brokerage industry is trying to hide climate risks,” he added. “Brokerage firms know they cannot stop the transmission of climate risk information because climate impacts are already being felt far and wide in the sector.”
Eby defended First Street’s methods and accuracy, pointing out that the models used are built on peer-reviewed science and validated against real-world outcomes.
“So when claims are made that our models are inaccurate, we ask for evidence,” he said. “To date, all the empirical validation shows our science is working as designed and providing better risk insight than the tools the industry has relied on historically.”