How to Develop a Comprehensive Wildfire Risk Rating for Properties

How to Develop a Comprehensive Wildfire Risk Rating for Properties

The Australian 2019/2020 bushfire season is one of the world’s worst in recent memory. It began in November 2019 in New South Wales and spread across Victoria, Western Australia, South Australia, and the Australian Capital Territory. The extensive fires, fueled by high temperatures and prolonged dry conditions, led to widespread devastation, with a number of lives lost, thousands of homes destroyed or damaged and billions of dollars worth of agricultural damage.

Australia frequently experiences both bushfires and grass fires.

These fires are a natural and integral part of Australia’s environment. Many Australian plants and animals have evolved to not only survive but also benefit from the effects of fire, with some flora depending on fire to assist in its reproduction and growth.

According to Australia State of the Environment 2021, bushfires include all types of fires in the bush – prescribed burns for weed control, cultural burns, fuel reduction burns and wildfires.

Wildfires are bushfires that are out of control, whether they are managed fires that have escaped control or fires that were not deliberately lit.

With the increasing prevalence of bushfires and wildfires globally, assessing the risk they pose to people, properties and infrastructure has become more critical than ever.

Steps to Develop a Wildfire Score Rating

A Wildfire Risk Rating score provides a quantifiable measure of this risk, guiding governments, financial institutions, insurance companies, homeowners, developers and buyers in making informed decisions.

Here we’ll outline a high-level structured approach to developing a comprehensive wildfire risk rating for properties.

1. Defining scoring criteria and scale

Firstly, we establish a scoring scale, typically from 1 (lowest risk) to 5 or 10 (highest risk). It’s important to define clear criteria that contribute to bushfire or wildfire risk, ensuring a comprehensive evaluation.

2. Key factors to consider

Several factors play a pivotal role in determining fire risks:

    • Location and topography

      Proximity to fire-prone areas and the property’s topography can significantly influence risk levels.
      Tools like Archistar have features to determine if your site is in a bushfire-prone zone. With built-in bushfire layers, Archistar can provide accurate and reliable data.

    • Vegetation and landscaping

      The type and maintenance of vegetation around a property are crucial, as some plants are more flammable than others.Australia’s unique geography and climate makes it prone to bushfires. In Australia, hazard reduction burns or prescribed burns are controlled fires undertaken by fire agencies, land managers or by rural landholders to remove vegetation. These are often conducted ahead of the warmer summer months as a means of mitigating the impact of bushfires and reducing fire risks.

      Examples include Forest Fire Management Victoria Reducing Bushfire Risk program and the ACT Government’s Fire Management Policies and Plans aim to reduce the risk of bushfires.

    • Climate and weather patterns

      Weather is a key driver of bushfire ignitions, with a number of factors affecting wildfire activity. Many factors contribute to fire weather, such as a lack of rainfall in the lead-up period, low humidity, strong winds and high temperatures, which all contribute to fire risk on any given day. They can also increase moisture stress on vegetation in the lead-up period.

      Local climate, current and historical weather patterns, including wind conditions and drought frequency, are critical considerations in the development of a Wildfire Risk Rating.

Weather patterns
  • Historical wildfire data

    Historical wildfire data is important because understanding past wildfire occurrences in the area helps predict future risks.
    There is a range of open data sources for historical bushfire data. In Australia, the Australian Government shares a range of bushfire related datasets on data.gov.au and University of NSW shares 100 Years of Bushfire Data.

    This type of data, combined with other data sets conveniently accessible from the one location, the Snowflake Marketplace, can help to develop a fuller picture about historical wildfire in specific areas. For example:

    • Access and infrastructure

      Good access for firefighters and robust utility infrastructure are important for fire response and prevention.

    3. Data collection and analysis

    Gathering relevant data, such as GIS mapping, climate data, and historical fire records, is the next step.

    The Proptech Cloud curates a range of useful datasets available on Snowflake Marketplace to make this process easier.

    Analysing this data allows us to assign a sub-score to each factor based on our scale.

    4. Assigning weights to each factor and calculating the overall score

    Each factor is assigned a weight according to its impact on bushfire risk.

    This step is essential to ensure that more critical factors have a greater influence on the overall score.

    By combining these sub-scores and considering their respective weights, we calculate the property’s overall Wildfire Risk Rating.

    5. Validation and adjustment

    It’s important to validate the scoring system against historical bush and wildfire incidents and expert opinions, adjusting it as necessary for accuracy and reliability.

    6. Regular updates

    As environmental conditions and land use change, it’s important to regularly update the scoring system to maintain its relevance and accuracy.

    The Role of Wildfire Risk Rating

    A well-structured wildfire risk rating is an invaluable tool, helping property stakeholders to understand, assess, and mitigate the risks posed by bushfires. By adopting this methodical approach, we can enhance our preparedness and response to this growing environmental threat.

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    Environmental Risks in Real Estate: Essential Metrics for Assessment

    Environmental Risks in Real Estate: Essential Metrics for Assessment

    Driven by greater awareness and demand, environmental considerations are increasingly at the forefront of property development and investment.

    Environmental factors can significantly impact site selection, regulatory compliance, property values, safety, infrastructure, sustainability, insurance costs, and the overall desirability of real estate.

    To adequately build resilient properties for our future, understanding and assessing environmental risks in real estate is crucial.

    Examining the key metrics and statistics used to measure these risks can also provide valuable insights for property stakeholders who are building climate intelligence as a means of value creation and strategic differentiation in the real estate industry.

    On the other hand, the real estate industry contributes approximately 39% of total global emissions. This highlights how factors as broad as the choice of building materials, construction methods, real estate planning and development can influence and help to mitigate global climate change and environmental risk.

    Environmental assessment metrics provide important intel to stakeholders and businesses in and around the real estate industry. 

    Here we examine the top 16 key metrics used in assessing environmental risk in real estate.

    1. Flood Risk Assessment

    Managing flood risk is an important aspect of adapting to global climate change and flood risk assessments have become an important part of risk management practices. The estimation of risk is somewhat challenging and involves careful consideration of a number of varying factors such as location, historical flood data, and elevation.

    Flood risk is a concern, especially for properties near water bodies.

    Flood

    2. Earthquake Risk Score

    In earthquake-prone areas, earthquake risk score is vital. It evaluates the probability of earthquakes and their potential impact, factoring in seismic activity and building standards.

    Earthquake risk metrics can support stakeholders in developing risk reduction measures such as emergency response plans, building design codes, or insurance-related decisions.

    3. Wildfire Risk Rating

    Properties in or near wilderness areas must consider the risk of wildfires. This rating looks at location, vegetation, and climate conditions. There are a number of data and solutions in the market that help decision makers with deeper location intelligence insights, such as CoreLogic with their climate risk solutions and Precisely with their wildfire risk data.

    Then there are those protech innovators who actively incorporate environmental risks into their solutions, such as Nearmap who’ve recently acquired BetterView, will also be integrating risk ratings for data decisions given the ever-changing nature of bush fires, floods, and other disasters.

    4. Storm Surge and Tsunami Risk

    While storm surges and tsunamis are caused by different events, they both have the potential to cause significant harm and damage, such as substantial erosion of beaches and coastal highways, and waves pose a threat to boats and buildings along the shoreline. As the surging waters move inland, rivers and lakes may experience adverse effects, contributing to the escalation of flood levels.

    Coastal properties are evaluated for their vulnerability to storm surge and tsunamis, crucial in today’s changing climate.

    Sea levels

    5. Sea Level Rise Projections

    With climate change, assessing the long-term risk of sea level rise is essential for coastal real estate investments.

    Climate Central’s Coastal Risk Screening Tool is a handy tool for quick future projections.

    6. Air Quality Index (AQI)

    Air pollution stands as the most significant environmental threat to global public health, resulting in an approximate annual total of 7 million premature deaths.

    AQI impacts property desirability and occupant health, making it a significant factor in urban and industrial areas.

    7. Soil Contamination Levels

    Soil contamination can limit property use and affect value, necessitating thorough assessments.

    Australian soil information is collected by government and held by the states and territories. Soil Science Australia, the national soil science body, shares a handy list of Soils Data, Maps and Information Sources for reference.

    Soil

    8. Water Quality Assessments

    Our water systems, including surface and groundwater, catchments, as well as estuarine and marine bodies, constitute intricate ecological networks that we engage with daily. These waterways and wetlands play an important role in:

    • Providing drinking water
    • Supporting irrigation and agriculture
    • Receiving and purifying effluent and stormwater
    • Facilitating recreational and commercial activities such as fishing and boating.

    The quality of local water sources is a key consideration, as it affects usability and desirability

    9. Heat Island Effect

    Urban areas influence the surrounding atmosphere and engage with climate processes, resulting in distinct microclimates within cities.

    This heat island phenomenon leads to urban areas experiencing notably higher temperatures compared to their surroundings, particularly in areas with limited green cover and increased hard surfaces that absorb, retain, and emit heat.

    Urban heat islands can increase energy costs and affect living conditions, and is an important factor in urban planning.

    10. Noise Pollution Levels

    The World Health Organization (WHO) recognises noise pollution—defined as unfavorable noise caused by human activity—as an underestimated threat that can cause a number of short- and long-term health problems.

    As well as contributing to health, noise pollution is often seen as a less-than-desirable attribute contributing to liveability.

    Properties exposed to high noise levels from traffic or industry can affect their value.

    11. Environmental Regulation Compliance

    In Australia, compliance with legislation including protection of threatened plants, animals and ecosystems, wildlife trade, hazardous waste, air quality and monitoring compliance with the conditions of approvals granted under the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) is conducted by The Department of Climate Change, Energy, the Environment and Water.

    Compliance with environmental regulations is critical to avoid legal issues and maintain property value.

    Soil erosion

    12. Land Stability and Erosion Rates

    Land stability and erosion rates is affected by soils, surface cover, topography, and climate; all of which are interrelated.

    Particularly in areas with unstable soils or steep terrain, assessing the risk of landslides or erosion is essential for many aspects of real estate such as site selection, development planning and insurance, while these risks can also have an influence on property valuations.

    13. Proximity to Hazardous Facilities

    Numerous research studies have indicated a correlation between living in close proximity to sites with hazardous wastes, industrial facilities, pesticide-treated cropland, busy roadways, nuclear power plants, and gas stations or repair shops, result in an increased likelihood of detrimental health effects.

    Government may form regulations and implement procedures for permits and enforcement to limit pollution.

    As such, properties in close proximity may face increased regulations, risks or insurance costs.

    14. Biodiversity and Wildlife Protection Areas

    With a sustained need for housing, urban planners and conservation managers are consistently exploring alternative strategies for residential development that aim to reduce adverse effects on biodiversity and ecosystem functioning.

    Thus, proximity to protected areas can limit development options and affect property value.

    Biodiversity

    15. Carbon Footprint Analysis

    Climate change is already underway, with an escalating impact that is increasingly affecting all of us around the globe.

    Without immediate and systemic action to address its destructive consequences, the impact is expected to be substantial.

    For greater visibility into the environmental footprint of transactions and impacts of our consumption and production activities, organisations such as FootprintLab provide current, credible and commercially ready carbon data. This information can aid consumers, producers and governments in decision-making that aligns with their sustainability goals.

    Managing carbon emissions from the construction industry is one crucial step in limiting these effects on climate change and a property’s carbon footprint is becoming a significant factor in light of global climate concerns.

    16. Sustainability Certifications

    A green building certification is a verification process ensuring that a building is designed and constructed to enhance energy efficiency, decrease water usage, foster a healthier indoor environment, manage resources and waste effectively, and limit environmental impact.

    The process generally requires adherence to specific guidelines and criteria, often assessed by an accredited third-party organisation, leading to the certification of the building.

    There are different green building certifications around the globe, with LEED in the United States, BREEAM in the United Kingdom and NABERS in Australia, each with its own set of criteria and scoring systems.

    Properties with these certifications are often seen as less risky and more desirable.

    The Proptech Cloud’s Environment and Energy Efficiency Data provides energy supply data and NABERS energy rating data to guide decisions on energy sourcing as part of a robust sustainability strategy.

    Managing Environmental Risks

    Understanding and mitigating environmental risks is important in the real estate sector. By using these metrics, stakeholders can make informed decisions, adapt to environmental challenges, uncover business opportunities and invest in sustainable and resilient properties.

    As the world continues to focus on environmental sustainability, these considerations will become increasingly integral to real estate assessment and development.

    Subscribe to our newsletter

    Subscribe to receive the latest blogs and data listings direct to your inbox.

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