There are significant barriers that impact both the resilient construction of new housing, and the adaptation of existing properties, says the Actuaries Institute in a submission to the Productivity Commission.
Commenting on how housing is built and updated over time so that it is resilient to the effects of climate change, Actuaries Institute CEO Elayne Grace says that with around 11m dwellings in Australia at present, and the current rate of new builds of approximately 170,000 p.a., widespread adaptation requires a focus on both new and existing homes.
Government alignment
For new housing, greater local, state and Commonwealth government alignment is required, where possible to harmonise land use and building codes.
Whilst local nuance will be essential, to reflect community and geographic risks, constraints and needs, there is a role for the Commonwealth Government to create a framework for land use planning and building codes so that they are fit for purpose, over the lifespan of properties and communities and reflect the risks associated with potential future climate change scenarios.
Although such developments are in progress, examples such as the National Construction Code has not yet been enhanced, and there is little current alignment with land use rules. Additionally, these do not reflect climate exposures and the future potential impacts under plausible scenarios.
Building codes should reflect the specific cyclone, flood and bushfire-resilient standards needed for high-risk areas and the future potential impacts of climate change.
Other enablers to increase household resilience include:
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Where homes are being repaired, or renovated, building standards should have an explicit focus on “building back better” to ensure that opportunities for adaptation are not missed.
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Access to national credible, trustworthy data on risks to individual properties, and how these might evolve over time.
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Access to readily available, credible, trustworthy guidance on cost-effective adaptation measures tailored for each home, that can empower homeowners to act. Access to practical support and financial mechanisms for homeowners. For example, local or state governments could provide a “one-stop shop”, where homeowners can assess property level risk, obtain recommended solutions, be connected with suppliers and installers, and if necessary, concessional finance.
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Aggregators, such as local government, state or regulatory bodies, have an opportunity to coordinate activities across communities, builders, suppliers and other stakeholders, attract finance, capture economies of scale, and drive change at the scale required.
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High levels of community engagement are required, to educate and seek broad public support, as well as input from relevant stakeholders, such as developers and builders.
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Developing financial instruments specifically designed for adaptation that can crowd-in private sector capital.
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Government action may be required to support property buy-backs and managed retreat/relocation.
Barriers to resilient housing
Many homeowners in high-risk areas lack the information, resources and funds to increase resilience at the scale required to protect communities and suburbs.
Because home insurance premiums are based on risk at an individual property level, many homeowners in high-risk areas experience home insurance affordability stress. This can impact the level of financial protection they have to recover from adverse events.
Home insurance premiums reflect current risks, not those that may emerge going forward. As a result, these provide limited price signals to homeowners on how exposures and premiums might change over time. Accordingly, home insurance affordability, which is already a challenge in high-risk areas, may become more pronounced over time.
In addition, there is a lack of readily available, credible, trustworthy guidance on cost-effective adaptation measures, a lack of support and finance to access those measures and a lack of confidence that home insurance would become affordable after such measures.
Adaptation in the home may prove to be ineffective if supporting infrastructure and services are not similarly protected. For example, there may be little point protecting a single home, if the suburb, schools and services are not similarly protected from flooding.