Hotter days, less water, worse wildfires: How climate change could hit Boise home values
In recent months, Boise’s once-scorching hot housing market has started to cool. Experts say predicted climate change factors — higher risk of wildfire and drought, as well as higher temperatures and less snow— could lead home values to fall even further in the future.
Lee Parton, a professor of environmental economics at Boise State University, said home prices are linked to the environment. A working paper from University of Pretoria noted Idaho among the places most likely to see declining home values related to climate impacts. That research has not yet been peer reviewed, and Parton said its methodology wasn’t clear but its conclusions were in line with similar studies.
Climate change could impact many of the things that make Idaho a draw, like outdoor recreation and relatively good air quality. According to a climate mapping tool launched by the White House earlier this year, Boise is expected to have more extremely hot days of over 100 degrees, more risk of wildfire and worsening drought in the coming decades.
“If there is some degradation of the natural amenities in Idaho, you could see what we would call in the economics world a loss of well being,” Parton told the Idaho Statesman.
Wildfire poses major housing, economic challenges
Wildfires are one environmental factor that Parton said are particularly “salient,” meaning they have a significant impact. Homes in the wildland-urban interface — where residential areas meet natural areas, like in the Boise Foothills — are especially at risk of wildfire damage because of their proximity to wilderness.
“I think wildfire risk is important in the state of Idaho,” he told the Statesman. “We have a lot of homes in the wildland-urban interface. Having studied coastal issues, particularly with flooding, I think that this is going to affect property prices, primarily through the insurance mechanism.”
Parton said insurance companies will start pricing in increased wildfire risk as climate change continues to make larger, more intense fires more common. As insurance costs increase, buyers might be less willing to pay higher home prices, bringing values down. But Parton said that willingness to pay can depend on the type of home — for example, buyers are willing to accept more risk for vacation homes than for their primary residences.
“When you talk about some of the really great natural amenities that we have here in Idaho, those can be in some pretty risky areas when it comes to wildfire,” Parton said.
Jude Bayham, an environmental economics professor at Colorado State University, said insurance has started to falter in places with extreme fire risk, like parts of California. Companies have stopped providing fire insurance altogether in especially risky areas, impacting the value of homes there.
Both researchers said drought and water scarcity could also contribute to lower home values, especially if Idahoans start seeing restrictions on water usage.
But Parton said undesirable changes to Boise’s climate likely won’t undo the last several years’ home value increases into a market some have described as overpriced.
“Was there a surge in demand, and now we’re going to see a return to normal?” Parton said. “It remains to be seen how that relates to climate change.”
Loss of recreation could impact economy
Some aspects of Idaho’s projected climate change are expected to impact the state’s outdoor amenities and recreation, which can influence the economy.
For example, Parton said, if forest fires increase they can reduce recreation, whether through land closures in burned areas or poor air quality.
Parton and Bayham pointed to studies on declining snowpack, which show less snow depth can influence winter recreation and short-term rentals at ski areas. With fewer people on the mountain, there’s an economic ripple effect that can influence mountain towns and more as areas lose revenue from lodging, dining and more.
Parton said understanding the possible economic impacts of climate change is not as simple as just looking at what might happen in Idaho. While increased risk here might make Idaho a less desirable destination, climate change will also impact other parts of the country. Idaho could continue to have better air quality or lower risk than other locations.
“People still might find it nicer here than where they’re coming from,” Parton told the Statesman. “Just because (climate impacts are) happening here in Idaho doesn’t mean that is going to cause housing prices to go down. That’s why understanding these things in people’s preferences, about risk and other types of amenities in a specific area, is really important for trying to understand how these future risks can affect property markets.”
Bayham said he’s not aware of research on which climate factors have most impact, but he believes people will be more willing to tolerate factors like snowpack loss over worsening wildfire risk.
“Losing a few ski days is obviously a bummer,” he said, “but it’s not like losing your house.”
What role does environmental policy play?
Parton said groups may push for more environmental policies as climate change continues to impact Idaho. But he warned that some of those policies can have more economic drawbacks than they do environmental benefits.
“One thing policymakers should consider is what types of unintended consequences might arise,” he said.
For instance, one 2019 study found that some energy policies meant to reduce climate change impacts ultimately led to the production of more greenhouse gases.
That doesn’t mean Idaho shouldn’t make efforts to adapt to its changing climate, Parton added. He said water conservation and energy efficiency efforts are among potential policy options for the state.
“Idaho might consider at some point in the future if wildfire risk becomes very high that we think about managed retreat from the wildland-urban interface and managing that risk a little bit more,” he said.
But Parton pointed out that change in Idaho alone is unlikely to make a significant difference on climate change.
“Inherently with the climate, you have a collective action problem,” Parton said. “Even if Idaho did everything possible to mitigate any potential climate changes that could affect Idaho, it’s unlikely to move the needle. It’s a worldwide action problem.”
