Climate Change ‘Inevitable,’ Already Driving Up Real Estate Insurance Costs

The general manager of Santa Barbara’s largest commercial real estate firm told a business group Nov. 14 that climate change is affecting the market and is “already inevitable.” 

Speaking to about 50 people at the Santa Barbara Executive Round Table, Radius general manager Brian Johnson said such conditions as more intense wildfires, sea level rise and beach erosion are driving up the cost of insurance premiums along the Central Coast. 

He also told the crowd of about 50 that employers can’t attract enough employees because of a lack of affordable housing. Johnson said if new commercial and residential construction stays low, rents will rise despite state and local governments’ efforts to push for more building. 

Speaking on a panel with Johnson, Goleta-based economist Mark Schniepp told the breakfast gathering that consumer pessimism is growing despite the nation’s 2.1 percent economic growth in the face of the “most widely expected recession” believed to be coming since the historic economic expansion is so old. 

Schniepp said the looming recession will hurt housing, spending, employers and building, but may not be as severe as the 2008 economic downturn. 

He said next year will see a 1.2 percent growth in gross domestic product with weakness in the economy delayed, but still vulnerable. He called it “the year of living dangerously.” 

Schniepp, head of the California Economic Forecast, put the risk of recession at 50 percent. So, he said, businesses should prepare by watching their staffing levels. 

Also on the panel was Brett Weichbrod, a partner and wealth manager at AmeriFlex Financial Services, who said a recession is avoidable in the face of a mixed economic forecast. 

Panelist Keith Berry, a 40-year Santa Barbara Realtor, said last year saw the sale of 20 multi-million-dollar homes in the region. 

Johnson was asked by an audience member about La Cumbre Plaza, which he said has a number of vacancies. He said it would be “the greatest thing” if the defunct Sears building there was somehow made into housing. 

On the subject of downtown State Street, Johnson said the 300 to 600 blocks are showing sign of new life after years of vacancies because 14 new leases have been signed there, 

And, he said, many breweries are going from Goleta to State Street where there “is a lot of beer” now.  

However, with nothing in the old Macy’s building permanently on the 900 block of State Street, many cruise ship tourists are shopping in the lower part of the corridor and in the Funk Zone while the Paseo Nuevo renovation continues. 

Johnson also addressed the growing prevalence of cannabis, which he said Santa Barbara is a good place to grow it. However, because of the problems associated with that crop, “It will be disruptive for sure. 

On the national level, Schniepp said investors like what they are seeing. So, he predicted the president will likely remain in the White House for another four years. 

Leave a Reply

Your email address will not be published. Required fields are marked *