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Canadian Cities Most Resilient For Investors, Says Report

Written by on Monday, 19 May 2014 1:01 pm

A city's resilience is based on it ability to avoid or bounce back from an adverse event, says international property group Grosvenor, based in the U.K.

"Canadian cities are the best bet for long-term real estate investment, with Toronto, Vancouver and Calgary taking the first, second and third-place spots respectively," says the company in a recent report.

"The research ranks 50 of the world's top cities according to their resilience: a product of their environmental and social vulnerability and adaptive capacity, which covers community, infrastructure, resources, environmental and climatic factors."

"Canada, as a whole, is doing exceptionally well in developing resiliency," says Richard Barkham, group research director for Grosvenor. "The investment of city leaders in infrastructure and its commitment to upgrading it over the decades has put Toronto at the top of Grosvenor's list of the world's most resilient cities."

That may come as a surprise to some people who live in Toronto, who point to the city's aging infrastructure as the reason why two weather emergencies in 2013 cost residents and insurance companies millions of dollars.

"Toronto is no stranger to the importance of resiliency, having endured natural disasters such as the 1998 ice storm and even Hurricane Hazel in 1954," says Barkham. A recent report to Toronto City Council shows several major weather events took place in the last 15 years, including three one-in-100-year rain storms.

In 2001 it was the driest growing season in 34 years; while 2002 was the warmest summer in 63 years and fifth-coldest spring.

"The year without summer" was declared in 2004 when all-time records for rainfall were set in some areas near Toronto. The next year was characterized by blistering hot days. In 2006, 23 tornados were reported across Ontario (normal is 14). Then in 2007, Toronto had the least snow cover ever, followed by the city's third-snowiest winter ever in 2008.

These and the two events in 2013 – flooding from heavy rains in July and a winter storm in December that caused downed trees and power lines and widespread power outages – has prompted the city to launch a public review of its resiliency. A series of public meetings are underway to "identify issues and concerns and propose recommendations to improve the city's response to future emergency events." There is also a third-party review of the city's response to the December storm.

Toronto Hydro, which was criticised for its response to both the 2013 events, is doing another separate review that will cover its preparedness, response and recovery and communication during the crisis, among other things.

The Grosvenor report says Canadian cities generally have low vulnerability to shocks such as change in the climate, environmental degradation, shortage of resources, failed infrastructure or community strife. Canadian cities also can adapt to situations. "There is a high level of resource availability and Canadian cities are well-governed and well-planned," says the report.

Vancouver placed second on the list of the top 50 cities, despite its low-lying location that "makes it relatively vulnerable to sea level rise," says the report. But the provincial government has taken sea level rise predictions into consideration for planning purposes, and the city has "excellent adaptive capacity scores," says the report. "Vancouver also scores well in terms of funding structures, with a favourable country credit rating and good access to financial services within the city."

The report says that U.S. cities "do not score particularly well in our vulnerability rankings. Inequality in U.S. cities leads to social tension, utilities lack investment and urban sprawl leads to the over consumption of land resources."

However, the U.S. cities have a strong ability to adapt, with plentiful resources, public accountability of public officials and well-developed technologies to deal with problems. "This suggests that U.S. cities will continue to see a pattern of effective public intervention, but often only after a major shock has occurred," says the report.

Chicago ranks fourth of the list, followed by Pittsburgh. At the other end of the list are Dhaka, Jakarta and Cairo in the bottom three spots.

"The bottom 20 cities are considerably weaker than the top 30," says Barkham. "Their vulnerability derives from inequality, poor infrastructure provision and environmental degradation and, to a lesser extent, climate vulnerability."

Grosvenor says the research "provides us with a powerful tool to use when looking at the risks and opportunities of long-term real estate investment in cities around the world.

"We're not suggesting that you shouldn't invest in those cities that place lower down the rankings, but the research highlights the risks those cities face and enables more informed decision making. In some cases there could be greater opportunities, especially where a city has made a step change in its commitment to improving its adaptive capacity."

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  About the author, Jim Adair

Individual news stories are based upon the opinions of the writer and does not reflect the opinion of Realty Times.
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