About BODIS

Quantifying long term impact of accelerated subsidence on real estate value in sinking cities in a changing climate

Welcome to BODIS, your trusted partner in comprehensive risk assessment for large asset owners. Our innovative service combines advanced analysis of flood risk and subsidence risk to provide a unified and insightful Value at Risk (VaR) outcome. Whether you're an insurance company, bank, or involved in social housing, we empower you with the knowledge to make informed decisions, mitigate risks, and protect your valuable assets.
Climate
Foundation risk
Flood risk
Risk of overlending
Climate risk mitigation

Climate

Rising sea levels and land subsidence may increase flood-prone areas by 50% this century. Understanding soil motion is key for effective adaptation, requiring reliable and accessible data. BODIS provides long-term predictions of monetary risks to buildings and infrastructure from subsidence and flooding, considering uncertainties in climate change. Failure to price foundation and flood risks leads to harmful financial consequences for home buyers and owners. Both risks are not (fully) insurable and homeowners are insufficiently aware of these risks, as a result of which they unexpectedly see the value of their home fall or face recovery costs.

Deltares, 2015

Climate impact on housing value: Foundation risk

Because foundations have to be replaced over time, the risk of replacement increases with time and thus the value of a house decreases. Without climate change, wooden piles can be expected to last about 90 years. Climate change causes lower and more changeable groundwater levels and weaker soil, which reduces the lifespan of piling, as well as other types of foundations, which then requires earlier replacement.

Climate impact on housing value: Flood risk

A flood leads to sudden damage during and immediately after a flood, causing the value to drop. But because hardly any homes are sold at that time and selling and buying only resume once properties are repaired, value recovery occurs relatively quickly. For the first four to nine years after a flood, buyers demand a price discount (which gradually decreases) for the risk of flooding. As floods (caused by heavy rainfall) become more frequent and severe, expectation is that the very limited price discount for flood risk that existed in the past will increase in the future and people will be less likely to overlook flood risk in their home transaction.

…Read more on ABNAMRO: Stacking climate risks and financial resilience in the housing market 🔗

Risk of overlending because climate risks are not priced in

The chance is increasing that climate risks will influence house prices, but the awareness of it and insurance against it are lagging behind. There are several climate risks that impact the valuation of houses. The two most prominent are foundation damage (subsidence and pile rot) and Floods. Foundation damage is not insurable and flooding only under certain conditions. Both risks are not yet sufficiently priced in Dutch housing market attracts both potential home buyers and homeowners may encounter financial problems. Potential buyers of a home are insufficiently informed about possible climate risks and because climate risks are not part of the financing process, there is a risk of over-lending.

Read more: TREND REPORT 2024 by supervisory authority AFM 🔗

BODIS helps homeowners and homebuyers to mitigate climate risk at the portfolio level

Climate risk maps are not easy enough to find and even harder to interpret. The risks of future damage due to climate change seldom lead to price discounts on a home purchase. Due to information and knowledge asymmetry, homeowners and home buyers do not know what information is available or how to interpret it. Having a foundation survey carried out and negotiate a discount based on an informed risk assessment is often not feasible in a tight housing market.

BODIS is combining land subsidence, climate and flooding data into economic impact on asset-level to help users mitigate these impacts at the portfolio level.

BODIS offers asset & portfolio holders quantitative approaches of future developments to make decisions today

Consortium: SkyGeo - Hydrologic - Nelen & Schuurmans