It's no secret that climate change has increased the frequency of extreme weather events. From flooding to wildfires, insuring properties has become all the more challenging in the wake of recent destruction. So, there's a huge push toward eco-friendliness not just in the corporate and manufacturing worlds but also in the world of real estate.
A new city that's in the works takes this concept a step further. And it may spell opportunity for real estate investors.
A $400 billion investment
Recently, billionaire and former Walmart president Marc Lore introduced his plan for a $400 billion metropolis -- the city of Telosa. Dubbed "the new city in America," the goal is to build out a metro hub on desert land in as sustainable a fashion as possible. The city's initial proposal is centered around a 150,000-acre design with sustainable architecture and energy production, as well as a drought-resistant water supply.
One notable thing about Telosa is its planned transportation system. Rather than focusing on massive roadways, the city will be geared more toward pedestrians and bikers -- for example, building biking and walking trails -- and slow-moving autonomous vehicles, aiming to limit the extent to which fossil fuel-dependent vehicles take over the city's roads.
All told, Telosa is expected to house around 5 million people. The first phase of construction is slated to cover 50,000 residents across 1,500 acres of land, with the intent to begin welcoming residents by 2030. But whether that is attainable is up for debate.
So far, the project has a clear roadmap but no official location. While the goal is to build out Telosa on desert land, so far, Arizona, Texas, Utah, Nevada, Idaho, and the Appalachian region are all in the running.
Furthermore, the project will require a massive amount of funding to come to fruition. As of now, the price tag is estimated at $400 billion. Funding is expected to come from a variety of sources -- from philanthropists to private investors to federal and state grants. Ultimately, Lore wants Telosa to be the "most open, most fair, and most inclusive city in the world."
Can real estate investors get in on the action?
It's unclear right now as to how real estate investors can get involved with Telosa on an individual basis. But as details emerge, it could potentially spell opportunity for real estate firms with large amounts of capital to profit in a very big way.
Either way, it's clear that eco-friendliness is the wave of the future on the real estate front, even outside of Telosa. If investors can't get in on the new city, they can instead look at retrofitting existing properties or buying income properties in established communities that are more sustainable.
In fact, a number of cities are already imposing eco-friendly mandates that are impacting real estate investors now or will impact them in the not-so-distant future. New York City, for example, is requiring larger buildings to reduce their carbon footprint or otherwise face hefty fines in the near term. The sooner real estate investors jump on that bandwagon, the more they stand to profit.