By: Paris Apodaca, DCNF
A new climate-related metric advanced by a company linked to private equity firms is quietly subverting the U.S. housing market, a new report claims.
Major online real estate platforms such as Zillow, Realtor.com, Homes.com and Redfin all have featured predictive climate-risk scores, according to a July report from the American Energy Institute and Consumers’ Research first shared with the Daily Caller News Foundation. The scores, developed by private company First Street, can often directly contrast with the Federal Emergency Management Agency’s (FEMA) official flood maps and determinations.
“For most American families, a home is their single largest financial asset and the primary vehicle for building generational wealth,” the report claims.
“These scores lack statutory authority, formal appeals, and frequently contradict FEMA maps,” it adds. “A documented $6.2 million case study shows buyer interest collapsing and prices dropping after a private score assigned a 9/10 flood risk to a FEMA Zone X (minimal risk) property.”
Consumers’ Research asked multiple federal regulators, including Congress, to investigate First Street over concerns about its impact on residential real estate, according to the report.
“BlackRock, Vanguard, and State Street hold 19 to 25% combined ownership stakes in the parent companies distributing these scores,” the report added.
First Street did not immediately respond to the DCNF’s request for comment.
🌡️Will you live on America’s “extreme heat belt” in 30 years?
About a quarter of America’s land area may soon become unlivable.🧵⬇️https://t.co/D7WKWj6o5G pic.twitter.com/dn1d0lETNP
— FORTUNE (@FortuneMagazine) August 15, 2022
Molly Vogt, Senior Fellow at the American Energy Institute, told the DCNF that First Street is an “unregulated private company” whose “scores routinely contradict official FEMA flood maps, undermine property values, and influence homebuyers without any transparent methodology or meaningful appeals process.”
“Even more concerning, BlackRock, Vanguard, and State Street, the same asset managers that championed destructive Net-Zero initiatives across corporate America, hold significant ownership stakes in the platforms distributing these scores,” Vogt continued.
Will Hild, Executive Director of Consumers’ Research, told the DCNF that First Street is “implying federal scientific backing, when in reality they are using their own arbitrary scores to push a climate agenda.”
“By pushing activist-driven modeling, First Street is denying homeowners any meaningful path to challenge the damage being done to their largest asset,” he added. “It’s no coincidence that Wall Street giants like BlackRock, Vanguard, and State Street hold major stakes in the platforms pushing these scores, giving them yet another lever to impose ESG [environmental, social and governance] agendas on American families.”
“American homeowners deserve to know who is shaping these property valuations, how these scores are calculated, and what safeguards exist to protect them from inaccurate or misleading assessments,” Vogt told the DCNF. “Congress must investigate before more American families watch their biggest financial asset quietly eroded by an unaccountable, Wall Street-linked scoring system.”
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