| Nearly three years ago, Owen Woolcock was on Zoom trying to convince a real estate investor to swap some of his buildings in the New York City area for properties in cities around the Great Lakes. Climate change was overturning assumptions about what makes a profitable housing investment, argued Woolcock, an Australian who had recently launched an investment firm called Climate Core Capital. Desirable locations from Austin to Miami were set to become expensive, riskier bets. Overlooked locales, he argued, would begin to draw money and people as they avoided the worst of the 21st century's volatile climate. The Wall Street veteran on the other end of the call managed tens of millions of dollars of real estate for a wealthy family, Woolcock recalled. Although he said he agreed with Woolcock's forecast, he couldn't sign on. "The problem is," Woolcock remembered him saying, "I have spent the last seven years going to my investment committee and telling them to invest in the Sun Belt, so my personal track record is tied to the opposite of what you guys are saying." In the past decade, millions of people have moved to places threatened by climate change, bidding up real estate from flood-prone coastlines to the fire-scarred Southwest. But a small group of investors — including Woolcock and his partner Rajeev Ranade, along with iconoclasts like David Burt of DeltaTerra Capital — are pushing in the opposite direction. Their argument: As Americans wake up to the threat of climate change, the value of homes in risky markets will begin to slide. Woolcock co-founded Climate Core Capital with Ranade in 2021 promoting a thesis that might be called the "big long": redirect money into growing, climate-resilient cities. I was sitting in a conference room in their co-working space in Boston this summer as the two gave the pitch they normally delivered to investors. The market hasn't yet learned to properly price climate risk — or resilience. Investors could earn more, and risk less, by investing in better buildings in safer cities. A chart displayed on the wall showed a point representing Naples, Florida, a bull's eye for rising seas and hurricanes. It barely fit on the chart's risk axis. On the opposite side was what they see as a low-risk climate haven prepared for a volatile century: Ann Arbor, Michigan. Even as more investors say they're considering climate change in their calculations, few are putting money on the line. Burt, CEO of DeltaTerra Capital, is the flip side of Woolcock's bet. He wants to re-create his successful wager against the subprime housing market before it collapsed in 2008. Instead of betting against toxic mortgages, he sees the rising costs of climate change devaluing millions of homes from Louisiana to New York before 2030. Both of them, however, admit that it's a hard sell. While their firms have advised on hundreds of millions in real estate transactions, neither has found investors to back their bets on the future. Burt, Woolcock and Ranade are gamblers with the same worldview. They're confident they'll be proved correct — they just might be early. To find out what this means for the future of homeownership in the United States, and why you should care, click below. Write me with your questions at climatecoach@washpost.com. I read all your emails. | 
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