Amidst growing concerns about climate risks to the U.S. housing markets, strategies to physically retrofit homes are gaining attention—including within debates over how to resolve intersecting crises of housing re/insurability and affordability in highly exposed sites like Florida. We consider an important but under-studied example of this “climate-proofing” strategy unfolding today: Residential Property Assessed Clean Energy (PACE) finance. While PACE has historically financed decarbonization retrofits, it is increasingly being deployed to facilitate hurricane risk reduction in Florida. In this paper, we introduce PACE: its basic characteristics, evolving uses, and controversies. Exploring the Florida case, we examine two deeper but as yet under-examined financial tensions: PACE’s intersections with other forms of property-linked finance (and potential systemic breakdowns) and rising affordability breakpoints as homeowners encounter its new debt amidst other growing and intersecting climate/climate response costs. These issues call for more transformative imaginaries of urban retrofitting and its resourcing.

As intensifying climate-related disasters strike cities across the United States, they are provoking rising concern for the stability of the U.S. housing market and broader financial system. How homeowners, mortgage lenders, federal institutions/regulators, and investors will variously encounter and manage climate risk is an urgent question for urban scholars, as is who might bear the costs of restabilizing mortgage finance under new breakdowns. This paper’s multi-scalar intervention draws on financial “following” methods to explore how climate risks are being experienced and governed at multiple illustrative moments of U.S. mortgage finance: (1) working households at the front line of urban climate impacts, (2) mortgage professionals brokering loans to them, (3) government-sponsored enterprises (GSEs) negotiating incoming federal climate risk disclosure requirements, and (4) capital markets off-taking GSE risks through financial derivatives like credit risk transfers. Emerging concerns include ruptures between household risks and financial system-preserving responses and new dangers of “climate redlining.”.

This conceptual and exploratory research study investigates, systematically and holistically, climate-adaptive spatial design interventions for high-density informal urban areas in hot arid climates, which remain understudied despite their vulnerability to heat stress and the heat-vulnerable groups populating them. Five streetscape design prototypes are proposed that include climate-adaptive spatial interventions appraised qualitatively with consideration to relevant feasibility matters: land use planning, equity, affordability, mobility, and sense of place. The study shows that there is potential for climate-adaptive interventions in informal urban areas in hot arid climates, but that these interventions also present challenges. Common climate-adaptive design strategies can be used to address heat stress in these areas but, for example, increasing vegetation might be challenging due to water stress. As a conceptual study, the findings presented and the discussion raised on feasibility are targeted at opening avenues for future research, and at informing decision-makers and spatial designers.