Twenty-three billion-dollar disasters, $115 billion in damage, and not one hurricane: 2025 was a masterclass in how climate risk in the U.S. has changed.
Twenty-three billion-dollar weather and climate disasters struck the United States in 2025, revealing important takeaways for decision-makers in the real estate, public infrastructure, and insurance sectors.
Property insurance markets across the U.S. are under strain as premiums rise and insurers pull back from high-risk regions. In response, a growing number of states are leaning on public and quasi-public reinsurance backstops.
The Weekly: Climate Migration and the Resilience Belt
Extreme weather events and a changing climate are reshaping long-term housing affordability across America. The result is a migration pattern that would have shocked demographers a decade ago: people are leaving the Sun Belt and heading to the Rust Belt.
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Extreme weather events and a changing climate are reshaping long-term housing affordability across America. Two essential components of affordability—insurance premiums and utility costs, in particular—continue to climb in markets vulnerable to natural disasters and extreme heat. The result is a migration pattern that would have shocked demographers a decade ago: people are leaving the Sun Belt, the warm southern and southwestern states, and heading to the Rust Belt, the once-declining industrial regions of the Midwest and Great Lakes.
The Epicenter interviewed Hunter Maats, co-founder of Resilience Investments, about this reversal and its implications for decision-makers on both sides of the migration. "The historical migration that has happened for the last 70 years from the Rust Belt to the Sun Belt has now broken down," Maats says. "For key demographics, it's trending in reverse."
Opportunities for Decision-Makers in the Midwest and Great Lakes Regions
It might be time for the Rust Belt to get a new name. Sarah O’Keefe, director of sustainability and climate justice for the City of Cleveland, has suggested “the Resilience Belt.”
The rebrand reflects a fundamental shift in regional advantages. In the Great Lakes region, milder winters and cooler summers translate directly into lower utility costs, while geographic insulation from large-scale climate events provides both safety and insurance stability.
For Resilience Investments, this isn’t just a migration story: it’s an investment opportunity created by mispriced risk. Maats argues that insurance pricing is becoming a forward-looking indicator of housing value, and points to the Summer 2025 WSJ/Realtor.com Housing Market Ranking as a mainstream signal that this is already showing up today: the top 20 performing markets in the country are all in the Midwest and Northeast, regions with stronger climate and affordability fundamentals.
For cities like Detroit and Cleveland, which saw their populations plummet by two-thirds during deindustrialization, this represents a valuable opportunity. Repopulation means a larger tax base and the reactivation of communities that have sat dormant for decades. But Maats says that this moment demands more than passive acceptance of growth, as reinvestment collides with communities that have been shut out from economic opportunity for decades.
"Gentrification is a risk for this region,” says Maats. “The question is, when new investment, housing opportunities, and business flows in, will people be lifted up or will they be pushed out?” That’s a big part of why Resilience Investments was created, he says. “We know what's coming. Let's get ahead of it. We can start to design financial mechanisms and systems to support creating the right kind of outcomes that benefit the people who are there, while still allowing for the capital to move ahead to create enough housing and jobs.”
Strategic reinvestment in workforce development could ensure existing residents benefit from the coming boom. “There's a shortage of 2.1 million people in the skilled trades by 2030,” says Maats. Equipping current residents with skills in electrical work, HVAC, solar installation, and plumbing creates pathways to economic opportunity amidst climate migration and accelerating climate hazards. Meanwhile, cities like Detroit and Cleveland control land bank assets—empty plots accumulated through decades of decline—that could be managed by urban wealth funds or community asset trusts to generate revenue that isn’t tied to taxes.
Recommendations for Decision-Makers in the Sun Belt
Florida illustrates what's at stake when climate pressures meet fiscal fragility. With no state income tax, Florida depends heavily on sales tax revenue from 140 million annual tourists, but that gets dicey when hurricanes keep closing Disney World. And at the municipal level, a heavy reliance on property tax becomes precarious when 80% of Florida's $4 trillion in real estate value sits in coastal counties increasingly threatened by storms and sea-level rise.
“Much of the most valuable real estate in the U.S. is the most climate vulnerable, and it’s taxes from valuable real estate that pay for services, right?” says Maats. “So the Sun Belt is massively disadvantaged. The key block has been pulled out from the Jenga tower.”
For Sun Belt decision-makers, Maats identifies several priorities:
Fix insurance systems. He points to the UK's Flood Re program, a public-private partnership that successfully sunset the country’s insurer of last resort. “Over the course of 25 years, they put a £10.80 levy on every policy, and that goes to cover the most at-risk homes,” says Maats. “It's allowed the private market to return, while at the same time making sure that everyone is covered and also creating incentives for folks to build in the right way.”
Explore urban wealth funds that can generate revenue independent of declining tax bases. “Municipal buildings are perfect platforms for distributed energy resources,” says Maats. By putting solar and battery installations on those properties, cities can produce power for communities while generating income for resilience initiatives like undergrounding power lines.
Accept the reality of outbound migration. While cities like Los Angeles will likely be able to stabilize, smaller municipalities without a strong tax base will be limited in their options to mitigate threats like sea level rise. “How do you deal with depopulation versus how do you deal with repopulation, and how do you do it in a strategic way? The former is a challenge that the Rust Belt has already had to deal with.” With this unexpected reversal of roles, he says, comes an opportunity for a mutually beneficial knowledge transfer.
The resilience ecosystem has to work together
The Rust Belt and Sun Belt are in for dramatic transformations, but the models for navigating both opportunities exist.
The question now is less about whether specific mechanisms like urban wealth funds or community asset trusts are effective; it’s about whether different parts of the resilience ecosystem can work together. As Maats puts it: “We have to collaborate and learn that our different perspectives are not a source of opposition but are, in fact, the raw material for innovating better solutions for all stakeholders."
Risk Ownership in a Time of Rising Climate Costs | Insurance for Good | CA FWD and Insurance for Good argue that resilience investments remain underfunded because avoided losses aren't valued on balance sheets. They outline how shared ownership models, new financing structures, and better measurement of risk reduction could realign incentives across sectors.
Wildfire and Insurance Options for Homeowner Coverage | Headwaters Economics | A new report explores five strategies that could help homeowners secure coverage in high-risk areas. Innovative models like community-based catastrophe insurance and parametric insurance could combine with traditional coverage to fill gaps.
Climate Change Is Rapidly Altering Cities. Here’s How Some Are Responding | Smart Cities Dive | At the National League of Cities Summit, leaders discussed how their communities are responding to climate change’s effects on urban landscapes. As wildfire risk grows and 90° days hit areas without AC, cities are taking the lead on resilience as federal support flutters.
Read more about resilient public infrastructure and government solutions on The Epicenter here.
Real Estate & Construction
California’s Latest Climate Gambit: Turn Air Conditioners Into Heat Pumps | Heatmap | Twelve cities in California have adopted new building codes that strongly encourage homeowners who are replacing air conditioning systems to upgrade to heat pumps. The policy could make it easier to regulate home temperatures during periods of extreme heat.
Rebuilding Safer From Wildfire: Implementation Guidebook | Resilient Los Angeles | With wildfire losses accelerating and the cost of resilience often preventing safer rebuilding, this Guidebook offers a practical, evidence-based blueprint for closing the "Resilience Delta" and protecting communities for the long term. Collaborators include The Resiliency Company, Insurance for Good, the Environmental Defense Fund, the Resources Legacy Fund, and a steering committee of industry-leading organizations.
Read more about resilient real estate on The Epicenter here.
Private Investment
Recovery Isn’t Just Rebuilding Homes — It’s Remembering People | Disaster Philanthropy | Through its Recovery Fund grant program, the Center for Disaster Philanthropy is channeling private philanthropic capital toward the overlooked aspects of disaster recovery: case management, mental health services, and support for vulnerable populations.
Will Everill On Making Pests, Invasives, and Bio Risk Tech The Next Adaptation Frontier | Climate Proof | As climate change accelerates pest damage and invasive species spread, a new wave of adaptation technology is emerging to protect agriculture and ecosystems. A climate adaptation VC founder discusses the emerging field on Climate Proof’s podcast.
Rhode Island Offers a Blueprint for Financing Coastal Climate Resilience | Susan Crawford | Over the last 15 years, Rhode Island has seen cataclysmic inland flooding, tornadoes, and rapidly rising sea levels wearing away at its coast. But the state plans to be a safer, more stable place to live in 50 years.
Why Remediation is the First Step to Real Resilience | The Epicenter Editors | As the climate crisis exposes broader swaths of the U.S. to severe weather, responsible future-proofing strategies must account not only for fortified development but also for comprehensive cleanup. Real resilience can't exist without effective remediation first.
Standards, Not Pricing: How Insurers Can Bend the Market Toward Safety as Climate Hazards Intensify | Francis Bouchard | Insurers play a key role in sending risk signals, sometimes in a form other than price. These risk experts need to lead by reframing the “insurance crisis” as the “insurability crisis,” and leveraging a time-tested safety standard approach to align a complex ecosystem of competing interests.
The Statistic of the Week
8.7°F
In Detroit, the lowest minimum temperature of the year is about 8.7° warmer than it was in 1970.
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The Epicenter helps decision makers understand climate risks and discover viable resilience solutions. The Epicenter is an affiliated publication of The Resiliency Company, a 501(c)3 nonprofit dedicated to inspiring and empowering humanity to adapt to the accelerating challenges of the next 100+ years.
Twenty-three billion-dollar disasters, $115 billion in damage, and not one hurricane: 2025 was a masterclass in how climate risk in the U.S. has changed.
Twenty-three billion-dollar weather and climate disasters struck the United States in 2025, revealing important takeaways for decision-makers in the real estate, public infrastructure, and insurance sectors.
Property insurance markets across the U.S. are under strain as premiums rise and insurers pull back from high-risk regions. In response, a growing number of states are leaning on public and quasi-public reinsurance backstops.
States are making a mistake by using public reinsurance mechanisms to address rising insurance costs. Legislators should invest in climate resilience and risk reduction rather than transfer risk to taxpayers and ignore the underlying drivers of catastrophic insurance losses.
