Red State Sets Example For Resilience Economics As Severe Weather Threat Grows

The increasing frequency of severe weather events is becoming impossible to ignore, even in states where the term “climate change” is taboo. 

Alabama is the latest to pass a climate bill packaged as resilience planning and economic protection, mandating a statewide risk and vulnerability assessment, formalizing a cross-agency resilience council that includes real estate voices, and creating the role of chief resilience officer.

Alabama’s Senate Bill 137, signed into law in April, is designed to help better predict the cost of natural disasters and invest in resilience in a way that makes financial sense for insurers and property owners. While this kind of legislation could add to upfront development costs, experts say it is needed to attract and retain investment, and builders are among the loudest voices pushing for it. 

“No matter what the politics are, reality has a way of changing your calculations,” said Patrick Chopson, co-founder of Cove, a resilience-focused artificial intelligence architecture firm. “That's affecting downstream what people can actually build.” 

Local experts say the legislation is the result of decades of conversations between stakeholders, including builders and developers, about creating standards for more resilient structures that are worth building and buying. And the "Heart of Dixie" isn't the only place where this is happening.

South Carolina implemented a dedicated Office of Resilience in 2020. North Carolina, Arizona and Connecticut have launched or expanded statewide resilience and extreme weather planning efforts. New Jersey requires forward-looking flood risk in development standards, and Colorado is forcing insurers to disclose catastrophe models and incorporate mitigation into pricing.

The U.S. has logged more than 400 billion-dollar weather events since 1980, with a 180% increase in the annual number from 2013 to 2023. Insurance prices have skyrocketed, spiking by double digits annually since 2020. Coverage is getting harder to secure, and some providers have pulled out of high-risk markets. 

While the cost is pushing Americans to consider moving, more states are passing legislation to quantify risk, standardize mitigation and give insurers and lenders something consistent to underwrite against. 

Alabama's resiliency law came out of decades of planning urged along by homebuilders and roofers after the one-two punch of Hurricane Ivan in 2004, which led to thousands of roofs being replaced, and Hurricane Katrina in 2005, which tore them right back off.  

“A small group of stakeholders from insurance and building industries said, ‘This is insane, we have to do something different because we're doing the same thing over and over,’” said Alex Cary, market development manager for the Fortified program at the Insurance Institute for Business & Home Safety.

A homebuilder in the coastal Alabama area at the time, Cary was part of the private sector push for better resilience planning and legislation. Researchers say the private sector is an integral part of groups that create disaster plans, as it brings a perspective and historical context that can’t be captured in a spreadsheet.

“It's vital that the private sector has a seat at the table and has the ability to influence and provide influence in those types of plans,” said Mathew Sanders, senior officer for U.S. Conservation at The Pew Charitable Trusts, which commended Alabama on the legislation. 

“It provides an opportunity to create a two-way flow of information between government and the private sector,” Sanders added. “The plan itself is designed to take in good data.” 

Pricing Impact

The state-level push comes as the federal government is offering less data. The National Oceanic and Atmospheric Administration stopped publishing information about billion-dollar weather and climate disasters last year, making it harder to find a correlation between severe weather and increased insurance premiums, Green Street Research Associate Evan Lustick said.

But research indicates a causal link between natural disaster intensity and frequency and insurance markets, he said. 

“It's become harder to ignore in recent years because climate shifts are accelerating,” said Brian Connolly, CEO of Feasibly, an economic feasibility consultancy. “Over the last 10 years, certainly the last five years, [insurers have] really started to pay attention because it was hurting their bottom line, their stock price.” 

Commercial insurance premiums finally saw some relief this year after an unexpectedly hurricane-free 2025. But in states like Alabama, insurers are pricing premiums based on more than just location and climate.

Alabama passed the Strengthen Alabama Homes Act in 2011. That laid the groundwork for Fortified, a program that provides homeowners $10K grants to upgrade their roofs to meet national insurance industry standards in exchange for insurance premium discounts. The Fortified program has since expanded to commercial and multifamily buildings, though financial breaks are limited in the commercial space. 

A study following 2020’s Hurricane Sally found that Fortified roof homes in Alabama had 74% fewer insurance claims and significantly lower loss costs than their unfortified counterparts. In May, the program had been implemented at more than 100,000 homes. 

“The critical mass of homes that have adopted the Fortified systems, they've led to fewer and lower claims,” Sanders said. “That's a situation in which the insurance industry likes it, homeowners like it, the state likes it, and it helps avoid loss in such a way that everybody can benefit.”

Apart from fortification, resilience legislation also promotes information sharing, which both insurers and investors like.

Investor interest is certainly sensitive to rising premiums, Lustick said, but “what's more important is visibility into the future trajectory. Investors really don't like volatility in the rate of change of costs.” 

Creating an information exchange helps all the players in a market accurately assess risk, allowing the market to function as it should, rather than imposing a “blanket tax” that punishes everyone, Connolly said. The average U.S. household is already absorbing $900 a year in climate-related costs, according to researchers from UCLA and the Massachusetts Institute of Technology.

Investment Drivers

The true impact of the information revealed from resilience legislation will be felt on a deal-by-deal basis, as is common in real estate development, Connolly said.

“There'll be some deals that will be harder to make pencil and others that might be easier now to make pencil,” he said. 

Resilient building also costs more upfront. For a typical home, a Fortified roof costs $1,000 to $5,700 more than a conventional roof.

But investing in resilience quickly pays off, Chopson said. Having to replace a roof and repair water damage on top-level units would seriously cut into a multifamily developer’s profit margins, he said.

“The resilience piece helps increase the amount of money that they're making because they're not having to do as much maintenance over the course of the hold period,” Chopson said.

Anecdotally, Alabama is seeing a negative impact on real estate due to those who don’t invest in Fortified roofs, said Travis Taylor, acting director of Alabama's Office of Risk and Resilience. Prospective homebuyers ask about them, and the widely used MLS system offers a checkbox for it.

“It could be on the same street, roughly the same square footage, same amenities, all those kinds of things. The homeowner will pick the Fortified,” Taylor said. “I have a younger brother who has a home in Loxley, Alabama, that he’s having trouble selling because he doesn’t have a Fortified roof.” 

These impacts help explain why real estate and private sector representatives have been involved in conversations from the get-go, Alabama Department of Insurance Commissioner Mark Fowler said. Including the private sector in the cross-agency resiliency council brings a real-life perspective, that of the people there when the rubber meets the road.

“We can't think, in government, that we have all the answers at all,” Fowler said. “We need to go to the people who are actually the practitioners out there, and do that, to really be able to do this right.”

Connolly expects to see the Alabama model replicated in other states as the private sector calls for a better understanding of disaster risk. 

“If the public sector, especially in a red state like Alabama, realizes, ‘Hey, we probably do need to have a united policy around this,’ we probably do need to understand that better,” Connolly said. 

The Fortified program has spread to North Carolina and Louisiana, and similar programs are underway or in development in Kentucky, Maine, Minnesota, Mississippi and Oklahoma, according to the Insurance Institute for Business & Home Safety. 

Meanwhile, the cost of a single natural disaster continues to approach and top $100B. Replicating Alabama’s concept across the U.S. could help make sure insurance remains affordable and available, Pew’s Sanders said.

The groups making those decisions should always include the private sector, as it could stop government officials from implementing changes that would ultimately hurt development, Connolly said.  

“You absolutely have to have those private sector people at the table who can say, ‘Hey guys, this is all great, but if you do X, Y and Z, nothing's going to get built in this state,’” he said.