A visionary financial and land use planning model is being trialled in South East Queensland to manage the relocation of homes exposed to high natural hazard risks such as flooding, bushfire and coastal inundation.
The solution will allow owners of at-risk homes to transfer climate and financial risk to a new corporate body designed to manage natural hazard risks over the long-term, and aims to encourage increased urban development in safer, low risk locations.
The Meridian Urban Settlement Adaptation and Financing Delivery (SAF-D) pilot is led by Griffith University's Climate Action Beacon in partnership with Meridian Urban, and will use real-world case studies and financial modelling simulations to confirm the viability and efficacy of the program.
Climate Council estimated around 652,000 Australian properties faced escalating natural hazard risks in 2025, and that number is projected to rise in following years.
These properties may face catastrophic financial risk if insurance and financing become unavailable or unaffordable, or when weather events make these homes unliveable.
Professor Robert Bianchi from Griffith's Department of Accounting, Finance and Economics said the research project aimed to minimise ongoing government liability and expenditure resulting from natural hazard events in the future.
"The model encourages the private sector to directly and indirectly invest in natural hazard adaptation," Professor Bianchi said.
"It incorporates public and private financing and investment, designed to deliver a 'managed retreat' solution for vulnerable households.
"The goal is to remove all at-risk properties over time from these climate risk 'red zones', without the present owner losing out financially -in a way that limits ongoing government expenditure on reconstruction and rebuilding."
The permanent removal of some at-risk homes will reduce overall housing availability, so the program includes a plan to incentivise the construction of new housing in 'green zones' which are less prone to climate risk.
Meridian Urban Company Director Stephen Dredge said the SAF-D model seeks to fill a massive gap in policy and planning, and it will help to address two of Australia's key policy issues - the housing crisis and the climate crisis.
"There are no public policy tools available to government that actively support homeowners and residents to avoid the increasing impacts of natural hazard risk in towns and cities, and there is no policy to actively incentivise new urban development in safer locations," Mr Dredge said.
"There are currently no integrated financial or land use planning tools that can address this emerging national systemic risk, and this model is the first of its kind to incentivise private sector investment through an urban development-led managed retreat system.
"The SAF-D model would support communities and individual community members to make decisions that minimise the risks to safety, property and finance that are inherent in places routinely impacted by disasters.
"By encouraging the private sector to finance the purchase of at-risk properties, the model incentivises and subsidises the creation of new homes in lower risk areas, which can actively contribute to supporting housing affordability outside of hazard areas."
Climate Action Beacon Director Professor Brendan Mackey said approximately one in 25 properties across Australia will be 'high risk' and uninsurable by 2030.
"No level of government today or in the future will have sufficient capital to purchase all properties at high risk across Australia," Professor Mackey said.
"Despite government efforts to mitigate disaster risk, these households will likely face insurmountable challenges of managing both climate-risk and financial-risk over time.
"Furthermore, these Australian households don't possess the appropriate skills, insurance products or financial capability to adequately manage these complex issues for themselves and their family members.
"This research will confirm whether there is a viable solution that could be employed to help people in this situation and ultimately make safer places for us to live." 'Private sector-led financial innovation for managed retreat of settlements exposed to natural hazard risk: A proof of concept pilot' project was undertaken in collaboration with local South East Queensland governments, Queensland Government agencies and industry organisations, and is funded by the National Emergency Management Agency (NEMA) via the Disaster Ready Fund (DRF).
