Study explores potential of residential climate risk labels in the Dutch housing market

A new commentary in the Journal of City Climate Policy and Economy explores how residential climate risk labels could reshape the way Dutch homeowners, banks and municipalities deal with the growing impacts of flooding, heat, and drought.

Following the 2021 Limburg floods, Dutch policymakers began exploring whether risk labels—similar in form to familiar energy labels—could communicate a property’s exposure to climate hazards. The study, led by researchers from Delft University of Technology, Deltares, HKV, and MIT, investigates how these labels might improve awareness, steer investments, and influence housing affordability.

Through expert interviews, the authors find that while banks and insurers see potential for standardised labels to guide climate adaptation, major challenges remain. Climate risks differ widely—from localised flooding to heat and subsidence—and the underlying models often rely on conservative assumptions from the water management sector. As a result, open-source data can overstate risks by a factor of ten or more, complicating their use for labeling individual homes.

Equity concerns also loom large. Wealthier homeowners, especially in cities like Amsterdam and Utrecht, have more financial buffers to absorb potential value losses from poor climate ratings, whereas lower-income households in peripheral regions may not. The paper warns that without careful policy design, risk labels could exacerbate housing inequality or even spur climate gentrification.

Experts suggest that rather than focusing on property-level labels alone, area-based classifications might be more practical—aligning with how Dutch water authorities and municipalities currently manage adaptation. To be effective, labels must link clearly to action perspectives, helping households and developers understand what measures can reduce risks.

Ultimately, the authors conclude, residential risk labels could make climate risk management more transparent and data-driven, but only if developed collaboratively and embedded within wider adaptation policies. Without shared standards, clear guidance, and attention to social fairness, the labels risk becoming a fragmented tool.