Sustainability, Real Estate, and Mortgages
Paper Session
Saturday, Jan. 3, 2026 8:00 AM - 10:00 AM (EST)
- Chair: Piet Eichholtz, Maastricht University
Green Mortgages
Abstract
Using data on the universe of mortgages on offer in the United Kingdom, we study the prevalence and features of green mortgages, used for the financing of energy-efficient properties. We uncover substantial heterogeneity in their financial benefits. Products with preferential rate provide discounts of 9-35 basis points (annual gains of £180-700), while those with upfront cashback have annual equivalent gains of £49-56. The former (latter) are more prevalent in the investor (owner-occupied) segment of the mortgage market. We exploit market features to show that green mortgages with cashback offers are used for customer acquisition. We do not find support for the hypothesis that the benefits of green mortgages are due to lower financing risk.Climate Risk, Soft Information, and Credit Supply
Abstract
We study the impact of climate risk on credit supply using a unique loan-firm-bank-level dataset on all wildfires and corporate loans in Spain. Our findings reveal a significant decrease in credit following climate-driven events. This result is driven by diversified (outsider) banks, which reduce lending significantly to firms in affected areas. In contrast, geographically concentrated (local) banks, with superior soft information access, reduce credit to opaque firms to a significant lesser extent without increasing risk. Moreover, employment declines in affected areas where local banks are absent.Nature’s Premium: Impact of Biodiversity Regulatory Uncertainty on House Prices
Abstract
Biodiversity loss has potentially catastrophic consequences, prompting ambitious conservation efforts. In this paper, we exploit the uncertainty emanating from the adoption of “30 by 30,” which seeks to protect 30 percent of land by 2030, alongside a novel geographic biodiversity risk measure—constructed by combining observational data on endangered species with machine learning, to study the impact of policy uncertainty on house prices. We validate our measure, showing that it predicts future government action to protect biodiversity. Using a difference-in-difference design, we find that a one standard deviation increase in biodiversity risk at the county level leads to an increase in house prices by 0.7% percent. Our analysis shows that the price effect is driven by counties with the lowest supply constraints and the highest demand for nature-related amenities. Evidence from HMDA and land value data further support our decomposition. Our results highlight that land protection for biodiversity may be less costly than anticipated, as it provides amenity benefits to surrounding communities.Discussant(s)
Erkan Yonder
,
Concordia University
Nils Kok
,
Maastricht University
Dragana Cvijanović
,
Cornell University
Stefany Burbano
,
Maastricht University
JEL Classifications
- G2 - Financial Institutions and Services
- Q5 - Environmental Economics