The increasing impacts of climate change are presenting numerous challenges globally, with one of the most pressing being the heightened risk of flooding due to rising sea levels and more intense rainfall patterns. However in many countries, among which the Netherlands, a significant portion of residential properties are at risk of flooding—a risk that is often underappreciated or overlooked by homeowners. The primary focus of this thesis is to explore the potential introduction of a flood risk disclosure policy, referred to as the "Climate Label," and its implications for real estate development practices.
By making flood information readily available, the policy aims to influence market values and guide investment decisions, potentially encouraging more resilient housing developments. The central question of this study examines how such a policy might affect the decision-making processes of real estate developers and, consequently, the distribution of flood risks across new residential constructions.

The exploration of this topic is timely and significant, given the scarcity of existing literature on the impact of flood risk information policies on housing supply and developer behavior. Real estate developers, particularly those in the private sector, play a crucial role in the construction of new housing and their profit-driven motives make their responses to such policies particularly insightful for understanding broader market dynamics.

This research employs an Agent-Based Modeling (ABM) approach to simulate the interactions within the housing market, developer decision-making, and assess the potential outcomes of implementing the Climate Label. Moreover, interviews with real-estate developers are conducted to achieve a deeper understanding of their decision-making, their current perspective of building flood-resilient housing, and how a Climate label would influence such.

The model results it can be concluded that a housing value shift due to flood risk disclosure can cause a change in the development patterns of new residential houses. However, the distribution of flood risks is highly dependent on the magnitude of the price shift, whether developers perceive it as a gain or loss, and the reference point they use in their project decision-making to assess gains and losses.