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Flood damage has severe and long-term repercussions for households and communities, and continued housing development in floodplains escalates damages over time. Policies and interventions to reduce damage depend on assumptions about housing stock and residents, but assessments of flood exposure to date largely focus on community-scale characteristics at a single point in time, masking potential within-community differences and their evolution through time. We measure residential development in the floodplain nationwide over time to characterize the type and value of U.S. floodplain housing stock and to assess how new development contributes to flood exposure. Over 4M U.S. residences built from 1700 to 2019 (4.8% of all residences built during that time) are located within current regulatory floodplains. These residences are concentrated at the affordable and expensive extremes of the housing value spectrum, reflecting deep differences in the social vulnerability of floodplain residents. Floodplain housing stock often differs substantially from the local market, with coastal floodplains containing relatively expensive housing and inland floodplains containing relatively affordable housing. New housing development has not occurred equally across these contexts. In the past two decades, more floodplain development has occurred in communities with relatively expensive floodplain housing, and mobile home construction in floodplains has slowed. The bifurcated patterns in floodplain housing, across values and geographies, demonstrate the importance of considering the specific population at risk and how it may differ from the broader community when tailoring flood risk management approaches.
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Unpriced climate risk and the potential consequences of overvaluation in US housing markets
Abstract Climate change impacts threaten the stability of the US housing market. In response to growing concerns that increasing costs of flooding are not fully captured in property values, we quantify the magnitude of unpriced flood risk in the housing market by comparing the empirical and economically efficient prices for properties at risk. We find that residential properties exposed to flood risk are overvalued by US$121–US$237 billion, depending on the discount rate. In general, highly overvalued properties are concentrated in counties along the coast with no flood risk disclosure laws and where there is less concern about climate change. Low-income households are at greater risk of losing home equity from price deflation, and municipalities that are heavily reliant on property taxes for revenue are vulnerable to budgetary shortfalls. The consequences of these financial risks will depend on policy choices that influence who bears the costs of climate change.
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- Award ID(s):
- 2103754
- PAR ID:
- 10397404
- Publisher / Repository:
- Nature Publishing Group
- Date Published:
- Journal Name:
- Nature Climate Change
- Volume:
- 13
- Issue:
- 3
- ISSN:
- 1758-678X
- Page Range / eLocation ID:
- p. 250-257
- Format(s):
- Medium: X
- Sponsoring Org:
- National Science Foundation
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