Growing Returns

Selected tag(s): flood resilience

Why every state needs a Chief Resilience Officer

By Makenna Cavanaugh, Federal Affairs Intern, Climate Resilient Coasts and Watersheds

Communities across the country are grappling with the whiplash of flooding and extreme storms as the frequency and severity of climate hazards reach unprecedented levels. From economic instability to safety hazards, to inequities and the destruction of entire neighborhoods, these events have proven to have devastating and lasting impacts. And one thing is made clear – we need real, robust solutions and we need them across all levels of government to protect communities and promote long-term sustainability.  

Some states have acted by establishing a Chief Resilience Officer (CRO), a government position that is responsible for spearheading resilience coordination and bringing together stakeholders to build, develop and implement resilience strategies. Creating a state-level CRO helps leaders effectively plan at the state, county and municipal level and is a major step forward in protecting communities from future climate impacts. 

Currently, 21 states have an established resiliency office or position at the state level. Among them, 11 states have a CRO.  Read More »

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Climate-driven floods could displace millions of Americans. Local buyout programs could help them relocate.

By Kelly Varian, Master of Public Affairs Student at UC Berkeley

Flooding is the most frequent and costly natural disaster in the United States, causing over $30 billion in damage annually, with disproportionate effects on low-income communities. With climate change exacerbating flood risk and population growth continuing in high-risk areas, over 40 million Americans living along rivers and inland floodplains, along with 13 million more on the coasts, could see their homes inundated with water by the end of the century. 

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Prioritizing communities and nature in the nation’s largest Army Corps project in New York-New Jersey Harbor

A plan for the largest transformation of New York City’s and northern New Jersey’s waterfront since the Robert Moses era has been proposed by the U.S. Army Corps of Engineers (USACE). It’s called the New York-New Jersey Harbor and Tributaries Study and it was introduced to the public to address flooding and storms like Hurricane Sandy. At stake is the future of more than 84 miles of waterfront and waterways in the metropolitan region and an area that supports 16 million people.  

New York City

New York and New Jersey residents must determine if this $52 billion dollar plan aligns with the future they want. Addressing flood risks is a step in the right direction, but as it stands today, the current proposal does not reflect the priorities of many communities and environmental organizations. With the impacts of climate change already in motion, we simply cannot afford to get this wrong.  Read More »

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Five recommendations for integrating equity into benefit-cost analysis for flood risk management

When making any decision, we often find ourselves weighing the pros and cons of an action – the benefits versus the cost. The official practice, referred to as “benefit-cost analysis,” is not only used by individuals and businesses, but also by the federal government when determining funding for a program or initiative. In simple terms, when the benefits exceed the cost of an investment, federal funding may be made available.

flooding

But oftentimes benefit-cost analysis doesn’t look at the full picture, neglecting to consider who benefits from an investment and who bears the brunt of its cost. This is true when examining the nation’s flood risk management strategy. Historically, the annual loss from flood damage disproportionately impacts low-income communities and communities of color, leaving those with fewer resources less protected.

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New research shows the potential consequences of unpriced flood risk in US housing markets

No region of the US is unaffected by the impacts of climate change. From recent flooding in California to impending sea level rise along the East coast, the increased risk of climate disasters has made every community more vulnerable.

New research published in Nature Climate Change led by EDF economists finds that increasing flood risk due to climate change pose threats to the stability of the US housing market. Published with researchers from First Street Foundation, Resources for the Future, the Federal Reserve, and several academic institutions, our research revealed that the real estate located in flood zones is overvalued by US$121–US$237 billion due to unpriced climate risk.

Growing flood risk—and a growing bubble in the housing market

pricebubblegraphic

Currently, over 14.6 million properties in the United States face at least a 1% annual probability of flooding, with expected annual damages to residential properties exceeding US$32 billion. The increasing frequency and severity of flooding under climate change is predicted to increase the number of properties exposed to flooding by 11% and average annual losses by at least 26% by 2050.

The increasing risk and cost of flooding due to climate change has led to growing concerns that housing markets are mispricing these risks, thus causing a real estate bubble to develop.

Supported by a grant from the National Science Foundation’s Megalopolitan Coastal Transformation Hub, the study is the first-ever national-scale assessment of climate risk to property values, using the property-specific, climate-adjusted First Street Foundation flood model. To do this, we evaluated the extent to which property values already account for the costs of flooding. We then compared those price discounts with property prices that fully capture expected damages from flooding over the next 30 years.

We found a nearly $200 billion dollar bubble.

The cascading and inequitable impacts of unpriced flood risk

Accurately pricing the costs of flood in home values is needed to support climate adaptation and to remove perverse incentives for development in floodplains. However, doing so could have negative financial impacts on households, communities, and municipalities. In the event that property values fully account for exposure to climate risk, our results raise concern that:

  1. Low-income communities are particularly vulnerable. The extent to which flood risk is not priced into housing values varies based on neighborhood and state characteristics, with low-income households at a higher risk of losing home equity . Such inequities have the potential to exacerbate wealth gaps in the US.
  2. Coastal housing markets are particularly vulnerable. In general, we find that 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. In particular, properties in Florida are overvalued by more than US$50 billion.
  3. Municipalities that are heavily reliant on property taxes for revenue could experience budgetary shortfalls if housing prices are corrected for flood risk. Cities and towns concentrated in coastal counties, as well as inland areas in northern New England, eastern Tennessee, central Texas, Wisconsin, Idaho and Montana, are particularly vulnerable to losing revenues in the event of a pricing correction. In these areas, local governments may need to adapt their fiscal structure in order to continue to provide essential public goods and services.

We need efficient and effective climate change policies

The cost of unrealized flood risk in the US real estate market is an increasing threat to economic stability for households, communities and municipalities. Despite clear need for improving flood risk communication via updated flood maps, broadening flood risk disclosure laws at the state and federal level, and increasing investment in flood risk reduction, the realization of these risks will largely depend on policy choices that influence the distribution of flood-related costs in society. In effect, these policy choices will require decision-makers to grapple with moral questions about who should bear the costs of climate-related disasters.

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