Rising Sea Levels and Sinking Property Values: The Effects of Hurricane Sandy on New York's Housing Market

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E S Rising Sea Levels and Sinking PropertyIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. Are coastal cities adjusting to rising sea levels? This paper argues that large-scale events have the potential to ignite the process. We examine the effects of hurricane Sandy on the New York City housing market. We assemble a large plot-level dataset with rich geographic data on housing sales in New York City for the period 2003-2015, along with information on which building structures were damaged by the hurricane, and to what degree. Our difference-in-difference estimates provide robust evidence of a negative impact on the price trajectories of houses that were directly affected by Sandy. Interestingly, this is also the case for houses that were not damaged but face high risk of coastal flooding. Our results suggest that Sandy has increased the perceived risk of living in those neighborhoods. We also show that the negative effects on housing prices appear to be highly persistent. JEL Classification:H56, K42, R33

Local Public Finance Dynamics and Hurricane Shocks

“…These employment effects echo prior findings by Belasen and Polachek (2009), who find major storms decrease county employment by 4.7% on average. In the last column, we find that home values decline immediately following hurricane exposure, as well as in the 6-10 years after exposure, corroborating prior work by Hallstrom and Smith (2005); Davlasheridze et al (2017); Ortega and Tas . pinar (2018); Muller and Hopkins (2019) and Boustan et al (2020).…”

“…For instance,Hallstrom and Smith (2005),Davlasheridze et al (2017),Ortega and Tas . pinar (2018),Muller and Hopkins (2019), andBoustan et al (2020).…”

Gresilient supplier assessment and order allocation planning

“…This event also interrupted the automotive sector and retail supply chains in the UK (Hall, 16 Apr 2010). Recently, hurricane Sandy led to massive disruptions in US supply networks (Ortega and Taṣpınar, 2018;Torabi et al, 2015). Therefore, designing a resilient supply chain is necessary to protect a business from unexpected events (Sáenz et al 2018).…”

The Impact of Sea Level Rise on Real Estate Prices in Coastal Georgia

“…Houses within a quarter mile of the nearest coastline sell at a price premium despite having higher flood risks. Ortega and Taspinar (2018) discover that housing prices significantly dropped after Hurricane Sandy in New York City. Overall, they find a 9 percent reduction in property values in storm-affected areas compared with similar houses outside the storm.…”