The Impact of Natural Disasters on US Home Ownership

Sheldon, Tamara L.; Zhan, Crystal

doi:10.1086/705398

Cited by 18 publications

(10 citation statements)

References 41 publications

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“…Innovation is thus only one of several other local economic dimensions that might be adversely affected by hurricanes. Others include employment Groen et al (2020), neo-natal health Currie and Rossin-Slater (2013), home ownership Sheldon and Zhan (2019), and business activity Sydnor et al (2017). Moreover, the spillovers arising from patent activity, while generally shown to be favourable to close proximity, are likely to reach well beyond the usual size of a county Murata et al (2014).…”

Section: Discussion and Concluding Remarksmentioning

confidence: 99%

Creatively Destructive Hurricanes: Do Disasters Spark Innovation?

Strobl

2022

Environ Resource Econ

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We investigate whether disasters can lead to innovation. We construct a US county-level panel of hurricane damages using climate data, hurricane tracks, and a wind field model and match these to patent applications by the location of their inventor over the last century in the United States. We examine both general innovation and patents that explicitly mention the terms ’hurricane’ or ’storm.’ In line with the current literature that hypothesizes innovative activity driven by shocks, in particular innovation intended to mitigate future shocks, we find that hurricanes lead to temporary boost in damage-mitigating patents a few years after the event. However, we also show there is long-term, lasting over two decades, general reduction of innovation after a damaging storm. We conclude that hurricanes, and possibly other types of disasters, cannot be viewed as a ’benefit in disguise,’ and that these events are unlikely to generate longer-term beneficial dynamics in an adversely affected location.

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Section: Discussion and Concluding Remarksmentioning

confidence: 99%

Creatively Destructive Hurricanes: Do Disasters Spark Innovation?

Strobl

2022

Environ Resource Econ

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“…National-scale research indicates that disasters permanently increase housing rents in affected areas, with effects appearing 1-year post-disaster and not reversing (Dillon-Merrill et al, 2018); effects on housing prices are more ambiguous. These price effects are attributed to longterm increases in rental demand and hold true for in-migrating households (Dillon-Merrill et al, 2018;Sheldon and Zhan, 2019).…”

Section: Adverse Recovery Outcomesmentioning

confidence: 99%

Flood Recovery Outcomes and Disaster Assistance Barriers for Vulnerable Populations

Wilson¹,

Tate

Emrich

2021

Front. Water

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Disaster recovery spending for major flood events in the United States is at an all-time high. Yet research examining equity in disaster assistance increasingly shows that recovery funding underserves vulnerable populations. Based on a review of academic and grey literature, this article synthesizes empirical knowledge of population disparities in access to flood disaster assistance and outcomes during disaster recovery. The results identify renters, low-income households, and racial and ethnic minorities as populations that most face barriers accessing federal assistance and experience adverse recovery outcomes. The analysis explores the drivers of these inequities and concludes with a focus on the performance of disaster programs in addressing unmet needs, recognition of intersectional social vulnerabilities in recovery analysis, and gaps in data availability and transparency.

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“…This study concluded that secondary market relief caused a decline in the rate of mortgage defaults. Sheldon and Zhan (2019) used a comparative approach to gauge household responses to multiple types of natural disasters. Their finding indicated that households moving to an area that experienced a natural disaster 3–5 years earlier were less likely to own a home.…”

Section: Literature Searchmentioning

confidence: 99%

Bankruptcy filings, flooding, real estate prices and Leading Index

Brotman

2021

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PurposeFlood damage to uninsured single-family homes shifts the entire burden of costly repairs onto the homeowner. Homeowners in the United States and in much of Europe can purchase flood insurance. The Netherlands and Asian countries generally do not offer flood insurance protection to homeowners. Uninsured households incur the entire cost of repairing/replacing properties damaged due to flooding. Homeowners’ policies do not cover damage caused by flooding. The paper examines the link between personal bankruptcy and the severity of flooding events, property prices and financial condition levels.Design/methodology/approachA fully modified ordinary least squares (FMOLS) regression model is developed which uses personal bankruptcy filings as its dependent variable during the years 2000 through 2018. This time-series model considers the association between personal bankruptcy court filings and costly, widespread flooding events. Independent variables were selected that potentially act as mitigating factors reducing bankruptcy filings.FindingsThe FMOLS regression results found a significant, positive association between flooding events and the total number of personal bankruptcy filings. Higher flooding costs were associated with higher bankruptcy filings. The Home Price Index is inversely related to the bankruptcy dependent variable. The R-squared results indicate that 0.65% of the movement in the dependent variable personal bankruptcy filings is explained by the severity of a flooding event and other independent variables.Research limitations/implicationsThe severity of the flooding event is measured using dollar losses incurred by the National Flood Insurance program. A macro-case study was undertaken, but the research results would have been enhanced by examining local areas and demographic factors that may have made bankruptcy filing following a flooding event more or less likely.Practical implicationsThe paper considers the impact of the natural disaster flooding on bankruptcy rates filings. The findings may have implications for multi-family properties as well as single-family housing. Purchasing flood insurance generally mitigates the likelihood of severe financial risk to the property owner.Social implicationsNatural flood insurance is underwritten by the federal government and/or by private insurers. The financial health of private property insurers that underwrite flooding and their ability to meet losses incurred needs to be carefully scrutinized by the insured.Originality/valuePrior studies analyzing the linkages existing between housing prices, natural disasters and bankruptcy used descriptive data, mostly percentages, when considering this association. The study herein posits the same questions as these prior studies but used regression analysis to analyze the linkages. The methodology enables additional independent variables to be added to the analysis.

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The Impact of Natural Disasters on US Home Ownership

Cited by 18 publications

References 41 publications

Creatively Destructive Hurricanes: Do Disasters Spark Innovation?

Creatively Destructive Hurricanes: Do Disasters Spark Innovation?

Flood Recovery Outcomes and Disaster Assistance Barriers for Vulnerable Populations

Bankruptcy filings, flooding, real estate prices and Leading Index

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