The implication of the increase in storm frequency and intensity to coastal housing markets

Abstract

This paper analyzes the effects of storm frequency and intensity on housing values in Miami-Dade County over the last three decades. We found that higher storm exposure accelerates the housing price discount caused by augmented flood risk. The adverse effects of frequency and intensity have different impacts on perception of flood probabilities. Storm frequency affects housing prices in lower flood risk areas, whereas intensity influences the market in the higher risk zone, due to the different risk perceptions between the two factors. The results shed light on how increases in storm frequency and intensity impact the dynamics of flood risk perception in different floodplains on the coastal housing markets, suggesting future directions of flood prevention policies. Our findings highlight that one additional hurricane event is associated with a housing price discount of 1.3%. This adverse impact of frequency increases to 2.0% in the 500-year floodplain zones, while higher storm intensity reduces housing values in the 100-year floodplain zones by 1.5%.

The color of water: Racial and income differences in exposure to floods across US neighborhoods

“…The growing threat to property from flooding has been of particular recent interest to real estate economists. A substantial international literature has developed related to how real estate markets capitalize expected flood risk (Baldauf et al., 2020; Bernstein et al., 2019; Bin & Polasky, 2004; Bin et al., 2008; Eves, 2002; Hamid et al., 2020; Hino & Burke, 2020; Jongman et al., 2014; Lamond et al., 2010; Murfin & Spiegel, 2020; Pilla et a., 2019; Posey & Rogers, 2010; Shr & Zipp, 2019; Wu et al., 2021; Yi & Choi, 2020; Zhang & Leonard, 2019); how prices respond to flooding and other new information about flood risk (Athukorala et al., 2016; Daniel et al., 2009; Giglio et al., 2021; Kim & Peiser, 2020; Lamond & Proverbs, 2006; Muller & Hopkins, 2019; Pryce et al., 2011; Rajapaksa et al., 2016; Yeo, 2003); and the influences of flood insurance (Belanger & Bourdeau‐Brien, 2018; Gibson & Mullins, 2020; Morgan, 2007; Reich et al., 2020). By contrast, studies concerning who is most likely to experience flooding have been (as we amplify below) relatively few, limited geographically, afflicted by measurement shortcomings, and inconsistent in findings.…”

Residential Buildings’ Real Estate Values Linked to Summer Surface Thermal Anomaly Patterns and Urban Features: A Florence (Italy) Case Study

“…Among the many heat-related effects that we are unfortunately already experiencing (impacting the human health, energy consumption, and water demand, to name a few), others will have an effect in the medium-to long-term. From the beginning of the 21st century, much attention has been paid to the impact on the real estate price of some climate-change-related extreme events, such as destructive storms, sea level rise, floods, and wildfires [13][14][15][16][17][18]. However, very little has been addressed regarding the potential effect of intra-urban thermal anomalies on the residential housing market [19], representing an emerging problem with potential impacts on local economies.…”