selling flood RISK: NYC
New York City is facing a growing risk to heavy flooding from stormsurge and stormwater. In the past few years, flooding has caused major disruptions to our lives and our economy. All New Yorkers – renters and homeowners, young and old, new residents and life-long residents – are increasingly confronted with the risks posed by flooding to health, safety, education, jobs, mobility, and property. Nationally, extreme weather events have forced 2.5 million people from their homes, compounding their hardships and exposing them to new vulnerabilities.
Rebuild by Design analyzed the City’s 2023 property sales and learned that over 7,300 1-3 family homes sold last year, valued at $3.6 billion, were situated within or directly adjacent to the projected 100-year flood zones by 2050 for storm surges and stormwater. This finding indicates that many new homeowners may face the risk of flooding before the end of their 30-year mortgage.
While the property sales in areas likely to flood give us a glimpse of what’s to come, the risk is even greater. According to FEMA, approximately 40% of flood events occur outside of designated flood zones. The widespread impact of flooding was starkly demonstrated during Hurricane Ida in 2021, which affected nearly every neighborhood, and again in September 2023, when extreme weather events led to citywide flooding emergencies where heavy rainfall led to flooding in numerous neighborhoods that are not currently marked as flood-prone on the City’s 2021 stormwater maps.
You can view the press release here.
Table 1: Flood Risk Analysis of 1-3 Family Dwelling Sales in 2023
Source: Nathan Kensinger
FINDINGS
OVER $3.6 BILLION
of 1-3 family home sales in 2023 happened in areas that are highly likely to flood before the end of a 30-year mortgage.
7,344 OF ALL 1-3 FAMILY HOMES
sold in 2023 are located in or directly adjacent to the projected storm surge and stormwater flood zones for 2050. This translates to almost one out of five 1-3 family homes sold in 2023 is at risk of flooding.
STATEN ISLAND & BROOKLYN
recorded the highest percent of 1-3 family homes sold in flood risk areas at 31% ($703 million total value) and 26% ($1.38 billion total value) respectively.
By examining properties in storm surge and moderate stormwater flood zones, the research sheds light on the City’s vulnerability to flood risks, underscoring the importance of increased awareness and preparedness among stakeholders.
Borough-Specific Insights:
- Staten Island has the highest percentage of sales in flood-risk zones, where 31% of 1-3 family home sales, translating to 1,657 properties, have sales totaling approximately $703 million.
- Brooklyn follows closely, with 25.53% of its 1-3 family home sales at high risk of flooding, representing 2,591 properties and $1.38 billion in sales.
- Queens has 19% of its sales in the risk zone, with 2,566 homes totaling around $1.14 billion.
- Bronx shows a lower percentage, with 15.53% of its sales in flood risk zones, combining storm surge and stormwater zones into 315 sales, totaling over $202 million.
- Manhattan exhibits the lowest percentage of sales in flood risk zones at 11%, with 31 sales of 1-3 family homes in these zones, valued at nearly $196 million.
ACCORDING TO FEMA
40% OF CLAIMS
are made outside of the designated flood zones, where insurance is not mandatory.
1" water = $25,000 DAMAGE
An inch of floodwater can result in up to $25,000 in repairs, costs typically not covered by standard homeowners insurance.
4% HAVE FLOOD INSURANCE
Flooding is a widespread issue, affecting 99% of U.S. counties since 1996. Despite this, only a small fraction of homeowners, about 4%, currently have flood insurance.
RECOMMENDATIONS
- Enhance Flood Risk Disclosure: Amend New York State’s recently enacted flood disclosure law to mandate the disclosure of a home’s future flood risk and flooding history at the point of advertisement, rather than at the point of sale. This change would provide potential buyers with crucial information earlier, potentially influencing their decision-making process.
- Invest in Climate Resilient Infrastructure: Prioritize investment in community-wide, climate-resilient infrastructure, with a focus on blue-green solutions. These solutions aim to mitigate the impacts of sea level rise and stormwater flooding while offering multiple benefits, including improved health and recreational opportunities. Research by Rebuild by Design and Milliman suggests that every dollar invested in blue-green infrastructure could yield a return of $2.09 by 2050, in 82% of NYC.
- Improve Homeowner Financial Readiness: Considering that over 25% of claims under the National Flood Insurance Program (NFIP) originate from areas outside the designated high-risk flood zones, it is crucial to encourage all homeowners in New York City who have experienced or are at risk of experiencing flooding to consider flood insurance.
- Implement a Resilient Infrastructure Surcharge: To fund resilient infrastructure projects, levy a two-percent surcharge on certain types of Property and Casualty Insurance. For New York State, this approach, estimated to raise about $19 billion over ten years, could support projects such as shoreline fortification, wetland restoration, and stormwater management projects, reducing overall risk exposure.
- Support 1-3 Family Homeowners: Offer financial assistance, conduct educational campaigns, and streamline retrofitting processes to enhance the city’s flood resilience. The City should collaborate with local non-profits to continue this work, with a focus on high-risk areas and 1-3 family homes.
- Address Climate Gentrification and Displacement: To mitigate the risk of displacement, develop a structured buyout program that allows homeowners in high-risk areas to sell their properties to the government, while providing affordable housing alternatives nearby. Ensure these programs offer pathways for tenants to find affordable and safe housing options.
- Upgrade Notify NYC System: The NYC emergency notification system should be enhanced to provide real-time, geo-specific flood alerts directly to residents’ phones, without requiring an opt-in. Utilizing new technology to send alerts within a specific radius of a dangerous condition will ensure that critical information reaches those in immediate danger, enhancing public safety during flood events.
METHODOLOGY
To assess the risk of future flooding for properties sold in New York City, Rebuild by Design analyzed 2023 Citywide Annual Sales data for 1-3 family homes from the NYC Department of Finance (DOF). The study focused on identifying homes sold within 100 feet of two specific flood risk zones projected for the year 2050 to capture the true impact of flooding to its adjacent neighbors and compared it with:
- The 2050 Sea Level Rise 100-year Floodplain (stormsurge): Refers to areas with a 1% annual chance of flooding due to storm surge, based on predictions for the year 2050. These predictions take into account a 31-inch rise in sea level, as forecasted by the New York City Panel on Climate Change.
- The Moderate Stormwater Flood areas with 2050 Sea Level Rise Scenario (heavy rain): These areas are anticipated to face flooding due to increased rainfall from climate change, alongside the effects of sea level rise. Specifically, they are projected to encounter moderate stormwater flooding by 2050, based on predictions of a 31-inch rise in sea levels.
Source: Rebuild by Design
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