According to the study, low-income homeowners could see up to 10 percent of their market value disappear in coming years, a blow for those least able to withstand one. “What we find is that lower-income households are more exposed to risk of price deflation in the housing market,” Jesse Gourevitch, a fellow at the Environmental Defense Fund and a co-author of the study, told Grist. “If that bubble were to burst those households could be at risk of losing home equity.
The fallout from climate-fueled flood risk extends beyond individual homeowners to their larger communities. The study showed that cities in northern New England, eastern Tennessee, central Texas, Wisconsin, Idaho, Montana, and many coastal areas could see their budgets shrink if the true value of homes in flood zones were taken into account and property tax revenues declined as a result.
Some states have passed laws that require sellers to disclose flood risk to buyers, which is a good way to hedge against the overvaluation described in the study. This week, the North Carolina Real Estate Commission to give homebuyers the right to information about flood risk. But twenty-one states, including Georgia and New York, still keep homebuyers in the dark. Implementing disclosure requirements in those states could help address the future financial risk of flooding.The study “raises a lot of moral questions for policymakers about who will bear the costs of these climate impacts,” Gourevitch said.
They will be over valued until the day water hits.