Neighborhoods targeted by discriminatory lending policies a century ago are now at disproportionate risk of suffering property damage due to flooding, a new study shows.
Homes in areas that were designated as undesirable for mortgage lending under the 20th-century practice known as redlining are not only more likely to have nonwhite owners, they also have substantially higher flood risk: $107 billion worth of homes in so-called redlined neighborhoods are at high risk of flooding, nearly 26% more than in neighborhoods that were considered desirable for lending, according to a Redfin analysis published Sunday.
Thanks, in part, to decades of disinvestment, redlined neighborhoods often don’t have the infrastructure to prevent or mitigate flooding, like levees, adequate sewer systems, or even green spaces, said Sheharyar Bokhari, a Redfin researcher. While climate change exacerbates the factors that cause flooding, the lack of investment in these communities increases the damage that flooding can cause.
This is what happened during Hurricane Katrina in 2005 and Hurricane Harvey in 2017, Redfin said. Four of the seven zip codes that suffered the costliest flood damage from Hurricane Katrina were at least 75% Black. After Hurricane Harvey, Black and Hispanic homeowners were about twice as likely as White ones to say that they had fallen behind on their mortgage payments.
Redlining has long hobbled the value of homes as well as outside investment in targeted neighborhoods, but the flood risk has intensified the issue, according to the Redfin report. “We show that there's some lingering effect of the racist policies of the past,” Bokhari said. “It's important for policymakers, as well as people living in these communities, to be aware of the history and how that goes into the discussion of where the money is distributed.”
There may be other knock-on effects ahead that further compound the consequences of redlining, Bokhari said. A study of 23.5 million at-risk properties in the U.S. released by nonprofit First Street Foundation in June found that there are 70% more properties with a substantial flood risk in the country than included in the Federal Emergency Management Agency’s (FEMA) Special Flood Hazard Areas.
These government flood zones complicate the mortgage lending process for any property within them, and as lenders realize the risk outside the FEMA zones, it will affect mortgages for those homes—as well as those who are eligible for them, Bokhari said. This likely means higher mortgage rates for people seeking homes within formerly redlined neighborhoods that are at risk of flood damage, as well as greater difficulty for anyone trying to sell a home in one of those areas.
Redfin based its research, in part, on the data collected by First Street Foundation.