Study Finds Redlined Areas Face Greater Flood Risk From Climate Crisis

Amid inadequate plans to reduce planet-heating emissions and climate scientists' repeated warnings about rising seas and more devastating extreme weather, Redfin revealed Monday that formerly redlined areas across the United States face a higher flood risk than regions that weren't deemed undesirable for mortgage lending under the racist practice.

"As climate change fuels rising sea levels and powerful storms, many of these neighborhoods lack the funding for the infrastructure upgrades necessary to combat flooding."
--Sheharyar Bokhari, Redfin

The real estate brokerage analyzed flood risk in 38 major U.S. metropolitan areas for new report, entitled, A Racist Past, a Flooded Future: Formerly Redlined Areas Have $107 Billion Worth of Homes Facing High Flood Risk--25% More Than Non-Redlined Areas.

In the 1930s, the federally sponsored Home Owners' Loan Corporation developed mortgage security maps that ranked communities with grades and colors: from A, the "best" for lenders, in green; to B, "still desirable," in blue; to C, "definitely declining," in yellow; to D, zones declared "hazardous," in red. While racial segregation of neighborhoods predated redlining, the lowest ranked areas generally had more Black families while white households dominated regions with higher ratings.

Though the Fair Housing Act of 1968 legally banned racial discrimination in housing, many neighborhoods once marked "hazardous" are still home to many people of color and low-income families. According to Redfin, 58.1% of households in redlined neighborhoods are non-white, compared with 40.4% of households in neighborhoods once declared desirable for lending.

"Decades of segregation and economic inequality shoehorned many people of color--especially Black Americans--into living in neighborhoods that are more vulnerable to climate change," said Redfin senior economist Sheharyar Bokhari. "Redlining kept home values in Black neighborhoods depressed, which in turn meant there was less money invested and reinvested in those neighborhoods for decades to come."

"The cycle continues today," Bokhari said. "As climate change fuels rising sea levels and powerful storms, many of these neighborhoods lack the funding for the infrastructure upgrades necessary to combat flooding."

"When major storms hit, Black communities are often forced to spend years rebuilding their homes instead of moving on and building home equity," the economist continued. "This perpetuates a cycle in which Black families lag financially."

From Hurricane Katrina in 2005 to Hurricane Harvey in 2017, communities of color and poorer residents were disproportionately affected long-term. Last year saw a record-breaking Atlantic hurricane season, and experts warn than human-caused climate change is expected to exacerbate the impact of future storms.

"Severe storms and hurricanes have a disproportionate effect on minorities in terms of damage done, life lost, and the amount of money that gets reimbursed," Bokhari toldBloomberg. "This project was done to look back at the legacy of redlining and link it to the outcomes we see today."

As Redfin found:

Nationally, redlined and yellowlined neighborhoods have a larger share of homes with high flood risk than greenlined and bluelined neighborhoods--but only by a small margin (8.4% versus 6.9%). The discrepancy is much larger in a handful of U.S. metros, including Sacramento, New York, Boston and Chicago.

In Sacramento, 21.6% of homes ($2.6 billion worth) in redlined and yellowlined areas face high risk of flooding today. That compares with 11.8% of homes ($716.8 million worth) in greenlined and bluelined neighborhoods. That 9.8-percentage-point difference represents the biggest gap of any metro in this analysis that had a larger share of homes at risk in redlined and yellowlined neighborhoods.

Nearly half of the households in Sacramento's redlined and yellowlined areas are occupied by people of color, compared with a third of households in greenlined and bluelined areas.

Behind the California capital is New York, where 13.8% of homes in redlined and yellowlined neighborhoods are at high risk of flooding, compared with 7.1% of homes in greenlined and bluelined neighborhoods. The next two metro areas with the greatest gaps were Boston, 13.8% to 8.7%, then Chicago, 12.6% to 7.9%.

"The discrimination that happened in the past may seem like it happened a long time ago, but it compounds," Redfin chief economist Daryl Fairweather toldCNN Business. "It's not like the historical practices that were discriminatory diminished in effect. It seems like they actually increase in effect."

Noting that over 600,000 properties face a "100-year flood risk, which is risk of one of these really catastrophic floods hitting them," Fairweather warned that future flood damage could worsen the nation's racial wealth gap.

In the face of rising seas and expected storm damage, Redfin and others have recommended federal investment in weather-proofing homes and relocation assistance. Fairweather said that "when we do provide assistance for people to move, we should encourage them or insist they move to places that won't be as affected by climate change."

Research published in 2019 suggested that banks are already shifting mortgages made riskier by the climate crisis to financial institutions backed by U.S. taxpayers--findings that, as the New York Times put it, "echo the subprime lending crisis of 2008, when unexpected drops in home values cascaded through the economy and triggered recession."

With lenders looking at long-term risks and some U.S. communities--from the coasts to the heartland--already dealing with floods, President Joe Biden is under pressure from climate experts and campaigners who backed his campaign to deliver on his promise to implement bold policies advancing environmental justice.