By: Trimmel Gomes
January 6, 2023
After a hurricane, according to a new study,
wealthier people tend to sweep into impacted communities, purchasing homes even
at the increased purchase price following a storm.
The study, "How
Hurricanes Sweep Up Housing Markets: Evidence from Florida," uses
data from county tax assessments, the National Oceanic and Atmospheric
Administration and the real-estate marketplace website Zillow to assess
housing-market conditions and population turnover in the Sunshine State from
2000 to 2016.
Study co-author and Resources
for for the Future fellow Yanjun "Penny" Liao said
they found home prices in hurricane-ravaged areas are 5% higher on average than
unaffected ones, which attracts people who could afford them.
"These people are more able to afford or absorb the higher prices that
comes with it," she said, "and if you think abut getting a mortgage,
there is usually a 20% down payment you need to put down, so you need higher
income to be able to absorb that price impact."
Liao said the temporary increase in home prices are likely due to the sudden
decrease in housing supply from storm losses. In areas where hurricanes
frequent, the impact is compounded. Florida lawmakers recently passed a slate
of reform measures to save its beleaguered property insurance market following
an onslaught of hurricanes and litigation.
Liao said the study could prove helpful in many ways including helping decision
makers in charge of disaster assistance programs, and pointing a spotlight on
the long-term impacts of gentrification.
"What's the equity implications for ongoing hurricanes or in the recovery
process," she said.
Liao noted that some hurricanes are milder than others and catastrophic
hurricanes such as Andrew or Katrina induce different dynamics. But overall,
their findings show housing demand didn't decrease, it simply attracted
wealthier inhabitants. They have called for future research on how that also could
impact low-income buyers and renters following a storm.
Content for this Post is provided by Florida News
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