New flood factor analysis
By: J. David Chapman/October 15, 2020
All the talk about climate change, floods, droughts, and recent hurricanes has led to a plethora of research projects and indexes, and now every property will get a publicly available flood risk analysis. First Street is remapping America’s flood risk in an effort to educate homeowners, buyers, and the greater real estate industry. It assigns a flood score to every property.
The year 2020 has seen a record-setting number of hurricanes and with it a large amount of flood damage. Even after hurricanes like Harvey in 2017, some homeowners in high-risk areas still do not have flood insurance. Today’s flood maps, which guide individual decisions on flood insurance, are backward-looking and don’t consider future weather predictions including effects of climate change.
That is changing because a nonprofit research and technology group, First Street Foundation, has launched an interactive website offering flood risk data on more than 142 million homes and properties across the county. First Street’s 80 scientists and researchers are remapping America’s flood risk with a new, forward-looking analysis of every property’s flood risk.
Assigning a flood score will likely have a huge effect on the national housing market. Realtor.com, one of the nation’s largest listing sites, has agreed to put those scores on all its listings. According to Matthew Eby, founder and executive director of the First Street Foundation, the integration of Flood Factor into Realtor.com’s platform will reach millions of people on a daily basis to enable an educated decision on buying or selling a home in relation to the past, present, and future flood risk.
The Federal Emergency Management Agency classifies nearly 9 million U.S. properties as having substantial risk, requiring them to carry federal flood insurance. Interestingly enough, First Street identifies nearly 70% more, or more than 14.5 million properties, with the same level of risk. For instance, it calculated that more than half the properties in Harvey’s path were at high flood risk and should have had insurance.
The difference is that First Street uses current and projected climate data, including sea-level rise. It also maps actual rainfall, which is increasing dramatically, and includes areas FEMA hasn’t mapped. It then assigns each property a flood score ranging from lowest risk of 1 to highest of 10. Real estate professionals should get ready to answer questions regarding this Flood Factor index, because they are coming.
J. David Chapman is an associate professor of finance and real estate at the University of Central Oklahoma (jchapman7@uco.edu).