New York Fed: Tri State flood risk on par with Gulf Coast

Nearly
a
million
residential
properties
across
the
New
York
Tri
State
region
carry
the
same


severe
flood
risk
as
properties
in


storm-weary
Florida,
Louisiana
and
Texas,
according
to
a
new
analysis. 

Even
homes
in
inland
metros
like
Buffalo
and
Newark
face
that
significant
risk,
the
Federal
Reserve
Bank
of
New
York
said


in
a
report
this
week.
In
all,
just
over
4
million
people
across
939,760
residential
properties
in
Connecticut,
New
Jersey
and
New
York
were
determined
by
the
Bank
to
be
in
danger.
Over
400,000
of
those
structures
are
in
low-to-moderate
income
communities. 

The
findings
come
a
week
after


Hurricane
Helene
devastated
areas
far
inland
across
the
South,
including
millions
of
homes


without
flood
insurance.
The
Tri
State
region
is
familiar
with
severe
weather
events,
and
has
taken
years
to
recover
from
storms
like
Hurricane
Sandy
in
2012
and


Hurricane
Ida
in
2021. 

The
New
York
Fed
used
CoreLogic’s
structure-level
climate
risk
data.
It
determined
an
average
annual
loss,
representing
the
damage
a
property
can
sustain
in
a
given
year
due
to
flooding,
as
a
share
of
its
insurable
value.
The
identified
Tri
State
properties
have
AALs
over
the
national
75th
percentile,
lumping
them
with
the
country’s
most
climate-afflicted
states. 

Flash
flooding,
heavy
rainfall
and
overflowing
rivers
damage
both
properties
and
infrastructure,
weaken
property
values,
send
insurance
premiums
soaring,
and
hurt
both
consumer
and
investor
finances.


Homeowners
insurance
has
become
a
prominent
issue
for
both
borrowers
and
lenders,
and
has
already
impacted


origination
activity
in
Florida. 

In
the
Tri
State
region,
14%
of
all
multifamily
structures
and
12%
of
all
single-family
buildings
fall
into
the
high-risk
category,
the
study
found.
That
equates
to
1.6
million
households
or
just
over
4
million
people,
an
estimate
assumed
combining
data
from
the
U.S.
Census
Bureau’s
American
Community
Survey.

The
specific
communities
with
the
most
people
at
risk
are
Brooklyn
and
Queens,
with
a
combined
276,124
households
in
the
75th
percentile
of
AAL.
Meanwhile
New
Jersey
has
the
most
people
facing
elevated
flood
risk
located
in
low-to-moderate
income
census
tracts,
with
444,880
residents.

The
Garden
State
also
surpasses
New
York
City
with
over
1.1
million
people
overall
living
in
homes
with
greater
flood
risks.
That
risk
profile
is
split
more
evenly
between
multifamily
and
single-family
residences,
whereas
most
of
the
910,037
New
Yorkers
at
risk
live
in
multifamily
units. 

A
few
smaller
Tri
State
towns
face
immense
threat
of
rising
waters:
Long
Beach,
New
York
and
Keansburg,
New
Jersey
have
over
90%
of
their
properties
in
the
high-flood
zone.
Across
the
Hudson
River,
around
half
of
all
households
in
Hoboken
are
at
elevated
danger
of
both
coastal
and
inland
flooding,
the
report
found. 

The
New
York
Fed
emphasized
the
risk
for
rental
properties
among
multifamily
stock,
for
both
owners
and
residents.
Owners
have
to
pay
for
insurance
and
reconstruction,
and
aren’t
obligated
to
keep
rents
unchanged
or
rehouse
existing
residents.
Renters
already
face
increasing
monthly
payments
and


relatively
limited
supply. 

“This
explains,
in
part,
why
renter
status
has
been
found
to
be
a
key
indicator
of
disaster
vulnerability,”
the
reports’
authors
wrote.