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How wealthy white communities bounce back from disasters like Ian faster

Hurricane Ian has already caused at least 34 deaths, and early numbers suggest that financial losses could hit $40 billion. But these numbers tell only part of the story. What they don’t reveal is how Ian will lead to growing inequality, and heighten racial disparities.

Research from across the United States shows that climate-related disasters have made our communities more unequal. Put another way, climate change is increasingly becoming a cause of inequality. Part of the problem is our existing recovery policies, which do not distribute post-disaster aid in fair or equitable ways. For example, Black households affected by disasters have often received less aid from the Federal Emergency Management Agency compared with their white counterparts, and in communities that have gotten more FEMA aid, the racial wealth gap has grown

More recovery dollars have been invested in white communities, which has helped housing values bounce back there.

These disparities stem, in part, from different rates of post-disaster property inspections conducted by FEMA across racial groups, as well as the burden of the application process in applying aid. Overall, more recovery dollars have been invested in white communities, which has helped housing values bounce back there. 

Typically, home values decline in the immediate aftermath of a flood. After Superstorm Sandy hit New York, there were large drops in home values for properties that flooded. Even properties that didn’t flood during the storm but were in nearby flood zones saw a significant decrease in values, demonstrating how the housing market can be quite reactive to climate-related disasters. 

But the negative impact of disasters on home prices is not experienced evenly. Lower-priced homes see more precipitous drops in value, as do homes in higher-poverty neighborhoods and in neighborhoods with fewer white residents. And these values stay lower for longer.

Losing home value can have devastating consequences. It leaves homeowners at greater risk of foreclosure and with less ability to borrow, which can even affect their children’s education, since many families rely on home equity to finance college.

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Ultimately, lowered home values mean less wealth to pass on to future generations. If Florida’s nonwhite communities see their home values lowered more steeply and for longer time periods than their white counterparts do, Hurricane Ian will exacerbate an already wide racial wealth gap.

As home values are further affected by climate-related disasters, that will also shape who can most easily move away from vulnerable locations. Lower home values are associated with lower mobility, since they can make it challenging to pay off the existing mortgage and cover a new down payment. So homeowners in Florida’s most vulnerable Black and Latino neighborhoods will likely have less ability to sell and move after Hurricane Ian.

At the same time, it’s likely that insurance premiums will increase, creating more financial strain and forcing households to make trade-offs in how they spend their money. When homeowners are underinsured or not insured at all, it also makes it incredibly difficult to repair a home with significant wind or flood damage. (In Florida counties in the path of Hurricane Ian, less than 48 percent of homeowners in the federally designated floodplain have flood insurance coverage.) 

In general, residents who have higher valued homes are more likely to purchase flood insurance. This means many homeowners in disadvantaged neighborhoods are less likely to be insured and will have far fewer resources to repair their homes, another reason home values will remain low even if values in the broader community rebound. 

This is what we found in Friendswood, Texas, a middle-class, majority-white suburb of Houston that flooded during Hurricane Harvey. We interviewed dozens of homeowners over the two years following the storm. Only about half of the flooded homeowners we spoke to had insurance when Harvey struck, in part because they had scant information about their risk. 

As a result, some could not fund their repairs and were still living without floors or interior walls two years after the storm. These residents felt stuck relative to neighbors who had insurance.  Some wanted to move away from Friendswood — which they believed would flood again — but could not afford to.

Indeed, homeowners whose home values rebound more quickly — again, those in whiter and wealthier communities — can more easily sell their homes and move away from vulnerable places. So as wealthier homeowners move into less vulnerable — and previously less desirable — inland communities, we may see more climate gentrification, with longtime residents of these safer locales displaced. 

Put another way, the growing inequality spurred by disasters is multifaceted and long-term. First, there have been racial and class disparities in FEMA assistance and differences in the impact on home values. And then, there may be a second phase of growing inequality if more resourced households move away from vulnerable homes and push out less affluent residents in inland communities.

Without changes to make current recovery policies more equitable, including strategic large-scale investments in managed retreat from vulnerable places, climate-related disasters like Hurricane Ian are increasingly going to be a cause of inequality, driving differences in wealth, mobility and vulnerability in future disasters.