Climate and Real Estate Initiative

Adapting to Natural Disasters through Better Information

Principal Investigators: Seunghoon Lee (lead)
Year: 2022
Topics: Climate and Sustainable Real Estate, Urban and Real Estate Economics
  • Properties with flood risk lose part of their value when potential buyers become aware of it through the Home Seller Disclosure Requirement.
  • All else equal, home buyers seem to walk away from risky properties. Listed houses in a high-flood-risk area tend to remain vacant for a longer period when flood risk is disclosed.
  • With fewer people in a high-flood-risk area, the disclosure policy reduces flood damage.
  • The market contributes to reducing damage from natural disasters by promoting autonomous adaptation. Policies that facilitate information flow can help leverage market forces.

Adapting to Natural Disasters through Better Information