Graduated Flood Risks and Property Prices in Galveston County

Abstract

Our hedonic property analysis approach in Galveston County, Texas aims at estimating the impacts of flood risks and water-related amenities in a more systematic way. First, we interact distance to the nearest coastline and flood risk in order to account for these impacts acting together on housing sales prices in our coastal community. Second, we use more granular flood risk measure in the analysis compared to the existing literature. Results show that the hedonic price effect is dependent upon the distance to the nearest coastline, and as expected the distance effect varies by flood risk type. We find that in this coastal housing market properties located in the highest risk flood area, for up to nearly a quarter mile from the nearest coastline, actually command a price premium. A recent movement toward risk-based flood insurance premiums in the United States was deeply opposed by the real estate sector for fear of causing property values to steeply decline. This analysis sheds some further light on this depressed property value assertion highlighting its sensitivity to distance to the water.

Flood Risk and Salience: New Evidence from the Sunshine State

“…In addition, Zhang () finds flood‐prone homes sell for 5.9% less, on average, in the Fargo, ND‐Moorhead, MN metro area. However, some literature finds a positive price premium for high flood risk, especially in coastal areas including Bin and Kruse () in Carteret Country, NC and Atreya and Czajkowski () in Galveston, TX, even after controlling for water‐related amenities. Some have argued that the price premium may still reflect the difficulty in controlling for the amenity value of proximity to water (Bin et al, ).…”

The Cost and Affordability of Flood Insurance in New York City: Economic Impacts of Rising Premiums and Policy Options for One- to Four-Family Homes

“…Although the cost of flood insurance reduces property value when considered in isolation, other aspects of properties in high-risk flood zones may increase their value. Atreya and Czajkowski (2015) find that properties in Galveston County, Texas, that are closer to the coast command significantly higher prices, and that the rate at which this price premium decays as distance to the coast increases varies depending on flood risk.…”

The Impacts of Natural Disaster Risk Reduction Districts on Sales Prices of Neighboring Apartments

“…국내에 서도 자연재해로 인한 피해와 잠재적 위험지역이라는 인식 으로 인해 해당 지역의 부동산 가격이 감소된다는 결과가 도출되어 왔다 (Choi and Song, 2013). 반면 강변이나 산림 인접지역 등 자연재해 위험지역으로 지정된다고 하여도 복구 및 재해예방사업을 통해 해당 지역의 여건이 개선된 경우에는 재해위험 여부가 더 이상 부동산 가격에 영향을 미치지 않게 되며 (Lamond and Proverbs, 2006) 오히려 강변 이나 산림 인접지역이 경관 프리미엄으로 작용하여 부동산 가격과 양의 상관관계를 보이기도 한다 (Daniel et al, 2009;Atreya and Czajkowski, 2016;Jung and Yoon, 2017).…”

“…부동산 구매 시, 이러한 재해 이력과 미래 재발 위험을 고려하는 구매자들 이 증가하고 있으며 (Harrison et al, 2001), 재해 예방을 위한 지구지정은 대상지역을 재해지역으로 인식시킴으로써 지가 하락을 유발 할 수 있다 (Yoon, 2017). 하지만, 일부 연구들에 서는 재해위험지구 지정에 의한 정비사업 후의 긍정적인 결과를 주장하고 있으며, 오히려 지가상승에 기여할 수 있음 을 보여주고 있다 (Lamond and Proverbs, 2006;Daniel et al, 2009;NDMI, 2012;Atreya and Czajkowski, 2016;Jung and Yoon, 2017 (Kim et al, 2016). 또한 재해위험지구의 지정이 기존 피해지역 위주로만 지정되고 단위시설물 위주의 정비로 인하여 시설물간의 기능연계가 미흡한 상황이다 (Lee et al, 2018).…”