Why Are More People Moving To Disaster-Prone Areas?

Texas and Florida continue to attract many new residents, even though these states are highly exposed to flooding and wildfires. A recent report from the real estate company Redfin reveals that tens of thousands more people moved into the most flood- and fire-prone areas of the US last year.

In 2023, counties at high risk of wildfires saw 63,365 more people move in than out. This trend is largely driven by population growth in Texas counties. Similarly, counties with a high risk of flooding gained 16,144 new residents, with Florida leading this increase.

Conversely, counties that are less at risk of these natural disasters saw a decline in their populations. Redfin's data shows that 38,401 people moved out of low-fire-risk counties, and 6,892 moved away from low-flood-risk counties.

A Persistent Trend

This shift is not a new development. A 2021 Redfin report indicated that the 50 counties most at risk of extreme heat saw their populations grow by nearly 5% from 2016 to 2020. The pandemic accelerated this trend, with people leaving large cities for more affordable, yet riskier, areas. The influx into flood- and fire-prone counties more than doubled in 2021 and 2022, according to Redfin.

Many people prioritize affordability and lifestyle benefits over long-term risks. Moving from costly coastal cities to more affordable areas in the Sunbelt often means facing higher risks from natural disasters. "People naturally focus on immediate benefits like lower living costs and attractive views, while underestimating long-term risks such as property damage," said Daryl Fairweather, Redfin's chief economist.

However, the trend of moving to high-risk areas might be slowing. The number of people relocating to the most flood-prone areas has decreased since 2022, and even areas like Houston, prone to storms and flooding, are seeing population losses despite lower real estate prices.

Impact Of Extreme Weather

The rise in extreme weather events is influencing migration patterns. These events are also driving up home insurance costs and causing some insurers to withdraw from high-risk regions. For instance, State Farm and Allstate have stopped accepting new clients in California due to increasing risks.

Most Americans prefer to avoid risky areas. A recent Redfin survey found that 57% of house hunters consider low risk of natural disasters a "must-have," while 28% are willing to accept higher risks for affordable housing.

Lower-income Americans often live in areas more vulnerable to extreme weather. In many cities, lower-income and predominantly Black neighbourhoods face greater risks from heat, flooding, and hurricanes. A 2023 McKinsey analysis found that Black residents in Southeastern states are more likely to live in high-risk areas.

The Brookings Institution suggests several measures to address this issue. They recommend that Congress and the Federal Housing Finance Agency work with mortgage lenders and insurers to factor climate risk into rates, charging more for properties in high-risk areas. State and local governments should also improve transparency about climate risks and adjust property taxes accordingly.

Reforming zoning and land-use regulations could encourage development in safer areas and reduce sprawl into high-risk zones. Local policymakers should carefully plan infrastructure investments to either discourage or encourage moves to certain areas based on their climate risks.