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The Impact of Natural Disasters on US Home Ownership

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  • Tamara L. Sheldon
  • Crystal Zhan

Abstract

Natural disasters are predicted to become more severe with climate change. Research on impacts of natural disasters on housing markets is mostly limited to hedonic property studies and does not consider impacts on home ownership. Combining historical data on natural disasters in the United States with household data, we use a differences-in-differences approach to estimate the effects of natural disasters on home ownership rates. Results indicate a 3–5-percentage-point decrease in the home ownership rate among households that migrate to areas hit by severe natural disasters. An updating of risk priors given additional information regarding recent disasters may be responsible for such decreases. These results improve our understanding of how natural disasters impact housing markets and inform urban policy responses to climate change.

Suggested Citation

  • Tamara L. Sheldon & Crystal Zhan, 2019. "The Impact of Natural Disasters on US Home Ownership," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 6(6), pages 1169-1203.
  • Handle: RePEc:ucp:jaerec:doi:10.1086/705398
    DOI: 10.1086/705398
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    Cited by:

    1. Zhu, Kunxin & Gopalakrishnan, Sathya, 2023. "The Impact of Natural Hazards on Local Communities through Changes in Homeownership," 2023 Annual Meeting, July 23-25, Washington D.C. 335995, Agricultural and Applied Economics Association.
    2. Justin Contat & Caroline Hopkins & Luis Mejia & Matthew Suandi, 2023. "When Climate Meets Real Estate: A Survey of the Literature," FHFA Staff Working Papers 23-05, Federal Housing Finance Agency.
    3. Liu, Pengfei & Li, Yanggu & Zhang, Wei, 2023. "Local Economic Benefits of the Environmental Quality Incentives Program: Evidence from Rural Housing Markets," 2023 Annual Meeting, July 23-25, Washington D.C. 335843, Agricultural and Applied Economics Association.
    4. Ilan Noy & Eric Strobl, 2023. "Creatively Destructive Hurricanes: Do Disasters Spark Innovation?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 84(1), pages 1-17, January.
    5. Nicholas Apergis, 2020. "Natural Disasters and Housing Prices: Fresh Evidence from a Global Country Sample," International Real Estate Review, Global Social Science Institute, vol. 23(2), pages 815-836.
    6. Meri Davlasheridze & Qing Miao, 2021. "Natural disasters, public housing, and the role of disaster aid," Journal of Regional Science, Wiley Blackwell, vol. 61(5), pages 1113-1135, November.
    7. Sheldon, Tamara L. & Zhan, Crystal, 2022. "The impact of hurricanes and floods on domestic migration," Journal of Environmental Economics and Management, Elsevier, vol. 115(C).
    8. Nicholas Apergis, 2020. "Natural Disasters and Housing Prices: Fresh Evidence from a Global Country Sample," International Real Estate Review, Global Social Science Institute, vol. 23(2), pages 189-210.

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