Introduction

This paper uses household-level microdata to evaluate flood risk exposure across socioeconomic characteristics in the US. It provides new evidence on how differences in exposure versus vulnerability translate into disparities in flood risk across household characteristics, disambiguating whether lower-income minorities or high income individuals are most exposed to flood risk.

Measuring flood risk

Flood risk is evaluated as the product of physical hazard exposure and household vulnerability. The research utilises the National Flood Hazard Layer to map potential exposure to flood inundation at a very fine geographic scale, defining exposure at both the parcel level and the building level to capture households on or near floodplain boundaries.

Data

The analysis leverages a new US Census Bureau microdata infrastructure, the Environmental Impacts Frame, linked with surveys and administrative records. These microdata allow for the comprehensive measurement of how flood risk exposure and insurance costs vary along individual-level household characteristics.

Trends in exposure

For the most expansive floodplain definition, the number of households exposed increased from around 11 million in 1999 to over 15 million in 2023. However, the share of households in floodplains remained between 14.2 and 14.4 per cent over the same period, as inflows and outflows to and from floodplains have remained quite evenly matched. Conversely, exposure for the top of the income distribution increased from around 17 to around 19 per cent over the same period.

Who is exposed to flood risk?

Renter households are exposed to higher levels of flood risk than homeowner households, with 18 per cent of renters living in floodplains, compared to around 12 per cent for homeowners. Residents of multi-family buildings are also exposed to higher flood risk than residents of single-family homes. Lower income households are exposed to higher flood risk than higher income households up until the top decile, where 19 per cent of the top 1 per cent of income earners are in floodplains.

Housing wealth and flood risk exposure

The highest value homes are substantially more likely to be in floodplains. More than a quarter of the top 1 per cent most valuable homes owned by White, Asian, and Hispanic homeowners are in floodplains, whereas only 10 to 18 per cent of median valued homes are in floodplains. When considering all homes owned, 27 per cent of households at the top of the distribution are exposed to floodplains. The top 1 per cent of income hold 7 per cent of total home value in floodplains.

Insurance and adaptation to flood risk

Homeowners without homeowners insurance are more likely to be in floodplains and are generally lower income, and more likely to be Hispanic or non-Hispanic Black. Average insurance premiums are higher in flood-prone areas, presenting a relative financial burden that is greater for low-income homeowners. The average ratio of insurance premium to household income is 10 to 15 per cent for homeowners in the bottom income vigintile, whilst the average ratio is below 1 per cent for the top income vigintile. Furthermore, elevation and insurance seem to be complements and not substitutes.

Discussion

The research defines a typology of floodplain-exposed households across 12 different groups, concluding that the population of households in floodplains is by and large not a vulnerable population. A highly vulnerable subpopulation exists, consisting of low-income, uninsured homeowners of single-family homes, yet only around 1.74 per cent of households in floodplains are in this category.