Moving to Risk: The Effect of Climate Risk Information on Residential Mobility and Spatial Inequality

• In Event: Spatial Inequality

Abstract

Because neighborhood selection is foundational to spatial inequality, transitions in housing market processes, such as newly available information or changes to the perceived value of neighborhoods, have important consequences. This paper analyzes the effects of the growing availability of climate risk information in the housing market, using the case of a 2019 policy change in Texas that increased required flood-related disclosures from sellers. Using data from the Home Mortgage Disclosure Act from 2015–24, I find a 9% decrease in mortgage applications overall in moderate risk flood zones. However, I find this effect to be spatially concentrated in high-income counties, while mortgage applications in high risk flood zones in low-income counties increased 15%. I observe the largest increases for Black, Latino, and low-income households. These findings suggest that our emerging housing market transformation is reshaping neighborhood migration flows in ways that may intensify the movement of low-income, Black, and Latino households into environmentally risky and economically disadvantaged neighborhoods.

Author

• Katherine A. Thomas, New York University