A racist past, a flooded future: Formerly redlined areas have $107 billion worth of homes facing high flood risk--25% more than non-redlined areas

By Lily Katz

SEATTLE — Americans living in formerly redlined neighborhoods—many of whom are people of color—are more likely than those living in non-redlined neighborhoods to see their homes jeopardized by water damage, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage.

There are $107 billion worth of homes at high risk of flooding in parts of the U.S. that were designated undesirable for mortgage lending under the racist 1930s-era practice known as redlining, according to a Redfin analysis of flood risk by redlining grade in 38 major U.S. metropolitan areas. That compares with $85 billion worth of homes at high risk of flooding in places that were deemed desirable for lending.

This disproportionately impacts people of color, who are more likely to live in formerly redlined areas than in formerly greenlined areas. Today, 58.1% of households in neighborhoods that were once designated undesirable for mortgage lending are non-white, compared with 40.4% of households in neighborhoods that were labeled desirable for lending.

"Decades of segregation and economic inequality shoehorned many people of color—especially Black Americans—into living in neighborhoods that are more vulnerable to climate change," said Redfin senior economist Sheharyar Bokhari. "Redlining kept home values in Black neighborhoods depressed, which in turn meant there was less money invested and reinvested in those neighborhoods for decades to come."

"The cycle continues today," Bokhari said. "As climate change fuels rising sea levels and powerful storms, many of these neighborhoods lack the funding for the infrastructure upgrades necessary to combat flooding."

Climate change has intensified racial injustice

Due to decades of disinvestment, formerly redlined neighborhoods aren't as financially equipped to prepare for and recover from natural disasters, which are becoming increasingly common. The 2020 Atlantic hurricane season was the worst on record, with 29 named storms. Global warming has caused sea levels to rise at an accelerated pace, enabling storm surges to move farther inland and causing even more destructive flooding.

History has shown that when storms hit, communities of color often suffer the most. Four of the seven zip codes that faced the costliest flood damage from Hurricane Katrina in 2005 were at least 75% Black. And after Hurricane Harvey hit Texas in 2017, Black and Hispanic Americans were about twice as likely as white Americans to say that they had fallen behind on their mortgage payments as a result of the storm. Formerly redlined areas are also an average of 5 degrees hotter in the summer, in part because they have more pavement and fewer trees to cool the air—and soak up water when flooding occurs.

"When major storms hit, Black communities are often forced to spend years rebuilding their homes instead of moving on and building home equity," Bokhari said. "This perpetuates a cycle in which Black families lag financially."

Sacramento Tops List of Metros Where Formerly Redlined Areas Face More Flood Risk
In Sacramento, 21.6% of homes ($2.6 billion worth) in redlined areas face high risk of flooding today. That compares with 11.8% of homes ($717 million worth) in greenlined neighborhoods. That 9.8-percentage-point difference represents the biggest gap of any metro in this analysis that had a larger share of homes at risk in redlined neighborhoods.

Nearly half of the households in Sacramento's redlined areas are occupied by people of color, compared with a third of households in greenlined areas.

Sacramento's Gardenland neighborhood—which was designated "definitely declining" for mortgage lending—is an apt example. The area, which is minutes away from the American River and the Sacramento River, faces major flood risk. The Home Owners' Loan Corporation noted in its description of the neighborhood that the area was subject to standing water during periods of excessive rainfall. It also said Gardenland's lack of sewers and paved streets, inadequate transportation, distance to the city center and "heterogenous population" were among its "detrimental influences." Three-quarters of Gardenland's residents are non-white, according to a Redfin analysis of 2019 U.S. Census Bureau data.

"Gardenland is a mandatory flood-insurance area because it's so close to the river and the levee," Bradford said. "The neighborhood is mostly made up of apartment complexes, but there are also some older single-family homes. It's popular with first-time homebuyers because the typical home goes for about $315,000—$85,000 less than the typical home in Sacramento."

New York had the second biggest gap, with 13.8% of homes in redlined neighborhoods at high risk of flooding, compared with 7.1% of homes in greenlined neighborhoods. Next came Boston, with a 5.1-percentage-point gap, and Chicago, with a 4.8-percentage-point discrepancy. In dollar terms, Chicago has $19.7 billion worth of homes with high flood risk in redlined areas, compared with $3.6 billion in greenlined areas.

In Chicago's Bronzeville neighborhood, basement flooding plagues Black homeowners

Chicago, which was built on a swamp, has significantly more homes at risk of flooding than previously thought. Nearly 13% of the city's more than 600,000 properties are estimated to face 100-year flood risk, according to First Street Foundation—substantially higher than FEMA's 0.3% estimate. And almost 90% of flood damage insurance payments in Chicago are made to households in communities of color, a 2019 study found.

Bronzeville, a formerly redlined area in South Chicago, is one example of a predominantly Black neighborhood that faces major flood risk today.

"When the Great Migration happened between 1916 and 1970, Bronzeville became the center of Black culture in Chicago. It's where Black professionals lived—the first Black doctors, jazz musicians and blues musicians. Many of these people had money but weren't accepted in society, so they came to Bronzeville, which remains majority Black," said local Redfin real estate agent Brittani Walker. "A lot of the single-family homes in Bronzeville were built in the 1900s and experience basement flooding due to sewer issues. My client there had to get her basement redone twice because of flooding. Eventually, she sold the property and moved into a nearby new-construction home that was much less likely to experience water damage."

Redfin employee Lamar Austin lives in a 124-year-old rowhome in Bronzeville and has dealt with basement flooding twice in the last two years. The first time, there were 18 inches of standing water. When Chicago gets heavy rainfall, sewer drains that haven't been upgraded in decades often overflow into people's basements because they're so corroded and filled with grime. Many of these outdated sewers are located in majority non-white neighborhoods on the south side, like Bronzeville, Austin said.

"When it comes to the city fixing the sewers, minority neighborhoods aren't the priority," said Austin, whose team recruits real estate agents for Redfin's partner program. "The government prioritizes affluent neighborhoods on the north side, where homeowners already have the money to tear down aging homes and rebuild new ones that are resilient to flooding."

Austin has flood insurance, but between sand bags, sump pumps and water-removal services, he has still spent an estimated $5,000 fixing and preventing water damage in his home.

Florida bucks the national trend, with high flood risk in formerly greenlined areas

In Tampa, FL, 47.5% of homes in greenlined neighborhoods are at high risk of flooding, compared with 25.9% of homes in redlined neighborhoods. There are similarly large gaps in Miami, Jacksonville, FL and Virginia Beach, VA—all southeastern metros with access to the beach.

"As soon as people see the sun, the beach and the palm trees, they forget about the flooding," said Redfin Miami Beach real estate agent Cecilia Cordova. "If they find a house they like, they're usually willing to live with the risk. Many buyers will also purchase a home and then renovate the property so it's at a higher elevation, which minimizes much of the flood danger."

Florida also has a large share of older residents, who are generally less likely to factor climate change into their homebuying decisions, added Bokhari.

To view the full report, including charts and methodology, please visit: https://www.redfin.com/news/redlining-flood-risk/