Development impacts of disasters revealing longer-term effects on regional growth

Since 1980, billion-dollar climate disasters in the United States have increased an astonishing 749%, from averaging 3.3 throughout the 1980s to 28 in 2023 alone. These data from the NOAA National Centers for Environmental Information include floods, wildfires, droughts, severe storms, tropical cyclones, and winter storms. The finding is consistent with the Fifth National Climate Assessment, released last year, that concluded the rise is due to a combination of increased exposure (i.e., more assets at risk), vulnerability (i.e., how much damage a hazard of given intensity—wind speed, or flood depth, for example—causes at a location), and the fact that climate change is increasing the frequency of some types of extremes that lead to billion-dollar disasters. Because climate change will only get worse given its current trajectory, it is reasonable to expect the number and severity of disaster events will continue to grow. Research shows TBED, systems-based planning, and conventional economic development have roles to play in mitigating future risk.

A recent report from the First Street Foundation, Climate Abandonment Areas, uses the NOAA data to show that these billion-dollar disasters occur nationwide. Tropical cyclones wreak havoc in gulf states like Florida, Louisiana, and Texas; there are wildfires in western states, flood damage in Iowa. Over half the continental U.S. has experienced severe drought, and states from Texas to New York have been hit with disasters resulting from winter storms.

Combining the NOAA data with information from the U.S. Census Bureau, the First Street authors find that the largest increases in billion-dollar disasters are in fast-growing, densely populated states. They suggest that the development driven by population growth puts more structures (houses, businesses, infrastructure, etc.) at risk, increasing the cost of damages when disasters occur.

Information is mixed, at best, related to the role population migration trends may play in future disaster challenges. While the U.S. Census Bureau estimates the greatest increases in annual population change in the Sunbelt, the Census Bureau data also reveals the percentage of Americans moving each year has fallen sharply:  from 25% in 1950 to just 8.7% in 2022. At the same time, according to a Forbes Home survey, 30% of Americans say climate change is a reason they moved in 2022. And Zillow reports that more than 80% of buyers consider climate risk in their home-buying decision. A January 8, 2024 article in the Wall Street Journal reports some national auto and home insurance companies are moving entirely out of markets because of losses suffered and no clear path for recouping them. The result leads to what the First Street Foundation authors suggest in the title of their report, certain areas of the country are likely to become figuratively “abandoned” out of environmental necessity or economic viability.

Using flood risk as an example for their model, the authors constructed a model incorporating flood risk data and population change, and controlled for other factors such as social, economic, and political characteristics of areas. They found that residents begin to move away when 5-10% of properties in an area are at risk of flood damage. Some of these high-risk areas continue to attract new residents. The authors call these Risky Growth Areas. However, they conclude 7.4% of census blocks have passed a tipping point and experienced a population decline of 9 million residents between 2000 and 2020. The authors call these Climate Abandonment Areas, as 35.5% of the population decline (3.2 million residents) is directly attributable to flood risk.

First Street points out 16.4 million people in the U.S. living in these Climate Abandonment Areas face declining property values and other negative consequences to the quality of life in their neighborhoods. The authors cite research indicating that these individuals tend to be older and economically disadvantaged compared to the residents moving away from the area. Interestingly, the authors report that Climate Abandonment Areas can be found in many of the fastest-growing counties in the U.S. They predict that increasing flood risk due to climate change will lead to an increasing number of Climate Abandonment Areas, especially in the northeast and midwestern states. 

The foundation’s research suggests that development policies such as incentives for economically distressed areas should be reconsidered with climate risk implications added. Additional innovation targeting technologies, materials and development patterns may be required as well to restore habitability of these areas in the future.