1 Million Properties in Tristate Area Face High Risk of Flooding

With horrific scenes of Hurricane Helene-induced flooding in the Southeast still dominating the news cycle, the Federal Reserve Bank of New York has released a harrowing statistic: nearly 1 million houses and multifamily buildings in the tristate New York, New Jersey and Connecticut area — one in 10 properties — are at high risk of flooding. These properties rank among the top 25% of riskiest properties nationally, the same flood risk category as some homes in coastal Florida, Texas, and Louisiana.

“The threat of floods in the tristate area isn’t confined to the coasts,” says Jake Scott, a community development analyst at the New York Fed and an author of the report, "Flood Risk and the Tristate Housing Market." “Extreme rainfall, flash floods, and overflowing rivers threaten homes and businesses in inland cities, including Buffalo, Syracuse, and Newark.”

Nearly 40% of the tristate properties at risk of flooding, or more than 400,000 properties, are in low- to moderate-income census tracts, the report finds. These properties, including single-family homes and multifamily buildings, such as rental apartments, condominiums and co-ops, are home to more than 1.5 million people.

The report notes that low-and moderate-income households are often least prepared to shoulder the expenses that follow a flood. These include direct costs, such as property damage, and indirect costs, including falling property values and rising insurance premiums.

The report features case studies examining community planning and action in the face of flood risk for four communities: Keansburg and Hoboken in New Jersey and Syracuse and Brooklyn in New York. The Brooklyn case study offers sobering statistics about the low number of insured properties — and the challenges facing even insured property owners.

It states: "Less than half of multifamily properties in New York City that are in areas of high flood risk, as defined by FEMA’s 2007 Flood Insurance Rate Map, are insured through the National Flood Insurance Program. The areas at high risk have only grown since 2007, which likely means that an even smaller share of at-risk multifamily properties have insurance. This leaves them, and by extension their residents, exposed to serious financial risk in the event of a flood."

The bad news doesn't stop there. "And even for these multifamily properties with flood insurance," the report continues, "average claims payments may fall well short of total direct damages, to say nothing of indirect damages such as operating losses. Following Hurricane Sandy, multifamily properties with flood insurance faced an average of more than $64,000 in damages that were not covered."

If you're living in a flood-prone area, it's a lose-lose situation. You're damned if you do buy increasingly expensive flood insurance, and you're doubly damned if you don't.