In the wake of recent sensationalized press on the effect of flood mapping on housing prices, we thought we’d update our five-year old blogpost on the subject with some research and facts.   Clearly, recent news images of flood damaged homes and anxious residents have got waterfront property owners on edge, regardless of whether they are currently inundated.

Homeowners may be wondering if being close to water is more of a liability than a benefit.  The answer is most likely yes.  However, doing the science, making a flood map, and making it publicly available doesn’t change the hazard; a line on a map doesn’t make it any more likely to be wet.  However, it does change individuals’ and governments’ knowledge base and therefore their ability to do something about the flood risk.  Understanding hazard and risk is the first step in reducing risk (it’s also the primary tenet of the Sendai Framework for Disaster Risk Reduction…and common sense).

As we wrote about five-years ago, mapping and disclosing a flood hazard may marginally affect housing prices.  The research in this field remains unchanged. Studies show varied relationships between flood mapping and property values; the majority indicate that floodplain disclosure reduces the real estate value anywhere between 1% – 4% (a relatively small amount). Whereas actual flood events tend to decrease housing values from 18% – 25%. Price reductions due to flood events diminish over time (1-7 years). There are also studies that only indicate no or minimal reduction in real estate values after disclosure.  See below for more detail on the research and results.

In summary, research shows that disclosing flood hazard (i.e. by producing and making flood maps publicly available) may marginally affect housing prices. Actual floods on the other hand do have an impact – and on more than just housing prices; people’s lives are marked forever. So – in our mind – flood mapping is a win-win. If prices aren’t affected – then mapping can still be used as a tool to support better decision-making by potential homebuyers, by insurers, and by planners and engineers. And, if prices are reduced – then the economic incentive to move people out of hazard areas, and into places where long-term damages will be less, is working.


Further Information

If you are a homeowner interested in knowing more about flood mapping – what it is and what it means – we can recommend this short video from Alberta Environment.  You may also be interested in our own blogposts on the state of flood mapping in Canada, and British Columbia, specifically.

If you are a resident interested in knowing what you can do if you live in a floodplain – we are working on a blogpost for you.  In the meantime, we can recommend a few resources on property-level protections from the UK and Australia.


Literature Summary

A study from Australia compared the real estate value impacts of the release of flood map information to the public with impacts from flood event for Brisbane (Rajapaksa et al. 2016). They found that property values decreased property values by 1-4%, whereas the 2011 floods reduced property values by 18-19%.

Often small or negligible impacts of floodplain designation on residential home sale prices in U.S., which also in turn questions how effective the flood insurance program is in the States at  “internalizing flood risk into the residential property market” (Meldrum 2016). (Meldrum 2016) showed for Boulder County, Colorado, that floodplain designation had a strong impact on property values of condominium, while it did not have much of an impact on stand-alone residential buildings.

After the hurricane Katrina in New Orleans, home buyers paid more attention to the building elevation (McKenzie and Levendis 2010). Insurance premiums increased from 1.4% per foot in floodplain areas to 4.6% after the hurricane had hit, which reflects the change in perceived risk, as well as the potentially higher compliance costs that are associated with rebuilding under the National Flood Insurance Program (NFIP) (McKenzie and Levendis 2010).

(Filippova et al. 2019) found that public posting of erosion maps under future sea level rise had only a small impact on house prices, “suggesting that people do not care much about the long-term risks of sea-level rise as they do not incorporate these risks in their investment decisions.”

(Beltrán, Maddison, and Elliott 2019) investigated the impact of flood events on property prices for a large dataset in England (between 1995 and 2004). They found that right after a riverine flood event, price reduction is about 25%, while after a coastal flood event, it is about 21%. However, this discount does not last long, and disappears after 4-5 years (only for low-priced houses, it tends to persist longer, up to 7 years). But the magnitude of the impact in price depends strongly on the characteristics of the properties, the flood and flood protection assets.

(Belanger and Bourdeau-Brien 2018) found for a large dataset in England, that after publication of detailed flood maps from the UK Environmental Agency and in combination with a more risk-based pricing of flood insurance, the value of residential houses decreased significantly. Average difference in values from in flood zone to outside flood zone is 1.5%.  The study also mentions other studies that show that effect of actual floods ‘fades away’ – “Pryce et al. (2011) provide a theoretical basis for such an explanation. Their main argument relies on investor’s myopia and amnesia that causes the perception of flood risk to diverge from the actual level of flood risk. Consequently, the flood risk discount is expected to be related to the time passed since the last flood, as flood episodes temporarily increase risk awareness.”

(Zhang 2016) found for North Dakota/Minnesota in the Red River floodplain that the floodplain designation had a negative impact on house prices, strongest for lower-priced homes. The flood of 2009 reduced property prices, however, the effect was not long-lived and diminished after 2010. Again, the flood had more of an impact on lower-priced home prices, than higher-priced homes.

(Zhang 2016) – Summarized from other studies: “The general consensus is that location within a floodplain has a negative impact on house prices, but the magnitude of the price discount varies from 4% to 12%. In theory, the price discount reflects the home owner’s willingness to pay to reduce the cost of flooding, i. e. the difference between the market value of a house located within a floodplain and the value of an equivalent house located outside a floodplain, should be equal to the present value of future flood insurance premiums. However, in practice, the price discount may deviate from capitalized flood insurance premiums.”



Belanger, Philippe, and Michael Bourdeau-Brien. 2018. “The Impact of Flood Risk on the Price of Residential Properties: The Case of England.” Housing Studies 33 (6): 876–901.

Beltrán, Allan, David Maddison, and Robert Elliott. 2019. “The Impact of Flooding on Property Prices: A Repeat-Sales Approach.” Journal of Environmental Economics and Management 95: 62–86.

Filippova, Olga, Cuong Nguyen, Ilan Noy, and MichaelRehm. 2019. “Who Cares? Future Sea-Level-Rise and House Prices,” no. April.

McKenzie, Russell, and John Levendis. 2010. “Flood Hazards and Urban Housing Markets: The Effects of Katrina on New Orleans.” Journal of Real Estate Finance and Economics 40 (1): 62–76.

Meldrum, James R. 2016. “Floodplain Price Impacts by Property Type in Boulder County, Colorado: Condominiums Versus Standalone Properties.” Environmental and Resource Economics 64 (4): 725–50.

Rajapaksa, Darshana, Clevo Wilson, Shunsuke Managi, Vincent Hoang, and Boon Lee. 2016. “Flood Risk Information, Actual Floods and Property Values: A Quasi-Experimental Analysis.” Economic Record 92: 52–67.

Zhang, Lei. 2016. “Flood Hazards Impact on Neighborhood House Prices: A Spatial Quantile Regression Analysis.” Regional
Science and Urban Economics
60: 12–19.