The Federal Reserve Bank of New York has published a white paper examining the financial impact of flooding on low- and moderate-income households in New York City. The study, titled "Flooding Impacts on Household Finances: Insights from Focus Groups in New York City," is based on focus groups conducted by the New York Fed’s Community Development team in 2023 with 31 residents whose homes have been affected by floods.
The findings reveal that most renters did not have insurance to cover the cost of lost belongings such as clothes, furniture, or equipment. None of the participants reported receiving payment from renters’ insurance after experiencing flooding, nor did they report being offered or receiving public disaster assistance following a flood.
The focus groups were carried out to help improve estimates of the typical financial impact of flooding, including property loss and repairs, lost labor hours, and health impacts. Separate research by the New York Fed has found that approximately one in ten low- to moderate-income people, immigrants, and racial and ethnic minorities in New York City live in a flood-prone census tract.
Significant effects of flooding were found to be on housing safety and stability. Beyond water damage and lost possessions, worsened mental and physical health are key consequences of flooding. Recovery from such events can be costly, isolating, and time-consuming.
Among other findings:
- Economic barriers including housing affordability prevent some residents from moving to safer locations. Positive community connections also keep residents in their neighborhoods despite higher flood risk.
- Residents reported high dependence on friends, family, volunteers, and local nonprofit organizations for aid after flooding.
- Residents who lived alone or lacked strong social ties reported feelings of loneliness following a flood. They experienced difficulty finding assistance and navigating an opaque relief structure on their own.
“The people we spoke with reported everything from depression to homelessness following a flood,” said Dyvonne Body, the report’s author. “The future financial supports they told us would protect others in flood-prone communities include adequate insurance, emergency grant assistance to replace lost income, and a grace period for debt repayment.”
The case study was developed as part of the New York Fed's Community Development efforts, which focus on health, household financial well-being, and climate risk.
Contact:
Shelley Pitterson
(917) 698-0510
Shelley.Pitterson@ny.frb.org
