The Federal Reserve Bank of New York today released a white paper about the impact of flooding on low- and moderate-income households in New York City. “Flooding Impacts on Household Finances: Insights from Focus Groups in New York City,” draws from focus groups the New York Fed’s Community Development team conducted in 2023 with 31 New York City residents whose homes have flooded.
The report found that most renters reported having no renters’ insurance to cover the cost of lost clothes, furniture, or equipment. No focus group participants reported receiving payment from renters’ insurance after experiencing flooding. Additionally, no participants reported being offered or receiving public disaster assistance following a flood.
The New York Fed’s Community Development team conducted the focus groups to help improve estimates of typical financial impact of flooding, including property loss and repairs, lost labor hours, and health impacts. Separate New York Fed research 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.
The white paper found that the most consequential flooding effects were on housing safety and stability. In addition to water damage and lost possessions, worsened mental and physical health are key consequences of flooding. The report found that recovery in the aftermath of flooding can be costly, isolating, and time consuming.
Among the other key findings:
- Economic barriers, including housing affordability, prevent some residents from moving to higher ground. Positive community connections also keep residents in their neighborhoods despite higher flood risk.
- Residents reported that they were highly dependent on friends, family, volunteers, and local nonprofit organizations for aid and assistance after flooding.
- Residents who lived alone or lacked strong social ties to their community reported a general sense of loneliness following a flood. They said they had trouble 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 have three areas of focus: health, household financial well-being, and climate risk.
