Building underwater: Effects of community-scale flood management on housing development

The Community Rating System (CRS) program was implemented by the U.S. Federal Emergency Management Agency (FEMA) in 1990 as an optional program to encourage communities to voluntarily engage in flood mitigation initiatives. This paper uses national census tract-level data from 1990 to 2010 to estimate whether CRS participation affects housing development patterns. Our results show that participating in the CRS is associated with reduced rates of new housing construction and mobile homes in flood-prone areas. When we separate flood mitigation activities under the CRS program into information-based and regulation-based activities, we find that regulatory approaches are more effective than informational approaches. These results show a general pattern, nationwide and across decades, of community-scale flood management efforts deterring housing development in flood-prone areas.