Working Paper: CEPR ID: DP16004
Authors: Yatang Lin; Thomas McDermott; Guy Michaels
Abstract: Construction on low elevation coastal zones is risky for both residents and taxpayers who bail them out, especially when sea levels are rising. We study this construction using spatially disaggregated data on the US Atlantic and Gulf coasts. We document nine stylized facts, including a sizeable rise in the share of coastal housing built on flood-prone land from 1990-2010, which concentrated particularly in densely populated areas. To explain our findings, we develop a model of a monocentric coastal city, which we then use to explore the consequences of sea level rise and government policies.
Keywords: cities; climate change; sea level rise
JEL Codes: R11; Q54; R14
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| construction in low elevation coastal zones (LECZ) (R52) | increased risk of flooding (Q54) |
| rising housing demand in coastal areas (R21) | increasing risk of flooding (Q54) |
| housing density peaks near the coast (R21) | declines steeply as SLR risk increases (G33) |
| new construction in dense census tracts (R38) | more likely to occur in medium-risk areas (R20) |
| developers' responsiveness to risk levels (D81) | construction decisions (L74) |
| as cities expand (R11) | increasingly build in flood-prone areas (Q54) |