New Research Reveals Disasters Lead to Higher Rents in Impacted Areas; HUD Long-Term Disaster Recovery Assistance Slows Post-Disaster Rent Growth

New research from the Georgia Institute of Technology and Brookings Institute shows that renters would benefit from improved policies for coping with natural disasters. The study’s authors – including NLIHC Manager of Disaster Recovery Noah Patton – find that following disasters, rents rise by 4% to 6% initially and continue to climb for three years before leveling off, yet they remain higher than their original rates for at least five years. Additional disasters lead to further rent increases of 2 to 3 percentage points. ZIP codes situated in high-risk climate zones frequently hit by successive disasters see an average rent increase of 12%. The study’s qualitative research reveals that renters desire enhanced protections and that they perceive equity and federal resources as lacking in disaster relief efforts. The quantitative components of the study were based on an analysis of data from 2000 to 2020 that broke down rental rates by ZIP code and quarter in major metropolitan areas in California, Michigan, Arkansas, Georgia, and Florida.

Renters are an especially vulnerable population after natural disasters. They are generally less able to afford to move but are more likely to pay exorbitant markup prices when rental options are depleted. However, while political discussion and public policies tend to focus on single-family homeowners, evidence drawn from HUD’s new rental development requirements in the Community Development Block Grant-Disaster Recovery (CDBG-DR) program gathered following Hurricane Katrina shows that funding for renters works. Indeed, researchers found that rents appreciated at a much slower rate in areas where CDBG-DR grant money had been deployed than those where it had not.

These findings underscore the importance of the CDBG-DR program and the need to get program funding to disaster survivors more quickly. Because the CDBG-DR program is not permanently authorized, HUD must rewrite the rules of the program each time funds are approved by Congress. This creates significant delays in providing states and communities with the flexible resources needed to rebuild affordable housing and infrastructure after a disaster. To address the issues, Congress should enact the DHRC-endorsed “Reforming Disaster Recovery Act”, introduced by Senators Brian Schatz (D-HI), Susan Collins (R-ME), Patty Murray (D-WA), Roger Wicker (R-MS), Ron Wyden (D-OR), Todd Young (R-IN), Chris Van Hollen (D-MD), Thomas Tillis (R-NC), John Tester (D-MT), Cindy Hyde-Smith (R-MS), Todd Young (R-IN), Ben Ray Lujan (D-NM), Cory Booker (D-NJ), Alex Padilla (D-CA), Lisa Murkowski (R-AK), Bill Cassidy, M.D. (R-LA), and Representative Al Green (D-TX). The bill would permanently authorize the CDBG-DR program and provide important safeguards and tools to ensure that disaster recovery efforts reach all impacted households, including those with the greatest needs.