Urban Flooding is Chronic and Costly, but not Correlated with Floodplains

First-of-its-kind Analysis Synthesizes Insurance Claims, Property Owner Reports, and Geography of Flooding in an Urban Environment

CHICAGO (May 14, 2013)—When it comes to flooding in cities, it makes little difference whether a property is located within a floodplain or not—damage happens, happens often, and can inflict significant costs. This stark lack of correlation between property damage claims and recognized floodplains is among the key findings of The Prevalence and Cost of Urban Flooding, a report released today by the Center for Neighborhood Technology (CNT).

The report, the first of its kind to collectively analyze flood damage claims and sewer- and drain-backup claims data from multiple providers of insurance and other financial assistance, is part of a first phase of research at CNT on the prevalence and cost of flooding to property owners—such as homes and businesses—in urban and suburban areas. Urban flooding is caused by too much rain overwhelming drainage systems and waterways, and making its way into basements, backyards, and streets.

CNT researchers took the unprecedented step of combining insurance claims payout data for property damage in Cook County, IL (between 2007–2011, aggregated by ZIP code), with analysis of 115 responses to an online survey of property owners in Cook County that experienced property flooding in the last five years.

Key points emerging from the report:

• Urban flooding in Cook County is chronic and systemic, resulting in damage that is widespread, repetitive and costly. Our analysis identified 177,000 claims made across 96 percent of Cook County ZIP codes, and in each of the five years. This is the equivalent of one in six properties in the County making a claim. Average payouts per claim were $3,733 across all types of claims, with total claims amounting to $660 million over the five years examined. Seventy percent of the online survey respondents estimate that they had flooded three or more times in the last five years, 20 percent have flooded 10 or more times.
• There are multiple social and economic impacts on property owners. Our online survey found that 84 percent suffered stress and 13 percent ill health. Forty-one percent lost the use of part of their property, 63 percent lost valuables and 74 percent lost hours of work to clean up.
• There is no correlation between damage payouts and the floodplains. When all types of claims are aggregated, some of the Cook County ZIP codes with the highest concentration of payouts (number and value) have no land area located within federally designated floodplains.

• Claims were made across income groups, however 67 percent of the 27 ZIP codes with the highest concentrations of damage earn below the average median household income for Cook County.
• Flood insurance is not carrying the burden of damage payouts. Claims via the National Flood Insurance Program—the only formal ‘flood’ insurance program—represent just 10 percent of total payouts.

• No clear solutions for property owners. The vast majority—76 percent of online survey respondents—had invested in measures to prevent future flooding, such as downspout disconnection and pumps, but only six percent believed that the investment had solved their flooding problem.

“In looking at the data we have, which is unique, we saw a somewhat shocking picture of the cost and frequency of urban flood damage,” said Harriet Festing, Water Program Director at CNT. “More shocking is that we know it represents a significant understatement of actual flood damage. There’s more data out there from insurers and property owners that will tell an even more disheartening story.”

Research conducted by CNT in 2012 indicates that communities across the Great Lakes region are suffering from the impacts of urban flooding caused by moderate and heavy rain running off roofs, roads, and parking lots. The economic and social consequences can be considerable: experts estimate that wet basements decrease property values by 10-25 percent, and that almost 40 percent of small businesses never reopen their doors following a flooding disaster.

“This report is further evidence of an increasingly persistent and prevalent problem, and one that cannot and should not be left to property owners to solve on their own,” said Kathryn Tholin, CEO of CNT. “There are steps that cities and counties can take now to protect properties and encourage smarter stormwater management.”

The Prevalence and Cost of Urban Flooding also finds that communities affected by urban flooding are not benefiting from state and federal programs and incentives designed to support them. For example, CNT research shows that only 19 of the 133 communities in Cook County are participating in FEMA’s Community Rating System, and that Cook County does not have a Multi-Hazard Mitigation Plan. This means that the majority of property owners in ZIP codes with high urban flood damage payouts are unable to benefit from reduced flood insurance rates and other protective measures that form part of the programs.

CNT is engaging a broad set of stakeholders in an expansion of this research, and is designing innovative and cost-effective solutions to protect homes and businesses in the future. This work includes the development and promotion of state legislation—the provisionally dubbed ‘Dry Basements Act’— and the nation’s first wet weather Wetrofit® service.

On June 13, 2013, CNT will convene Cook County property owners, contractors, elected officials and others at The Gross Gathering, an event intended to document urban flooding stories, and work with property owners to develop swift, affordable, neighborhood solutions.

This research is part of CNT’s Smart Water for Smart Regions initiative dedicated to inventive solutions and advocacy focused on water supply and stormwater in the Great Lakes states.

Visit www.cnt.org/water for more information.

CONTACT
Ryan Kilpatrick, 773.269.4041; Harriet Festing, 773.269.4042

###

Founded in 1978, CNT is a Chicago-based think-and-do tank that works nationally to advance urban sustainability by researching, inventing and testing strategies that use resources more efficiently and equitably. Its programs focus on transportation, energy, water, community development, and climate. Visit www.cnt.org for more information.

Successful Transportation Solutions Require Boldness, Transparency

Tuesday, April 30th, 2013 at 5:51 pm

Laying the foundations for long-term, sustainable economic development will require adopting innovative policy solutions to overcome obstacles to growth. Unfortunately, implementing new policy is often politically unpopular, especially when the change involves levying a new charge or increasing taxes to fund investment or influence behavior.

A case in point was illustrated in a presentation given by Dr. Jonas Eliasson of Stockholm’s Royal Institute of Technology at a recent Earth Day event in Chicago. Like most major metropolitan areas, the Swedish capital had long suffered from acute traffic congestion and all of the economic and environmental problems associated with it. Beginning in the early 1990’s, academics and policy experts had discussed the potential solution offered by “congestion pricing,” whereby drivers pay a fee for use of the city’s roads, the level of which depends upon the time of day and the “zone” of the city in which the driver is traveling.

Advocates of the system argued that putting a price on road use would discourage discretionary motorists from driving into the center of the city, leaving the roads less congested at peak times for drivers who had no choice but to drive. Congestion pricing could also encourage people to explore different commuting options like public transit or cycling, as well as provide a potential revenue stream to pay for road maintenance and investment in transit services.

Supporters of congestion pricing soon learned that developing effective solutions is not enough. Transforming ideas into actual implemented policies required a concerted effort to educate the voting public. As Dr. Eliasson described, early public opinion was predictably hostile to any plan to charge drivers for something that was thought of as “free.” However, with a combination of effective public education campaign and some bold political decision making during the early implementation phase in 2006, residents of Stockholm and the surrounding metro area came to see the benefits of the congestion price.

The public education campaign focused on the idea that the charge wasn’t a tax on driving. Instead, it was a fee that reduced traffic congestion. It reminded commuters that traffic-clogged streets are not “free” to use, and that congestion has costs: wasted time, wasted fuel and damage to the environment.

Residents realized that the congestion charge allowed for better traffic management without the need for expensive and disruptive new road building. Public support for the system, which hovered around 30 percent before the 2006 trial is now at close to 70 percent.

The Stockholm example teaches a number of crucial lessons for those interested in public policy. First, well-designed policy solutions can be practically effective in improving peoples’ lives if implemented and managed in a transparent and competent way. Second, the initial unpopularity of controversial ideas shouldn’t dissuade politicians from embracing bold solutions if they truly believe in them. People will notice the improvement and the system’s popularity will increase. Third, the public will support paying for real investment in improving infrastructure if the benefits are explained clearly and the results are visible.

Residents in cities like Stockholm and Singapore, which also has an effective road-pricing system, saw the positive effects of congestion pricing with their own eyes and were won around to the idea. Voters in Los Angeles and Denver supported the creation of dedicated revenue streams to fund transit expansion and improvement and are already beginning to enjoy the benefit of increased choice and reduced road traffic. There’s no reason to believe that the same wouldn’t be true for the voters of Chicago and Cook County.

What do you think? What type of fee or tax to support an expansion of transit and/or reduction in congestion could you support in your community?

After the Flood: 3 Tips for Action in Your Community

Thursday, April 25th, 2013 at 4:39 pm

After the weeks of wet weather we’ve just experienced in Chicago, we can’t help but empathize with the thousands of property owners whose soggy carpets have piled up and whose spirits remain dampened, here and in other parts of the country. For those who wonder if their basement flooding miseries will ever end, here are CNT’s top three tips for actions you and your community can take immediately. Read more »

Energy Efficiency Matchmaking Part 2: Utility Industry, We Have a Multifamily Roadmap for You

Wednesday, March 27th, 2013 at 2:39 pm

In a recent post, we highlighted a report that shows how energy efficiency upgrades in multifamily buildings could save building owners and residents up to $3.4 billion annually. Despite this, the multifamily building sector represents a mostly untapped opportunity for energy efficiency gains amongst traditional utility-run programs.

One reason for this is because the multifamily market has unique challenges that must be addressed in order to deliver effective programs. The good news is, we have a roadmap and there are partners along the way to help utilities capitalize on the enormous opportunity for energy savings that exists in the multifamily housing sector.

A new report we released along with the American Council for an Energy-Efficient Economy (ACEEE), Engaging as Partners: Introducing Utilities to the Energy Efficiency Needs of Multifamily Buildings and Their Owners, examines the factors that contribute to effective energy efficiency program design for multifamily buildings and recommends strategies that can help utilities design and implement energy efficiency programs. Read more »