Environmental Determinants of Housing Prices: The Impact of Flood Zone Status

David M. Harrison (), Greg T. Smersh () and Arthur L. Schwartz, Jr ()
Additional contact information
David M. Harrison: University of Vermont, Berlington, VT
Greg T. Smersh: University of South Florida, St. Petersburg, FL
Arthur L. Schwartz, Jr: University of South Florida, St. Petersburg, FL

Journal of Real Estate Research, 2001, vol. 21, issue 1/2, 3-20

Abstract: This study examines the valuation of homes located within 100-year flood plains. Utilizing a database of 29,887 property transactions in Alachua County, Florida, the results of this investigation suggest that comparable characteristic homes located within a flood zone sell, on average, for less than homes located outside flood zones. Interestingly, the price differential is less than the present value of future flood insurance premiums. In addition, the price differential is shown to have increased since passage of the National Flood Insurance Reform Act of 1994. Finally, it appears that property tax assessors have slightly over-assessed properties located in flood zones relative to those in other areas. The large database and the lengthy period of analysis (1980–1997) are much broader than that of previous research efforts.

JEL-codes: L85 (search for similar items in EconPapers)
Date: 2001
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Citations: View citations in EconPapers (82)

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