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FLOODPLAINS AND HOUSING VALUES: IMPLICATIONS FOR FLOOD MITIGATION PROJECTS 1
Author(s) -
Shultz Steven D.,
Fridgen Pat M.
Publication year - 2001
Publication title -
jawra journal of the american water resources association
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.957
H-Index - 105
eISSN - 1752-1688
pISSN - 1093-474X
DOI - 10.1111/j.1752-1688.2001.tb05496.x
Subject(s) - floodplain , flood myth , flood insurance , valuation (finance) , depreciation (economics) , environmental science , 100 year flood , hydrology (agriculture) , geography , business , economics , finance , economic growth , engineering , archaeology , cartography , human capital , capital formation , geotechnical engineering , financial capital
The hedonic valuation method was used to quantify the impact of floodplain location on housing values in Fargo‐Moor‐head. Being located in the 100‐year floodplain lowered the home values by $8,990, and such homes were worth $10,241 less than similar homes located outside the floodplain before the major flood event of 1997. Required flood insurance premiums for these homes were determined to account for approximately 81 percent of this price depreciation. In contrast, homes in the 500‐year floodplain were worth $3,100 more than similar homes not in the floodplain. It was concluded that more disclosure is needed regarding the location of the 500‐year floodplain, and that the hedonic valuation method can be used to calculate the economic gains and losses associated with flood mitigation projects or floodplain remapping efforts that result in the reclassification of the legal floodplain status of individual homes.