Postdisaster Investment in Single-Family Housing: Insights for Harris County, Texas

Source abstract

Problem, research strategy, and findings: Investor purchases and ownership of single-family homes have contributed to higher housing costs, increased eviction filings, and gentrification in U.S. cities. Though anecdotal evidence suggests that natural hazard–related disasters (e.g., hurricanes and wildfires) may enable investors to acquire even more single-family homes, limited research has empirically tested this claim. In this study we combined flood data with property records for 741,561 single-family residences from Harris County (TX) from 2016 to 2018. We used these data to examine the scale and spatial distribution of investor purchases of single-family homes following Hurricane Harvey, a Category 4 storm that struck in August 2017. Using regression methods, we analyzed investor purchases of owner-occupied single-family home sales that occurred after Hurricane Harvey. We found that investor purchases of these homes increased significantly in flooded neighborhoods, particularly those that were in predominantly non-Hispanic White neighborhoods. Although investor activity was already under way before the storm, hurricane-induced flooding was associated with a statistically significant increase in poststorm investor purchases that prestorm trends and other confounding factors did not fully explain.Takeaway for practice: Our results support the hypothesis that natural hazard–related disasters enable investors to increase their ownership of single-family homes and highlight the neighborhoods most likely to experience postdisaster investor purchases. Planning interventions that help residents and communities to retain control of housing and stabilize costs, such as community land trusts and postdisaster cost moratoriums, offer promising solutions for limiting investor purchases and associated consequences.