Flooded: How Natural Disasters Lead to Predatory Lending in the Rio Grande Valley

The Rio Grande Valley, the southernmost tip of the Texas-Mexico border has made headlines for poverty, immigration and, more recently, the outsized impact of COVID-19 on an already vulnerable population. What is more rarely discussed, however, are the systemic issues at play that mire the Rio Grande Valley, and particularly the informal settlements known as colonias, in a cycle of destruction from which it is difficult to break free. These systemic issues include vulnerability to environmental hazards, especially flooding, ignorance (or apathy) on the part of the federal government, and a model of housing rehab finance that harms those that desperately need support.

In December 2019, I collaborated with local nonprofit organizations as part of my master’s thesis research. I facilitated focus groups and conducted interviews with those who had suffered from floods in the colonias of the Rio Grande Valley. Colonias are informal communities along the U.S.-Mexico border characterized by high poverty rates, low-quality housing and little public infrastructure. These communities are often developed illegally by predatory housing developers that build on semi-rural land in floodplains and the people who live in them are overwhelmingly Mexican and Mexican American.

Historically, colonias developed in the 1980s and ’90s as an affordable way for low-income families to buy land outside of large border cities; now, colonias continue to develop as population pressures increase the cost of housing along the border. The vast majority of colonias are in Texas, and the Rio Grande Valley is home to thousands of them. My research reveals an interconnected system of marginalization in which families, seeking to repair and replace flood-damaged property, turn toward predatory lenders, including payday lenders and car title lenders. As a consequence of these small yet high-interest loans, families are unable to fully recover from these all-too-common floods. This forces many to prioritize bare necessities over repairs. The damaged and destroyed homes commonly produce negative public health effects.

How is this possible?

Left Behind in the Floods

The unique experience of flooding in the Rio Grande Valley is a combination of environmental racism, failed policy, and a financial system that excludes the poor. Indeed, flooding isn’t uncommon, especially in the era of a rapidly changing climate. I spoke with almost 40 individuals and families across the Rio Grande Valley, from whom I learned that they not only experience flooding seasonally, but that the flooding is becoming worse. Unfortunately, there is very little ...