NPR: HUD Sells Flood-Prone Homes Without Disclosing Risks

In a piece reported by Huo Jingnan, Rebecca Hersher, Tegan Wendland, Steve Newborn, and Daniel Rivero, NPR finds that the federal government has routinely sold flood-prone homes to buyers without disclosing their risks. The investigation "finds that the homes HUD [Department of Housing and Urban Development] sells are disproportionately located in flood-prone places, compared with Zillow records of all homes sold in the United States," despite HUD's stated mission to provide "safe, affordable housing" for American families.

NPR found that "[h]omes that were sold by HUD between January 2017 and August 2020 are in federally designated flood zones at almost 75 times the rate of all homes sold nationwide in that period," with the problem most pronounced in Louisiana, Florida, and New Jersey. "In many cases, buyers of HUD homes get less information about flood risk and the cost of flood insurance than if they were to purchase the house from a private seller."

Additionally, "NPR's analysis finds that the households in neighborhoods where HUD has sold homes are poorer on average than those in areas where HUD has not sold homes." This is particularly troubling as "[i]n the long term, flooding can wipe out a family's generational wealth by driving down home values or destroying homes altogether." Meanwhile, new federal rules will eliminate subsidies that kept flood insurance affordable for many coastal homeowners.

"HUD initially did not respond to specific questions about how it might work more closely with FEMA to reduce flood risk, or how its home sales in flood zones might impact low-income buyers," but defended the sales, stating that "[l]ocking low-income homebuyers out of a great number of affordable homeownership opportunities because the homes are located in communities within flood zones not only runs contrary to the Administration's objectives of achieving greater equity in homeownership, but prohibiting sales based on income would be comparable to sanctioning a resurgence of redlining."

The agency claims they are "'engaging with FEMA and other federal partners to look at policies, operations, and actions' that would make the nation's housing stock more resilient to climate change."