Real estate wealth inequality and exposure to natural disasters
Abstract
This paper quantifies how natural disaster risks are distributed across tenants, homeowners and multi-property owners. I measure the heterogeneity in exposure to risks using dwelling-level French data for the universe of owner-occupied, rental, second, and vacant dwellings, linking these properties to the disposable income and real estate wealth of their owners. Renters and homeowners owning only their primary residence are highly exposed to natural disasters; whereas multi-property owners expose only a fraction of their real estate wealth to environmental risks. Using Storm Alex as a case study, I find that these disparities in exposure lead to pronounced differences in post-disaster recovery. Lastly, I draw implications for policy: place-based interventions, such as resilient infrastructure projects, may fail to target the most exposed households if ownership and occupancy patterns are ignored; and untargeted subsidized natural disaster insurance could disproportionately benefit multi-property owners.
