Promoting the Post-Flood Financial Resiliency of Low and Moderate Income Households
The Wharton Risk Center’s Policy Incubator is honored to have received a Stage 2 Civic Innovations Grant from the National Science Foundation (NSF), in partnership with the Department of Energy and the Department of Homeland Security. The Civic Innovation Challenge is a research and action competition to fund ready-to-implement, research-based pilot projects that have the potential for scalable, sustainable, and transferable impact on community-identified priorities.
The mid-Atlantic region of the United States, including New York City, is experiencing accelerated rates of sea level rise, increasing flooding. The likelihood of experiencing flooding is greater for lower-income residents, with those in NYC floodplains tending to be working and middle class homeowners. Unfortunately, low- and moderate-income households in the US struggle with access to the needed financial resources to recover. Financial resilience—the ability to recover from an economic shock—underpins other aspects of recovery and is a necessary condition for broader urban disaster resilience. Despite this, it is an under-researched aspect of climate adaptation. And while there has been some work documenting the problems, actionable investigation of solutions is scarce. Our project is designed to fill this gap.
This video was created as part of Stage 1 of the Civic Innovations Challenge.
Flooding is the costliest natural disaster and the risk is growing. Low and moderate-income households suffer disproportionately from disasters and recover less quickly than more privileged residents.
The project’s overarching goal is to increase the financial resilience of low- and moderate-income households in New York City to escalating flood risk through the use of inclusive insurance. Inclusive insurance refers to any program or policy that makes insurance coverage available to those previously locked out of the insurance market. Internationally, there has been a growing movement to identify low-cost insurance designs and establish public-private partnerships that can guarantee a more equitable recovery, however, these innovations have yet to be widely adopted in the US. Our project will establish NYC as one of the first local governments in the US to harness these approaches.
This project is a joint effort between the Wharton Risk Center at the University of Pennsylvania, the New York City Mayor’s Office of Climate Resiliency (MOCR), and the Center for New York City Neighborhoods (CNYCN). It also involves research and development work with Global Parametrics, technical assistance from Guy Carpenter, and support from the NYC Office of Management and Budget. Our work will be informed by an advisory board of subject-matter experts.
Stage 1 Results
The team used Stage 1 as an idea accelerator to examine half a dozen innovative, inclusive insurance interventions and to identify which would be most impactful, implementable, and sustainable. The intensive process involved more than 30 semi structured expert interviews, exploratory analyses, stakeholder engagement, and consultation with our advisory board.
Our team released an Issue Brief in January 2021 as part of the Stage 1 grant, “Improving the Post-Flood Financial Resilience of Lower-Income Households through Insurance.” This brief is intended to help policymakers begin the conversation about what new or supplemental policies could help low- and moderate-income households in at-risk areas.
Stage 2 Components
Deploy Innovative Insurance Pilots
The key pilot will be the purchase, by CNYCN, of a parametric flood insurance policy designed to rapidly provide emergency cash grants to LMI households in the event of a flood. In addition, R&D will be undertaken on parametric flood policies that community development finance institutions can provide to protect LMI borrowers.
Create a Community of Practice
Harnessing risk transfer for social recovery goals, the community will facilitate knowledge sharing, spur the generation of new knowledge, enable dialogue, connect people, and support collaboration. This community will be developed through a workshop and new information sharing platforms – including educational tools, case studies, and interviews.
Link Research to Actionable Change
Three research projects will be undertaken, including a survey to quantify the length of delays in various sources of disaster recovery dollars and the costs from these delays; a replicability and generalizability analysis of the project’s insurance pilots; and a typology of the community-level benefits of widespread insurance purchase.
Increase Literacy and Capacity
This includes training housing advisors to address escalating flood risk and flood insurance, providing pre-disaster consultations to fifty NYC households on risk reduction and insurance, and expanding the information available on FloodHelpNY.org, the local flood risk awareness platform.
Project Team Members
Wharton Risk Center
Carolyn Kousky, Executive Director (Principal Investigator)
Helen Wiley, Assistant Director of Research and Policy (Project Manager)
Zoe Linder-Baptie, Assistant Director of Communications & Engagement (Media Relations)
Karina French, Climate Resilience Fellow
Ben Keys, Rowan Family Foundation Professor of Real Estate, Affiliated Scholar with the Disaster Risk Management Lab
Kyle Sweeney, Pre-Doctoral Fellow
Song You, Post-Doctoral Fellow
NYC Mayor’s Office of Climate Resilience
Eric Wilson, Deputy Director, Land Use & Buildings (Co-Principal Investigator)
Peter Adams, Senior Policy Advisor for Land Use and Buildings
Tallant Burley, Policy Advisor
Tomi Vest, General Counsel
Center for New York City Neighborhoods
Theodora Makris, Senior Policy and Research Associate
Jessi Penkoff, Staff Attorney
Cristian Salazar, Director, Communications and Digital Products
Joseph Sant, General Counsel & Vice President
Aaron Sturm, Program Manager
Jessica Wells-Hasan, Vice President of Development & External Affairs
Joseph Becker, Senior Catastrophe Advisor, Hydrologist
Jonathan Clark, Managing Director
Liz Cleary, Managing Director
Cheryl Lorenz, Senior Vice President
Chris Sykes, Managing Director
Malcolm Haylock, Head of Risk Modelling
Jerry Skees, Founder and Director
Additional Senior Personnel
Stephen Beckage, Unit Head, NYC Office of Management and Budget
Carlos Martin, Rubenstein Fellow, Brookings
Project Advisory Board
Reports and Issue Briefs
FloodHelpNY.org was created as a platform by CNYCN, MOCR, and the NY Governor’s Office of Storm Recovery for engaging and informing NYC residents about how they can protect their home and finances from flooding.
Visit the NYC Mayor’s Office Of Climate Resiliency webpage for links to resources like NYC stormwater flood maps and city resiliency plans.
January 24, 2022. USA Today. Insurance and aid aren’t covering the cost of disasters in America. Is it time to relocate? (Read for free on Yahoo!News).
November 29, 2021. Government Technology (MetroLab Innovation of the Month series). Building Resilience for Low-Income New Yorkers Post-Disaster.
October 12, 2021. BKReader. BK Residents Hit Hard by Ida Could Get Flood Insurance if City Program is Adopted.
October 6, 2021. Brooklyn Daily Eagle. Pilot Project Promotes `Inclusive Flood Insurance’ in Vulnerable Areas.