On May 14, 2011, in what had to be an extremely difficult decision, the U.S. Army Corps of Engineers opened the Morganza Spillway in Louisiana to divert record-high Mississippi River water levels away from more densely populated metro areas like Baton Rouge and New Orleans. However, the result is that many homes in otherwise low-risk zones were then placed in the path of dangerous floodwaters.
Our Spatial Solutions division conducted a study of potential flood damage caused by this diversion and found more than $2 billion in residential property exposure. To develop the report, we determined property exposure to flood impact based on the potential inundation maps produced by the U.S. Army Corps of Engineers. Using comprehensive parcel-level property databases and analytical models, our team analyzed 787, 623 residential properties in 22 Louisiana paraishes along the potential inunation pathway to determine property value and estimated risk.
Lenders and investors who service mortgage portfolios should find it interesting that when compiling the flood risk numbers, we were not only surprised by the more than $2 billion in potential residential property loss, but also by the percent of homes now in the path of floodwaters that are not located in a FEMA 100-year flood zone. Of the 21,272 homes in the area exposed to the waters flowing into the Atchafalaya basin, 21 percent are located outside of FEMA flood zones, representing more than $400 million in potential property damage. Thankfully, the actual flooding was far less severe than anticipated due to cooperating weather patterns as well as quick action taken by residents and local government officials.
The chart below highlights the specific numbers, percentages, and home values of the study's properties that are located in a flood zone but not a FEMA flood zone and therefore, potentially not covered by mandatory flood insurance. Our Flood Risk Score is a more advanced and precise flood risk assessment tool that can help identify loans within a portfolio that include:
- High-risk properties outside of designated flood zones
- Lower risk properties insides these flood zones
- Additional key risk factors such as areas along rivers, or in the proximity of levees or dams
Our highly accurate and current property, location-based data and analytical applications comprise distinct and innovative products that address exposure and risk management needs. Fill out the short form to the right to learn how our team of Ph.D.s has taken Natural Hazard Risk Assessment to a new level.
