When Hurricane Ida began to rain down on New York City in late August, it first played out like your classic summertime storm. Little did many residents realize just how much damage was caused until reports of widespread flooding started pouring in. All told, at least 22 people died in New York and New Jersey in Ida's wake, largely the result of flash flooding.
Of course, it's easy to point to the fact that Ida was an extreme weather event. But these intense bouts of rainfall are only growing increasingly frequent as climate change continues to rear its ugly head. And the more common they become, the more cities are apt to be threatened.
The infrastructure just isn't there
When Superstorm Sandy struck the East Coast in 2012, it was a wake-up call for city planners to start rethinking their infrastructure. Many urban areas aren't built to withstand heavy rainstorms and hurricanes, and often, flooding comes as a result of sewer systems lacking the capacity to handle sudden downpours.
What's scary, though, is that urban flooding isn't always linked to a major storm or well-recognized disaster. Flooding can occur following a nameless storm that delivers an intense amount of rain in a short period of time. And sometimes, all it takes is a modest amount of rain to flood a string of basement apartments in lower-lying areas, causing property owners a huge amount of money and stress.
The danger to real estate investors
It's easy to look at a map and note a property's proximity to a local lake or river -- proximity that could make it more prone to flood damage. But the scary thing about urban flooding is that it has little to do with actual bodies of water. Rather, it's a function of too much rain and improper infrastructure. And without a federal agency tasked with overseeing urban flood mitigation efforts, the problem has the potential to get worse in time.
The National Flood Insurance Program, for example, exists to identify water-adjacent areas that may need extra flood protection. But urban flooding often occurs in areas that fall outside of these flood zones.
All of this should serve as a warning to real estate investors -- particularly those who own properties with basements. Income property owners who rent out their lower levels should take special caution to install sump pumps, French drains, and other protective measures. But even above-ground units can sustain damage if a flood is severe enough.
Furthermore, investors in urban areas may want to consider exploring their options for flood insurance. Historically, flood insurance has really only been recommended for those residing in or around a flood zone, and FEMA has a map that can help identify what those are. But given that urban flooding could intensify in the coming years, it wouldn't hurt for investors to secure extra protection.
Most generic property insurance plans limit their coverage to water damage, not flood damage. Boosting coverage could be a reasonable first step for those who invest in urban markets.