Sea Level Rise Risk and Mortgage Approval Rates
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Keywords: Sea level rise, mortgage, loan acceptance, belief, climate risk
Abstract Type: Paper Abstract
Authors:
Meimei Lin, Geology and Geography Department, Georgia Southern University
Chengbo Fu, University of Northern British Columbia
Qiping Huang, University of Dayton
Salman Tahsin, San José State University
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Abstract
We study the relationship between sea level rise (SLR) risk and access to residential mortgage credit at the census tract level from 2018 to 2020. We estimate three levels of SLR risk, based on elevations from sea level, ranging from imminent to long-term risks. Our findings reveal that loan approval rates are significantly lower in census tracts exposed to all three levels of SLR risks. We also observed that climate risk beliefs are not a significant factor for locations under imminent risk, but in areas with medium to long-term risks, loan approval rates are influenced by SLR only if climate risk beliefs are high. Furthermore, both local and diversified banks lower loan acceptance rates in locations under imminent risk. However, local banks approve significantly more loans if the risks are medium to long-term, regardless of their size. In summary, our study highlights the significant impact of SLR risks on mortgage approval rates and their varying effects based on the level of SLR risks.
Sea Level Rise Risk and Mortgage Approval Rates
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Paper Abstract
