Long-term Economic Impacts of Repeated Flooding in East Palo Alto, CA

Presidential Major Disaster Declarations (PDs) are a key factor in determining the availability of federal grants and low-interest loans to support housing recovery in the United States. However, PDs are only issued after large disasters. After a disaster that does not trigger a PD, uninsured, lower-income households may be forced into debt to cover home repair costs. In the long term, paying off this debt reduces households' consumption, creating recovery challenges and impacts on the local economy. This study develops a methodology to evaluate long-term disaster impacts and uses it to investigate how PDs influence recovery. We present a case study using the city of East Palo Alto in California and demonstrate how PDs affect disaster outcomes under multiple flood hazard scenarios. Results show that a 20-year return period flood without a PD may lead to greater long-term losses than a 100-year return period flood accompanied by a PD and that issuing a PD can reduce long-term consumption losses for lower-income households by more than 50%. These results highlight that cities must adapt to dealing with repeated, localized flooding events that federal aid will not support.