Do Minorities Pay More to Avoid Flood Risk?

<div> Black and Hispanic homebuyers pay 3% more than white buyers for equivalent housing </div> <div> outside flood zones but only 1% more inside flood zones. Using 26M repeat-sales </div> <div> transactions (2000–2020), I show that this gap widens with the salience of flood risk </div> <div> and with the relative scarcity of safe housing, and is partly attributable to differences </div> <div> in the racial composition of sellers across zones. A search-based framework </div> <div> rationalizes these patterns as the product of constraints faced by minority homebuyers </div> <div> in tighter housing markets. As climate change expands flood zones, access </div> <div> to safe housing for minorities may become progressively more costly. </div>