The Long-Run Environmental Consequences of Land Development

We study the long-run environmental impacts of land development activities using flood claims and land use data at the zip code level. Employing long differences and instrumental variable approaches, we find that an increase in developed land is associated with a significant increase in flood claims after 8 years over a 15-year span. This effect is primarily observed in land developed from cropland and tree cover and varies by the initial development conditions of an area. By linking land with the demographic characteristics of residents, our study demonstrates that the flood cost attributable to land development is not borne equally spatially or between demographic groups, with a few hotspots and minority neighborhoods experiencing higher costs.