Economic Effects of Environmental Crises: Evidence from Flint, Michigan

In April 2014 Flint, Michigan switched its drinking water supply from the Detroit water system to the Flint River as a temporary means to save $5 million. Over 18 months it was revealed that the switch exposed residents to dangerous levels of lead, culminating in an emergency declaration in October 2015. This paper examines the impact of this crisis on the Flint housing market. The value of Flint's housing stock has fallen by $520 million to $559 million despite over $400 million in remediation spending. Home prices remain depressed through August 2019, 16 months after the water was declared safe for consumption. (JEL H12, I12, Q25, Q51, Q53, R31)

Automated summary

In April 2014, Flint, Michigan switched its drinking water supply to the Flint River, which resulted in dangerous levels of lead exposure for residents. The crisis led to an emergency declaration in October 2015. This paper examines the impact of the crisis on the Flint housing market, which saw a significant decrease in housing stock value despite remediation efforts.