Developers Increasingly Building In Areas Prone To Fire And Drought, Report Finds

As developers spread out in search of new areas to build homes, a new report finds that more than half of all houses built in the last decade are in areas prone to fire risk, and nearly half are in areas at risk of drought. 

While the majority of the U.S. housing stock is old — two-thirds was built before 1990 and just 4% was built in 2014 or later, according to U.S. Census Bureau estimates — new homes are increasingly being built in regions at risk of climate change-driven extreme weather. Homebuyers are also increasingly moving to areas with fire or drought risks as they seek affordable properties.

Approximately 55% of homes built in the last decade are at risk from potential fires, as developers build farther out from dense cities and into areas with higher amounts of flammable vegetation, according to a new analysis from Redfin. Over the same time period, 45% of new homes have been built in areas that put them at risk of drought, the analysis found. 

Those numbers have jumped substantially compared to past decades. In the 1960s, roughly 19% of newly built homes faced fire risk and 39% were in drought-prone areas.

“The areas that are already built are at lower risk of wildfire because they’re not surrounded by forest and trees — they’re surrounded by other buildings,” Brookings Metro Senior Fellow and economist Jenny Schuetz told Redfin.

But developers are increasingly building away from downtown areas due to a lack of land availability, Schuetz said.

“In the West, the wildfire-prone areas are in the undeveloped lands, and so the farther we push toward the undeveloped lands, the more houses are going to be at risk," Schuetz said.

Sun Belt states that have experienced a population boom since the start of the pandemic are also among those that have seen the biggest surge in new home construction over the last decade, Redfin found. 

Around 97% of all homes built in Arizona this decade, and 90% of those built in Colorado during the same time period, face fire risk. As much as 85% of newly built homes in Utah also face that risk, along with 91% of those built in California and 58% of those built in Florida.

“There’s no room left to build in Salt Lake City, so developers have been moving into the surrounding mountains, which are more prone to wildfires and drought,” Redfin Market Manager and Utah Principal Broker Ryan Aycock said in a statement. “Record-breaking temperatures and a lack of snow have turned these areas into tinder boxes.” 

Owners of existing properties also have to grapple with changes to at-risk areas, as increased temperatures lead to a higher risk of homes not previously in danger of fires becoming at risk. Approximately 40% of all homes in Utah, worth an estimated $220B in total, now face a high fire risk. 

Newly built homes in Arizona and Nevada are the most likely to face increased drought risk: According to Redfin’s statistics, 75% of all homes constructed in the last decade in Arizona, 86% of those in Nevada and 56% of those in Pennsylvania fall into that category.

“In Casa Grande — a city just south of Phoenix — builders are selling homes despite warnings that there may not be enough water to go around,” Phoenix Redfin real estate agent Heather Mahmood-Corley said in a statement. “Builders have done a pretty good job warning buyers about the lack of water, but many buyers don’t think much of it. Oftentimes, they’re more focused on finding an affordable place to live.”

Storms and flooding remain significant dangers for property owners in other regions, with 25% of homes built in the last decade at risk of flooding. The Northeast — with a large stock of older, underprepared buildings — could take a hit in the event of storms.