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Blue-lining is Coming to a Bank Near You

Posted by Sami Thalji | Sep 21, 2021

Climate change is changing American homes and banks are starting to calculate their risks. In a new process dubbed “blue-lining” banks are now considering climate data, including business analytics, climate science, catastrophe and insurance modeling, when deciding a home's value and whether or not to make loans. Blue-lining is a process where banks draw lines of risk around certain neighborhoods and streets based on their susceptibility to flooding or climate-related disasters. The term is meant to be reminiscent of redlining, a product of institutionalized racism that restricted loan availability to homeowners in minority-dominated neighborhoods. Ironically, many feel as though blue lining is the modern extension of the racists red-lining process as it is now creating a new class of victims who have their climate risk determined by banks with almost zero transparency. Moreover, many of the same groups that were targeted during red-lining are also targeted during blue-lining as many of the homes and neighborhoods held by minority groups reside in areas most susceptible to climate change. Looking at the greater Tampa Bay area I wonder how long before lenders start re-evaluating risk in traditionally higher priced areas such as South Tampa where the streets flood after 30 minutes of strong rain. What will happen to that area if we ever take a direct hit from a hurricane and how will banks decide to lend in these areas will become a new market fundamental in an ever changing real estate environment. 

About the Author

Sami Thalji

Sami Thalji is a native Floridian, born in Clearwater and raised in St. Petersburg, Florida. Sami graduated from Osceola High School in Seminole, Florida before attending and receiving both his Bachelor of Science and Juris Doctor from the University of Florida in Ga...


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