Flood risk is rising across the Eastern and Southern states from extreme rainfall, hurricanes and sea-level rise, according to a new report by Moody’s Ratings.

The increasing flooding hazard poses “significant credit challenges” that include rising property insurance rates, falling property values, “and the need for extensive investment in climate adaptation infrastructure,” the report states.

Aging transportation infrastructure that was not built for these conditions exacerbates the risk, according to the report.

Many residential and commercial properties in high-flood risk areas also lack sufficient insurance coverage, leaving the local tax bases vulnerable to economic disruption and decline, the report shows.

Addressing these flood risks is proving costly and governments and communities facing persisting challenges with insufficient coverage. While federal and state mitigation efforts can take years to implement along with being expensive, new types of insurance products may help to better spread costs, according to Moody’s.

Development trends are intensifying flood risks by increasing the amount of impervious land and continuing to develop or redevelop properties in high-risk flood zones. For example, between 2010 and 2017, New Jersey saw more than $4.6 billion in housing development in flood-prone areas (much of these areas had already been devastated by Hurricane Sandy in 2012), the report shows.

The report notes that state and local governments have the authority to implement zoning regulations to limit development in these areas and enforce new standards. Even though FEMA tracks building codes and the adoption of hazard-resistant zones, only 32 percent of hazard-prone areas have adopted the most current standards, according to the report.