People are blindly buying homes in areas of growing flood and climate change risk in Sydney and it has to stop, a think-tank says.

The Committee for Sydney on Wednesday released a report highlighting fault lines in state and federal governments’ approach to disaster mitigation and emphasising the risks of continued development of flood-prone areas.

The Defending Sydney report says deciding to consider and measure climate risk in land-use planning is the first step to preparing for a changing climate.

“Sydney’s at a crossroads,” Committee for Sydney resilience director Sam Kernaghan said.

“We’re up against a housing crisis and a climate crisis – our success in solving housing is going to be judged on whether more or less people are at risk of natural disasters like flooding.”

He said data was available but often wasn’t public or used to inform land-use planning.

Meanwhile, each disaster was causing a shift towards more homes being unable to be uninsured.

“People buying homes in these areas have no idea of the risk they’re taking on, nor the costs being created for communities and government,” Mr Kernaghan said.

Australia-wide, natural disasters are estimated to cost the economy $38 billion a year, with that expected to hit $73 billion by 2060, the report said.

It called for Sydney to look to cities like Norfolk in the US state of Virginia which built an 80-year strategy to address flooding challenges due to sea level rise.

Local councils should also get more support to include and publicise climate risk in their existing hazard modelling.

Three key recommendations would integrate land use and hazard risk planning, better align funding and investment, and address the residual risk.

Federal MP Susan Templeman, whose bushy electorate covers the Blue Mountains and the Hawkesbury, hoped the report triggered an “evolution of planning policy”.

“As someone who represents a community in Greater Sydney that has been the worst-hit by fire and flood in the past three years, I welcome the detailed work in this report,” she said.

“We cannot assume ‘she’ll be right’, when we see the frequency, severity and breadth of disasters that we’ve already experienced, particularly when insurance is out of reach for so many people.”

The report was developed with engineering consultant AECOM, multi-council program Resilient Sydney and general insurer IAG.

– AAP