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The Compleat Wetlander: Identifying Opportunities to Reduce Flood Damages and Save Tax Dollars

“Floods are acts of God, but flood losses are largely acts of man.”

—Gilbert F. White

In mid-February I attended the 4th Gilbert F. White National Flood Policy Forum.  This is a triennial event of invited experts gathered together to discuss and develop recommendations on ways the nation can adjust and reduce threats posed by floods and hurricanes.

This year the forum focused on “Human Adjustments in Coasts – Adaptive Management in Response to Changing Hazards, Risks and Ecosystems.”  This was an ambitious agenda given that coastal populations are growing, monetary resources are diminishing and coastal storms and hurricanes have been increasing in intensity.  The increasing intensity of storms has been demonstrated along the Mid-Atlantic and Northeast coastlines this year.  Hurricane Sandy has been followed by a series of fierce snowstorms and nor’easters that have repeatedly pummeled the coastline causing widespread erosion and flooding.

Currently 38% of the U.S. population of 308,745,538 (2010 census) live in coastal counties including the Great Lakes.  Over 8.5 million people live in areas subject to coastal flood hazards either in the 100 year coastal floodplain or the 100-500 years floodplain.  While the terminology – 100 year and 500 year floodplain—is somewhat complicated, the bottom line is not.  There are millions of people living in areas where a coastal flood will occur. The only question is when? Ideally federal, state and local government policies should encourage people to move away from high hazard areas.   If so, it is not succeeding.  In fact, between 2000 and 2010 the number of people living in the 100 year coastal floodplain increased by a half million.   (See p. 19-20 Demographic Changes within Coastal Flood Hazard Zones of the United States: A Comparison between the 2000 and 2010 Census, 2013 Forum Participant Papers)

People love to live near water, but living near the ocean comes with risks.  It can be argued that by underwriting the cost of flood insurance and providing ever increasing amounts of disaster recovery relief the federal government supports putting people back in harm’s way.   It is also costly for taxpayers who end up underwriting risky development.  In the 15 years preceding Hurricane Katrina, the federal government bore approximately 26% of the costs of major hurricanes.  However since 2005 the federal government has paid almost 70% of those costs. This is an area of dramatically escalating fiscal spending that has received little attention.

Recently the Brookings Institute published a series of papers as part of their Hamilton project “Ways to Rethink the Federal Budget: Entitlements, Taxation and Revenues.” One of the papers included in the project, “Reforming  Federal Support for Risky Development,” described how $40 billion could be saved in over the next 10 years while simultaneously reducing risks to the  lives and property of Americans living in disaster prone areas.  Recommendations fell into three broad categories:

  1. Incentivize and otherwise implement higher disaster- resistant development standards for any type of federal support for new or reconstructed public and private housing, industry, and infrastructure investments.
  2. Require greater private and local cost-sharing of disaster costs.
  3. Further reform the National Flood Insurance Program (NFIP).

Recommendations in the report include these actions:

  • lowering the premium subsidy for crop insurance
  • eliminating subsidies for risky development
  • investing in pre-disaster mitigation
  • improving zoning and environmental regulations
  • removing tax deductions for damaged property not in compliance with federal standards
  • tying  relief to communities’ future disaster mitigation,  and
  • working with private insurance companies to promote more effective coverage.

The full article is available here.

Current federal policy is not effective in reducing risks to communities.  Costs to taxpayers are increasing.  Constructive change is needed.  The answers exist.  Congress and the Administration need to take action.

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