Reducing Development in High-Risk Coastal Areas
As sea levels rise, how do we make coastal resettlement acceptable? What are the barriers to getting development out of our high-risk coastal areas? How much more are federal taxpayers willing to pay in taxes to keep existing and planned development in coastal high-risk areas? In light of elevated risk from sea level rise and increased storm intensity is the current system sustainable?
Data indicates that development in high-risk coastal areas is increasing faster than development in lower risk areas. What are we doing as a nation that encourages this behavior despite the known dangers? While we realize many people like to live next to water, be it coastal or riverine or lake, this development in increasingly high flood risk areas puts an additional heavy burden on all taxpayers to shoulder the rising costs from future flooding and storms.
When the NFIP was created in 1968, there was a belief that elements of the program like flood insurance and floodplain management regulations would reduce development in high flood risk areas. We now know that has not happened; development has actually increased in high flood risk areas, especially the coastal areas. The NFIP regulations do reduce flood damage costs of a structure compared to no regulations, but the regulations do not promote avoidance of high-risk areas; instead they simply add conditions like building elevation or code requirements to the development. Flood insurance costs have not been true actuarial costs, which would deter some of this development. Those regulations and flood insurance premiums are not based on flooding that will happen during the expected life of the building (which we now know is about 150 years for residential homes), but only address the amount of flooding that was predicted at the time the flood map was produced, which might have been quite a few years ago. Even worse, those flood elevation predictions were based on rainfall precipitation estimates that may be decades old.
Who encourages development in high-risk areas? It often starts with the developers who stand to profit as well as local politicians who see development as a means to increase their tax base for bringing revenue into community coffers. There are also national policies that encourage this type of development, including the Disaster Relief Act, where the federal taxpayer will pay from 80% or 100% of the disaster costs when a development gets flooded. So while the community gains the benefits of the development, the federal taxpayer is stuck with the costs — over and over again. Governmental policies (at many levels) that effectively hide or ignore growing risk are also to blame. All too often, we have failed to honestly and clearly identify those areas of growing risk, which are or will soon be so risky that a proactive relocation of development and repurposing toward recreation, or natural habitat preservation, or other flood-tolerant-type uses should be the overall, longer-term plan.
Are there approaches that will reduce development in high-risk coastal areas? Yes, some we have seen around the world involve flood insurance and mitigation. In Australia, for example, flood insurance is private, not backed by the government. A recent report indicates that premiums in high-risk coastal areas in Australia will increase to $30,000/year. That’s a price tag that will deter lots of new development. What will likely happen to existing development in these areas is that home values will drop, those who can afford it will move out and eventually those high-risk areas will be occupied by those who don’t have flood insurance and who will lose everything when the flood happens. Australia does not have a generous disaster relief program. In the UK, insurers mostly will not provide insurance for homes below the 0.2% flood level.
What new mitigation options might be possible? One thing being considered in California is buyouts ahead of flooding, then allowing the owner to stay in the home until flooding occurs. This would overcome concerns by a number of homeowners who are older and feel they will no longer be around when the next flood happens anyway. Some FEMA mitigation programs have identified buyouts of flooded damaged homes, but it takes three-to-five years to get through the process and many homeowners have gotten discouraged, made small fixes to their home, and moved on. We will need to streamline this process for it to work effectively.
Suggesting communities should plan to retreat from high-risk coastal areas is not a popular option, so many communities say they won’t do it. Would that change if we removed incentives to stay? It is clear we need to change our terminology — some have suggested resettlement instead of retreat; which has a totally different context. Others think buyouts favor higher income neighborhoods because (1) the higher value of the home results in a higher benefit/cost ratio to obtain funding; (2) higher income owners can likely afford to accept current value and pay for moving to other property. Lower income homeowners cannot afford that, but mitigation programs in FEMA do not use the Uniform Relocation Act that helps the homeowner find and afford comparable housing. The HUD CDBG-DR program does, as do some USACE and USDA programs, but the bulk of mitigation is now coming from FEMA.
Resettlement should work, and with some policy changes to better discourage development and habitation in high-risk coastal areas, we may make some progress. There are many pieces that need to be created and put into place, but if everyone recognizes the true costs of the current approach, in light of future flooding conditions, we can make progress.
