I woke up this morning to read a notification on my phone that New York Times was headlining an article on the National Flood Insurance Program. It's been a busy week for floods -- below is John Oliver's recent feature segment -- and so I'd like to share the perspective of a Ph.D. student studying how we estimate what future floods may be in a particular region and what that means for flood planning -- today I'll focus on domestic flood policy in the US.
If you haven't read the Times article, check it out before you keep reading this post (if you've used up all your free articles e-mail me) and if you haven't watched the Jon Oliver piece I highly recommend it as well. When floods or other natural disasters strike, our TV screens and Twitter feeds tend to flood with images of destruction as we seek charities we can trust with our canned food and money. Inspirational volunteers help rebuild communities, federal and state funds support reconstruction, and communities slowly return to life. Yet once the disaster passes, we're more likely to analyze how to respond better and faster to the next event than to ask whether we should be rebuilding in the very area that was just destroyed. In other words, we're still stuck in a paradigm of disaster response rather than one of risk management.
The clearest consequence of our reactionary system is the disastrous response to Hurricane María, which (like Katrina before) illustrates the perils of relying on the government for assistance. The stories of families and individuals highlighted in the New York Times article and John Oliver video add more evidence to the broken status quo. But while better and fairer resource allocation can improve disaster responses (and we are in fact getting better at responding to individual events), the real problem is more fundamental. A disaster response mindset means that we're continually trying to fix disasters after they happen, like Emergency Room doctors stuck in triage mode.
Though there's plenty of blame to go around, the National Flood Insurance Program (NFIP) is at the heart of the problem. Our current state of affairs is regressive: though NFIP covers many poor and middle-class Americans, it also covers many second homes and beachfront properties. It's also expensive to both the government (the NFIP is broke) and to homeowners. Most crucially, our current system has no mechanism for reducing future damages. Thus the New York Times article describes that in a community devastated by Sandy and threatened by a rising sea,
Much of Long Beach has been rebuilt since Sandy. Small houses like Mr. Clutter's are being torn down and replaced with bigger ones that sprawl across two lots.
Because NFIP premiums are heavily subsidized by the federal government, and payouts are (in theory) guaranteed, there is little incentive to avoid building in areas along rivers and coasts that offer lots of benefits but also experience high flood risk. In short, the NFIP has spent the past half century actively encouraging risky behavior. This has led not only to substantial spending in these high-risk communities, but has also made it easier for families like Mr. Clutter to borrow money to buy homes that are vulnerable to floods and which they can no longer sell. Despite the federal money they've recieved over the years, these families are trapped too. Yet the NFIP was created to do exactly the opposite of this, as the Times describes:
Policymakers thought an insurance program would be better than ad hoc bailouts. If crafted properly, it would make developers and homeowners pay for the risks they took.
So if the NFIP was an (unsuccessful) attempt to create a risk-based approach to flood planning, what does a successful, risk-based approach look like? Fundamentally, it means a focus on incentivizing people to reduce their risk exposure into the future. This happens in a couple of ways. First, risk should be priced into the risk of particular property, so that someone who wanted a beachfront property in Miami could decide whether the benefits of living there are worth the increased insurance premium. In the same way that people balance cost of living against amenities such as school quality or property tax rate, so too would people pay for building in an area more at-risk for flooding. Second, as Clarke and Dercon argue in their book Dull Disasters (available for free electronically, response to disaster should be "dull" (cleated with clear criteria for who and what gets aid) rather than negotiated on a case-by-case basis with government agencies. And finally, it means that local and regional-scale decisions about zoning and infrastructure reflect a coordinated plan to balance development with infrastructure needs and risk of future floods (or other disasters -- the thought process for earthquake, fire, and tornado risk management should be similar).
One key mechanism through which flood risk management would take place is a private insurance market, which allows people (and businesses, though I've focused here on homeowners) to pay a premium that reflects the value of their property and the likelihood of future damage. Private flood insurance would look more like car or home insurance than health insurance since a person's risk depends on the property they choose to purchase.
Yet because the government has spent the last half-century subsidizing risky building, there are millions of families who own homes they can't possibly afford to insure at market rate premiums. As the Times writes:
No one paid much attention until after Sandy, when the program fell deeper into debt with the Treasury. To help fill that hole, Congress in 2012 approved big increases in its premiums. But that caused an uproar when people got their bills. Two years later, Congress rescinded much of the increase.
Figuring out a fair way to support the families who own homes in flood-prone locations, while pushing a risk management paradigm in flood planning, will require making tough choices. And while eliminating flood insurance subsidies for future construction is a good idea, we also can't return to a system based entirely on disaster relief. This will likely require making private insurance mandatory for some types of construction (likely to be unpopular for those who can't afford to pay the premiums) and "buying out" some of the most risky homes. Such action will require compromise, and the end product will undoubtedly be imperfect. But if one thing is clear, it's that we cannot accept a continued reliance on event-by-event disaster management.
As an engineer and a researcher, I'm writing because I want to share how I think about this problem. Stay tuned in the coming weeks for some follow-up posts which will delve further into how we estimate the likelihood of flooding in a particular location, problems with our methods, and what that means for how we make decisions. I'll also write about how we can't just build our way out of flood risk. For now, if you have thoughts, questions, or requests for future topics please use the comments section below or e-mail me. Thanks for reading!