Dallas, TX –
People should be allowed to develop their property largely as they see fit, but government policies shouldn't encourage unwise development, nor should the public pick up the tab when people build in areas at high risk of disaster. The aftermath of Hurricane Katrina's pounding of the Gulf Coast provides an opportunity to examine federal programs like federally subsidized flood insurance that put people and the environment in harms way.
Ninety percent of all natural disasters involve flooding. Although they are called natural disasters, many would not be nearly as destructive had people not developed property in high risk areas. Flood damage claims have more than doubled since the first half of the 20th century to more than $6 billion per year in the past ten years.
The National Climactic Data Center says that increased coastal development is responsible for the increase in losses due to hurricanes. Coastal development exploded during the past 30 years. As more coastal property has been developed, the remaining undeveloped parcels and those already built upon have increased substantially in value. In addition, many coastal properties have been redeveloped from lower valued to higher valued uses.
This development has often come at the expense of coastal wetlands, which would otherwise take some of the brunt of the storms and thus reduce the damage caused by them.
The 1968 National Flood Insurance Program provides insurance for areas, like the coast, considered at risk of flooding. It was intended to provide temporary flood insurance to property owners who were unaware of the risk of flooding in their area. It is hard to believe that anyone living on the coast was ever unaware of the risk that tropical storms and floods posed to their homes. Regardless national news coverage and full-disclosure mortgage and insurance requirements, long-ago ensured those currently living on the coasts were aware of their area's flood problems when they purchased or developed their properties.
Federally subsidized flood insurance encourages coastal overdevelopment. Indeed, more than half of all Americans live within 50 miles of a coast and each day more than 3,600 additional people move to the coast. Researchers at the Heinz Center determined that in the absence of federal insurance and flood control programs, development density in the highest risk zones would be 25 percent lower than in areas at low risk for floods.
Today federal flood insurance covers more than 4.5 million homes, many of which are built, rebuilt and upgraded in areas at risk of hurricane and flood damage, at taxpayer expense. The national flood insurance program has paid more than $1 billion for at least 10,000 properties with four or more losses, or two or more losses where payments exceeded the property value.
Federal policies that encourage coastal development harm the environment as well. Coastal development displaces sensitive wetlands. Today, less than half of our original 220 million acres of wetlands remain and more than half of that loss is due to development. Up to 43 percent of federally threatened and endangered species rely on wetlands for survival. Wetlands also improve water quality through filtration and often provide the same level of flood control as expensive dredge operations and levees. For instance: the Congaree Bottomland Hardwood Swamp in South Carolina eliminates the need for a $5 million waste water treatment plant.
Ending federal boondoggle's like the NFIP program would reduce high-risk development while conserving environmentally and economically significant wetlands. The American public and the environment would benefit.
H. Sterling Burnett is a Senior Fellow with the National Center for Policy Analysis, based in Dallas.
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