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What’s the justification for the government subsidizing homes in areas that repeatedly flood? Admittedly I don’t know very much about this, but it just seems li

by 542458 1y ago

What’s the justification for the government subsidizing homes in areas that repeatedly flood? Admittedly I don’t know very much about this, but it just seems like simultaneously wasting money and increasing human suffering.

aleatorianator 1y ago
[flagged]
lotsofpulp 1y ago
Florida used to be a swing state, and money buys votes.
- brudgers 1y ago
  Participation in the Federal Flood insurance Program is available to all local governments everywhere in the US. It completely bypasses state governments and hence state politics.
  - lotsofpulp 1y ago
    The federal taxpayer subsidy to landowners in flood prone areas disproportionately benefits voters in some states, and the voters of some states have a disproportionate effect on national elections. Of course, that turned out to be a poor bet by Democrats.
    - brudgers 1y ago
      I guess that’s an opinion.
floatrock 1y ago
Perhaps a better framing is to consider whether there is a relationship between "actions the government focuses on" and "people who own waterfront property or benefit from developing underutilized flood plains"
AdamN 1y ago
Like most of these things it's advocacy and mission creep. It probably started off as a niche thing but as it expanded there are all sorts of groups that would lose if it disappeared: Realtors, title companies, local municipalities (police, teachers, etc...), mortgage companies, insurance companies (for all the other insurance). If they got rid of the subsidy people would move away and money would fly away from those locations.
- stonemetal12 1y ago
  Nope, it was pretty straight forward. It was the 1968 National Flood Insurance Act. Flood prone communities get flood insurance in exchange Gov gets to manage building standards to reduce damage caused by flooding. It was pretty similar to what we are seeing today. There was a hurricane and the Mississippi river flooded. Private insurance started pulling out so the Government decided to step up.
Analemma_ 1y ago
Concentrated benefits, diffuse costs. The people who benefit from subsidized insurance fight like hell to keep it, while everyone else shrugs because to them it’s just one more budget line item.
Spooky23 1y ago
Well, for one, Florida is one of the largest states and an economic powerhouse. It's business environment is completely driven by residential and vacation real estate. They have a regulatory and tax environment that is attuned to extract money from migrating old people and vacationers. Flood insurance has allowed proximity to water = $$$. Water is desirable, but banks dislike risk. People are attracted to the place to avoid income taxation. Anything that slows down the real estate flywheel is a political death issue, and Florida's unique position as an election kingmaker at the federal level gives it alot of power.
quickthrowman 1y ago
There isn’t a good one. The city of East Grand Forks, MN moved entirely after the 1997 floods when they realized that fighting nature is impossible, particularly on the Red River, which flows northward and virtually always floods due to ice dams downstream in Canada. The old town of East Grand Forks that was built on the floodplain is now a park, which is the best use for most river floodplains.
- FireBeyond 1y ago
  Meanwhile, when government tried to hit Camp Mystic (in Texas, where 27 people died in July) with a flood zone finding, they fought back in court to get the finding removed... ... and now, with one camper still officially missing, no body recovered, the Camp is eager to assure the public that they will be opened again for next summer ...
- brudgers 1y ago
  You can’t move Gulfport. Pinellas County is among the most built out counties in the country.
  - quickthrowman 1y ago
    Eventually the risk will be priced into homeowners insurance and nobody will be able to afford to live there anyways. It will happen faster than most homeowners in that area think.
    - brudgers 1y ago
      Home owner’s insurance does not cover flood. As I said elsewhere, twenty years ago the rule of thumb was private flood insurance ran 10% of insured value per year. That’s why the Federal Flood Insurance Program was created in the Nixon administration. Of course home owner insurance in Florida has been astronomical and hard to get for a long time because it covers wind damage and that’s most of the damage from hurricanes. The solution was a State pool (insurer of last resort) which by law had to be more expensive than any private option. The results were economically rational…remember banks require home owner insurance as a condition of mortgages. Or to put it another way, pricing risk is just table stakes. Pricing in profit is where the money is.
brudgers 1y ago
Without flood insurance banks won’t write mortgages and home ownership has been a Federal policy objective since at least the 19th century, e.g. the homestead act. To be clear, banks once wrote mortgages without flood insurance and that’s how places like Gulfport were originally built out. Not saying any of this is good. Not saying it is bad. Just saying it is.

by 542458 1y ago

aleatorianator 1y ago

[flagged]

lotsofpulp 1y ago

Florida used to be a swing state, and money buys votes.

brudgers 1y ago
Participation in the Federal Flood insurance Program is available to all local governments everywhere in the US. It completely bypasses state governments and hence state politics.
- lotsofpulp 1y ago
  The federal taxpayer subsidy to landowners in flood prone areas disproportionately benefits voters in some states, and the voters of some states have a disproportionate effect on national elections. Of course, that turned out to be a poor bet by Democrats.
  - brudgers 1y ago
    I guess that’s an opinion.

floatrock 1y ago

Perhaps a better framing is to consider whether there is a relationship between "actions the government focuses on" and "people who own waterfront property or benefit from developing underutilized flood plains"

AdamN 1y ago

Like most of these things it's advocacy and mission creep. It probably started off as a niche thing but as it expanded there are all sorts of groups that would lose if it disappeared: Realtors, title companies, local municipalities (police, teachers, etc...), mortgage companies, insurance companies (for all the other insurance). If they got rid of the subsidy people would move away and money would fly away from those locations.

stonemetal12 1y ago
Nope, it was pretty straight forward. It was the 1968 National Flood Insurance Act. Flood prone communities get flood insurance in exchange Gov gets to manage building standards to reduce damage caused by flooding. It was pretty similar to what we are seeing today. There was a hurricane and the Mississippi river flooded. Private insurance started pulling out so the Government decided to step up.

Analemma_ 1y ago

Concentrated benefits, diffuse costs. The people who benefit from subsidized insurance fight like hell to keep it, while everyone else shrugs because to them it’s just one more budget line item.

Spooky23 1y ago

Well, for one, Florida is one of the largest states and an economic powerhouse. It's business environment is completely driven by residential and vacation real estate. They have a regulatory and tax environment that is attuned to extract money from migrating old people and vacationers. Flood insurance has allowed proximity to water = $$$. Water is desirable, but banks dislike risk. People are attracted to the place to avoid income taxation. Anything that slows down the real estate flywheel is a political death issue, and Florida's unique position as an election kingmaker at the federal level gives it alot of power.

quickthrowman 1y ago

There isn’t a good one. The city of East Grand Forks, MN moved entirely after the 1997 floods when they realized that fighting nature is impossible, particularly on the Red River, which flows northward and virtually always floods due to ice dams downstream in Canada. The old town of East Grand Forks that was built on the floodplain is now a park, which is the best use for most river floodplains.

FireBeyond 1y ago
Meanwhile, when government tried to hit Camp Mystic (in Texas, where 27 people died in July) with a flood zone finding, they fought back in court to get the finding removed... ... and now, with one camper still officially missing, no body recovered, the Camp is eager to assure the public that they will be opened again for next summer ...
brudgers 1y ago
You can’t move Gulfport. Pinellas County is among the most built out counties in the country.
- quickthrowman 1y ago
  Eventually the risk will be priced into homeowners insurance and nobody will be able to afford to live there anyways. It will happen faster than most homeowners in that area think.
  - brudgers 1y ago
    Home owner’s insurance does not cover flood. As I said elsewhere, twenty years ago the rule of thumb was private flood insurance ran 10% of insured value per year. That’s why the Federal Flood Insurance Program was created in the Nixon administration. Of course home owner insurance in Florida has been astronomical and hard to get for a long time because it covers wind damage and that’s most of the damage from hurricanes. The solution was a State pool (insurer of last resort) which by law had to be more expensive than any private option. The results were economically rational…remember banks require home owner insurance as a condition of mortgages. Or to put it another way, pricing risk is just table stakes. Pricing in profit is where the money is.

brudgers 1y ago

Without flood insurance banks won’t write mortgages and home ownership has been a Federal policy objective since at least the 19th century, e.g. the homestead act. To be clear, banks once wrote mortgages without flood insurance and that’s how places like Gulfport were originally built out. Not saying any of this is good. Not saying it is bad. Just saying it is.