Building in the Flood Plain

The flood plain of the Mississippi has some of the most fertile, easiest to till land in the country. People build there for because it’s desirable.

But there are risks as well. The Mississippi floods. Sometimes it floods a lot; sometimes just a little. You never know.

When you subsidize building in the flood plain, that is to say when the federal government provides flood insurance at less than the cost that would be demanded by private companies, it encourages people to build in the flood plain.

That isn’t fair. Practically by definition those who don’t build in the flood plain are subsidizing those who do.

24 comments… add one
  • TastyBits Link

    You might want to check your homeowners policy for the coverage of a creek overflowing and flooding your basement. I would suggest checking before it happens.

    … the most fertile, easiest to till …

    So, it would be better to farm the least fertile and hardest to till. Gotcha.

    I have noticed that few people vacation in Iowa cornfields. Who do you think provides the services for beachgoers? Gas stations, restaurants, etc. require people, and those people are not PE Investors or NYC retirees.

    I noticed that Nova Scotia and Newfoundland have been added to the list, and I am still waiting for the calls to depopulate NYC. (A lot of people in NYC learned that they needed flood insurance.)

    You will be happy to learn that insurance rates are going up in Florida and Louisiana. So, a lot of people will be forced to move. Maybe, they will move to Nevada and start farming.

  • steve Link

    I am not completely opposed to subsidies for people for insurance in those areas but there need to be qualifications, granted some of this might not be easy. If its a vacation home or for retirement you should get no federal subsidy at all. Besides insurance you should also pay for FEMA rescues. If we are talking about port facilities and people who work there, these help support the national economy. I have no problem with federal subsidies. If you live locally and work then I think the state should subsidize the insurance. If they dont you end uo with wing nut welfare. The states brag about low taxes but everyone else is providing tax money that helps those states keep their taxes low, without any benefit to the other taxpayers.

    As an aside 4 states dominate FEMA spending. Texas, California, Florida and North Carolina. The first three are at least our most populous states. The rest at the top of FEMA spending are southern coastal states and midwestern tornado states.


  • Drew Link

    I think what Tasty and steve are alluding to is that its a little more difficult than a strict risk adjusted insurance scheme. If you live in Chicago a portion of your taxes go to law enforcement. Until recently anyway, I don’t think Gold Coast residents were as heavy users of police services as the residents of N Lawndale.

  • Actually, I’m not “completely opposed to subsidies” (as steve put it) either. However, I think that, just as with building in the flood plain, “frequent flyers” should be discouraged. For example, some areas that are particularly prone should be public domained at some point.

    What we shouldn’t have is for 1) everybody to want to live on the coast but 2) having people who don’t live on the coast bear the costs of those who do.

    Here’s an example of what I’m talking about. The FEMA spending per capita for California ($/population of California) is $164. The FEMA spending per capita for Illinois is $6.90 ($/population of Illinois). Texas is $354. Florida is $403. Hawaii is $249. New York is $27.88. Indiana is $4.39. There’s something wrong with this picture.

    Note that this is not strictly a matter of Red states vs. Blue states.

  • Grey Shambler Link

    That’s the problem with turning a large river into a drainage ditch,
    can’t spread out to soak in.
    I believe some changes were made after the catastrophic floods in ‘93.
    Such as lowering reservoirs over winter and opening levy’s to farmland, farmers probably still get disaster payments when it floods but that’s cheaper than flooding cities.

  • TastyBits Link

    Unless I am mistaken, Illinois is not self sufficient. Illinois should start pumping oil and refining it into fuel, heating oil, plastics, chemicals, etc. Illinois should open a world class amusement park, and Illinoisan beachgoers can vacation on Lake Michigan. You can keep your retirees, as well.

    Also, stop polluting the water. The shit you all dump into the river ends up down here. Maybe, Illinois should pay for part of our water treatment costs.

    You will be happy to learn that many of the Katrina evacuees never returned, and the areas where they lived have become blighted. Some people moved, but as they learned last year, nature has a way of ruining your plans.

    I have paid for 20 years of war because a few people want to live and work in tall buildings, and at one time, my tax dollars were used as reinsurance for terrorism riders. I also pay to help Ukrainians. People who believe that arming Ukraine (or anywhere) should foot the bill.

    FYI: Flood insurance limits are $250,000 for structure and $100,000 for belongings, and they do not reimburse for just anything. Furthermore, flood insurance does not reimburse for non-flood damage. For my homeowners, I have a rider for wind damage.

    For a large scale event, I would do better without flood insurance. You would pick up the tab.

    Welcome to my world. Hopefully, your home in Naples did not get hit too bad or lose your irreplaceable items.

  • Drew Link

    Again, I think Tasty is simply pointing out the complexities.

    Also, Tasty, I’m in Bluffton,SC now. (the mainland side of Hilton Head)
    On Friday morning we were square in the middle of the Ian cone. A 4-6 ft surge was predicted. But as the day wore on the storm simply drifted north, eventually hitting between Pawly Island and Myrtle Beach. And they got that kind of surge. We didn’t even get as much rise as a king tide.

    But in support of Dave’s point, here in my development – right on the Colleton River just a few miles from the Atlantic- homes are built up. Like 10 feet. We could handle almost any hurricane without flooding the main floor, although we did prophylactically moved the cars.

    Contrast with Naples, and I know the areas that got hit very well, the homes are on the beach at sea level. For a distance of about a quarter+ mile in they had no chance. Just no chance. People I know telling stories of people having to swim to safety. Water 3/4 up to the ceiling. Homes and clubs simply washed away.

    But if one steps back. Tornados in the midwest. Floods in the SE or NO, TX, or even NJ. Wild fires and earthquakes in the West. And so it goes. Its very hard to properly allocate costs.

    Get a map and check out the area called Port Royal at the south end of Naples. Wiped out. This is some of the most expensive RE in America. Like buying just a lot is a $15-$20MM event.

  • TastyBits Link

    I thought still had the house in Naples. I am glad the second landfall missed you all.

    FEMA is not going to be much help to the people in Port Royal. I am sure some of them have a golf club collection worth more than $100,000, and I suspect many have a kitchen worth more than $250,000. They may qualify for an SBA loan, but it is unlikely they are getting any “freebies” from the government.

    The people who need help are the ones who provide services to them. Very few people move the family to a trailer park in Florida and get a job as a convenience store clerk. It is not that nice.

  • Drew Link

    The Port Royal crowd is probably mostly self insured. And you are right, people coming in from East Naples are the ones to worry about.

  • steve Link

    I said it might not be easy but there are things which I think should be doable. I dont think most of these are workable in tornado areas, but some could apply.

    If it is a second home then you dont get FEMA money or subsidized insurance. Set income limits. If you make less than X number of dollars you get FEMA monies. You should eligible for state subsidized insurance. If the house is valued at over $1 million (set another number if you like) you dont get even that $250k or $100k from FEMA.

    I think the issue is that for a lot of people like retirees or for vacation homes living by the ocean is a matter of choice. Even at that there are things you can do to lessen risk as Drew pointed out, but that costs money. Some people would rather others pick up that cost for them. (In high risk tornado areas you could also set construction standards for roofing to minimize risks, IIRC parts Florida did that after Andrew but only new building I think. Knowing Florida I expect enforcement is spotty.)


  • Drew Link


    All new construction must comply with code. It’s basically an anchoring system for the roof.

  • Andy Link

    I do think there should be conditions for subsidized insurance. In flood-prone areas, one condition should be a requirement to rebuild the structure to make it less susceptible to flooding. Two options – I’m sure there are others – are to raise the ground level, put the structures on stilts, or have the “ground” floor only be garage/storage space. Some places are already doing this.

    But it’s not just hurricanes. Many places in the US are vulnerable to extreme events or are sitting on ticking time bombs. The insurance industry and residents will surely get bailed out when the next big earthquake hits San Francisco. In the Pacific Northwest, you have neighborhoods being built that would be destroyed in another Mt. St. Helen’s – type eruption. Then you have cities like LA and Las Vegas that can only exist by importing tons of water. Much of the west will be water-starved in the coming years, which could likely affect power generation. Someone is going to lose in the battle over water, and those losses probably aren’t, won’t, and can’t be insured against.

  • Drew Link

    “…put the structures on stilts, or have the “ground” floor only be garage/storage space.”

    My house, and most of the homes on water in SE South Carolina. Although they tend to be concrete bases. In NE South Carolina, especially older homes, you literally see wooden stilts.

  • PD Shaw Link

    FEMA doesn’t pay much for tornados. Standard insurance covers them, and the FEMA formula is biased against less dense, less costly areas. The 10th costliest tornado in U.S. history hit the Peoria suburbs in November 2013, and the formula provided zero dollars.

  • steve Link

    The other part of this I forgot to note is the huge amount of fraud going on in the state. 79% of all homeowner’s lawsuits take place in Florida. Link goes to site that is industry oriented but I think the numbers are largely correct. About 70% of the amount insurers pay out go to lawyers and adjusters fees. When I lived down there it was generally acknowledged that the entire building industry and all related phases and businesses was rife with crooks. The number of people on the state subsidized system has doubled recently. I used to think of LA, Il and NJ as the really corrupt, crooked states but after living in Florida I thought they should be up there also. With so many homes in high risk areas insurance is going to cost a lot but the crooks amplify that.


  • TastyBits Link

    There is a reason people live in certain places. Usually, those places were in the least vulnerable location. Tampa does not get direct hits very often, and so, that is where a port is located. As the port grew, there was not enough room in Tampa, and people began building in the more vulnerable areas.

    Mobile is a good location for a port, but it is less protected. Pensacola exists mostly because of the Naval base, but it and the entire Florida panhandle coastline exist because of tourists from places where they complain about paying for what they have caused,

    Yes, wealthy people move into these areas, and they require less wealthy people to serve their needs. I am not knocking wealthy people, but this is the reality. As @Drew notes, FEMA money is chump change to him and his peers. Again, I am not against wealthy people.

    They benefit from the infrastructure that is rebuilt with FEMA money, but eliminating the flood insurance program is not going to directly stop them from building where they want.

    The more vulnerable areas are cheaper, and therefore, poorer people live there. It is not systemic racism. It is simple economics.

    FEMA has changed the way they calculate premiums, and some people will be priced out of flood insurance. So, they will drop it, but for large enough disasters, they will still get government money. Mortgage companies require enough flood insurance to cover the remaining loan, and some people will be forced to move.

    Moving is expensive, and when your main asset has become worthless, it is even harder. For existing homeowners, flood insurance affects the price. It is not fair to suddenly price people out of their home, but new construction is another matter. You could phase out the program over time, but when your basement floods, you may wish you had a policy.

    If you really want to fix the problem, decrease the population, and outlaw poor people. Otherwise, you need to stop drilling in the Gulf, to move the oil refineries and chemical plants north, and build amusement parks in cow pastures and corn fields.

  • steve Link

    Florida is also an extreme case when it comes to fraud in lawsuits in the real estate/insurance sector. Link goes to industry oriented site but think numbers are good. Florida has 79% of the nation’s homeowner lawsuits. 70% of the payouts go to lawyers and adjustors.


  • TastyBits Link

    Depending upon how close to the shore you are, ten feet is not a guarantee against water damage. You may understand storm surge, but this is for others that do not.

    The storm surge is not the water being pushed on-shore by the wind. It is a wall of water lifted by the low pressure. It is packed with energy, and it is the cause of most of the flattened structures, not wind.

    This is only for the eye of the hurricane. The winds are pushing water, and any rivers, creeks, or drainage canals will overflow because they cannot empty. Water is being pushed up these waterways and rainfall adding to them will further exacerbate the problem.

    For Katrina, it was just the water being pushed into the lake from the Gulf that caused the flood wall to buckle. My house flooded because the dipshit parrish (county) president evacuated the pump operators. Had the pumps been working, we would have been mostly OK.

    If something is coming your way, get out. Hopefully, you have a plan for your irreplaceables. Ammo cans are a good sturdy watertight container, but you should air them out. We use totes that we take with us, and for active seasons, we leave them by the front door.

    You really do not want to see your wife crying over a picture your daughter drew in kindergarten.

    Honestly, riding out a storm is exhilarating, but it can be scary at times. For hours, it sounds like your windows will blow in, and every 10 – 15 minutes it sounds like the roof will blow-off. Losing electricity sucks, but during the storm, you would need a whole-house generator.

    Be careful listening to the oldtimers. Today is not the same as yesterday.

    Again, you may know all this, but others reading may not.

  • Drew Link

    “..70% of the payouts go to lawyers and adjustors.”

    “Morgan and Morgan. For the people.” (snicker)

  • Drew Link

    Tasty –

    Yes, no modern structure will get blown down. (Maybe a direct CAT 5 would do damage) But water. Wow. People just don’t understand the mass being moved. Most of the problems are water.

    Here, the substructures are designed to be sturdy in a rapid surge, and they are louvered so that pressure does not build. The water flows through. The other problem is the tall pines. They can relatively easily be blown over and fall on a roof.

    We were watching the storm and were prepared to evacuate if it looked like a direct hit. The “old timers” as you say cite the barrier effect of Hilton Head wrt wind. But the water would come right up the May and Colleton rivers. Apparently Mathew hit here at a CAT 3/4 almost all the damage was water damage in low lying areas.

    My in laws were the only house on their block to not flood Naples. Literally 6 inches high enough. A solid driver and five iron away an entire street will have to be rebuilt. Flattened by water. People who decided to try to wait it out having to swim to safety. Really crazy stuff.

  • TastyBits Link

    Homeowners is not flood insurance. Louisiana is having a problem with insurance companies not writing policies, going bankrupt, or leaving the state. Since many of the same companies are in Florida, a bankruptcy there affects us.

    Many of the insurance companies cannot get re-insurance, and others have a credit downgrade. A credit downgrade affects mortgages because lenders require a minimum score. Usually, cheaper policies are from smaller companies, and thus, poorer people tend to get them.

    I cannot address the fraud issue. During the local news, every third ad is a law firm looking for people with Ida (2021 hurricane) claim issues. My father-in-law got a letter, and he lives in the middle of the state.

    I have no doubt that there is fraud, but a lot of these insurance companies are dirtbags. They refuse to pay legitimate claims. To be fair, a lot of the lawyers are dirtbags, and a lot of their clients are dirtbags.

    I suspect that it is mostly the smaller companies, but from what I have heard, State Farm is not a good neighbor. Your link is from an insurance industry source, and while it may be 100% correct, I am a little skeptical.

    While states can regulate the policies companies write, they cannot force companies to write policies. If Florida has a fraud problem, it will be solved, or companies will leave. Regulations are similar. Unfortunately, many people do not understand this, and they are willing to sue their insurer out-of-business.

    My homeowners is outstanding, but it ain’t cheap. It is through an agency with people who will help me. I was surprised that they paid to replace my roof, but I got the best one from an established company. (I have stopped telling people how much I pay for things.)

    You might want to do a statistical regression on the homeowners suing. I suspect they are mostly lower income and disproportionately minority. Is a low income black Floridian worse than a wealthy New York progressive? I would expect that “systemic racism” in Florida is off-the-charts, but maybe, your white privilege is showing.

  • TastyBits Link

    Those blow-out walls may help, but I would be cautious.

    A lot of those barrier islands are not what they were. I am sure that coastal erosion and subsidence have taken a toll.

    … solid driver and five iron …

    I assume it is close, but I need a Goofy Golf translation.

    (We went to Myrtle Beach for our honeymoon, and there were several courses. You should put on your fanciest golf duds, pack your best putters, and play a round or two. I would crawl over broken glass to see that.)

  • TastyBits Link

    I do think there is a lot of fraud, waste, and abuse with FEMA funds used to rebuild destroyed infrastructure.

    If I am not mistaken, FEMA paid to replace Charity hospital. The VA paid to replace the VA hospital, but FEMA may have paid some, as well. Now, both hospitals could have been cleaned-up and repaired, but the city and state decided we needed to become a medical center.

    Every traffic light was replaced, and I believe all the street lights were replaced. FEMA paid for debris removal. They also paid for ruined cars to be towed away, and there was some controversy over both.

    It is my belief that the city, state, and adjacent parishes (counties) took advantage of FEMA, and I am not alone. I also believe that the city is worse off because of FEMA money. New Orleans is not a state-of-the-art city, and most people like it that way.

  • Drew Link

    Tasty –

    I understand. You never know until it happens. But many of the homes were tested in Mathew. I am literally on the marsh. 40 feet. At low tide you can walk across to a peninsula, as the deer do. At high tide it looks like a lake. A surge would come in faster than the tide, so there would be a rush. But the homes are now built like fortresses. If I recall, Bob Sykes is a civil engineer prof and probably could describe the design considerations.

    It used to be that I could drive the ball 275 yards. Now its more like 240 – 250. A five iron is 165. So my abacus says up to 400 yards away from the in-laws. Probably more like 300 yards is where these homes were. So driver, lob wedge…………..

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