The editors of Bloomberg second the observations I made in my post of a week or so ago. Here’s it’s opening:
Florida’s home-insurance business was in trouble even before Hurricane Ian tore across the state last month. Big insurers were taking their business elsewhere, smaller ones were going broke, costs due to litigation and fraud had soared, and so had premiums. The private market was pulling back as the risk of weather-related damage mounted, leaving homeowners to buy protection from the state-backed Citizens Property Insurance Corp. and the federal National Flood Insurance Program — or else to go uninsured.
This creaking system could be flattened altogether by Ian. Expect an epidemic of new litigation as insurers and policy holders fight over what destroyed their homes. (Standard policies cover damage from wind but not from flooding.) Costs to private insurers alone could reach $63 billion. This worsening mess proves, for the umpteenth time, that rebuilding homes and other structures isn’t good enough: The public and private treatment of weather-related risks needs to go back to the drawing board.
and here are a few more nice snippets:
Insurance is a crucial part of the problem. Correctly priced protection for buildings in high-risk areas would be unaffordable for many low-income households. This squeezes the private market and leads the federal government to cover flood-related risks, often charging premiums lower than they should be. Put that another way: The federal government helps families live in places that jeopardize their own (and everybody’s else’s) wealth.
There are some places in the continental United States that are more costly and risky to live in than others. Traditionally, those areas have had lower populations. For the last fifty years the populations of those areas have been rising sharply and I would claim that the subsidies being provided to live there are among the reasons why.
Here’s their conclusion:
Layer upon layer of hidden subsidy pushes the same way, separating choices and their consequences. Mortgage securitization, for instance, obscures differences in location-based risks attached to particular loans, meaning that borrowers in low-risk places end up supporting those inclined to gamble. (Fannie Mae and Freddie Mac, taxpayer-supported quasi-government entities, helped develop this model.) Another example: When infrastructure is rebuilt after a hurricane, the cost isn’t confined to those who like the odds of living in a high-risk area. The list is endless. Despite its narrow focus, one recent study counted numerous actual or proposed federal policies on weather-related disasters that invite added risk.
No doubt, the political obstacles to better aligning risks and incentives are daunting. A pattern invariably repeats itself: Disasters strike, public funds (understandably) flow to help the victims, and the underlying problems only get worse. Still, policy makers owe it to voters to look beyond relieving the immediate hardships and attend to fundamentals. An approach that prioritizes rebuilding and carrying on as before, rather than reducing risk and improving resilience, is a formula for continually escalating harms.
Nearly a third of the U. S. population lives in just three states. That was true 200 years ago, too, but the states with the largest populations back then had large populations before Columbus and as long as anyone can determine. The three states with the largest populations now had small populations 200 years ago. Only modern society and technology have made them livable.
Moron Building in the Flood Plain because God gave Us these LANDS and His CONSTITUTION makes it Right.
All you are going to achieve is to make more people’s lives worse, but they are not the people causing the problem. Most of the people complaining are the problem.
Hotels, resorts, amusement parks, etc. will be built wherever there is an acceptable return on the investment, and the people who provide the acceptable return on that investment are the people who do not live there. Also, wealthy people will live wherever they damn well like.
Since the robots have not taken over yet, somebody has to do the jobs required to run these places, and somebody will move there to take that job. In addition, these workers require services, and this means more workers are needed.
So, people will live there, but by increasing the housing cost, they will rent. Most likely, the places they rent will be structurally worse than the house they had.
The better solution would be to prohibit anybody from leaving their state without a permit. Goods and services would be treated the same. So, fuel produced in Houston refineries would stay in Texas, and Wheat grown in Kansas would stay there.
This would solve the LA port problem, and the climate crisis will be resolved in a few years.
Because of flood insurance limits, it does not affect the wealthy or commercial property. Ending the federal program will not stop anything.
Homeowners insurance is a different matter. No state can force any insurance company to write policies in their state. Therefore, each state must make it possible for an insurance company to make money.
By the way, where do you think all those people are going live once they are forced to move? (Hint: They are your future neighbors.)
I’m sure you are aware of Chicago’s history.
One of the most impressive projects ever attempted in my view was lifting the entire downtown area of Chicago, what was it, eight or ten feet, with timbers and manual jacks, out of the flood plain that had developed by the lake. Back when it was the city with Big Shoulders.
And to think it was done without federal funding or support.