A Flood Of Debt

By Stephen Tuttle | Sept. 29, 2018

Parts of Texas are once again under water. The Carolinas are in the midst of a slow-motion flood catastrophe. Major flood events, once a spring tradition along some rivers but rare elsewhere, are now commonplace.
 
What happens to those people who get flooded?
 
Many will be covered by the National Flood Insurance Program (NFIP), managed by the Federal Emergency Management Administration (FEMA). If you live in a Special Flood Hazard Area or within a 100-year flood plain and you have a federally-backed mortgage, flood insurance is mandatory.
 
Authorized by Congress in 1968 in reaction to the expense of disaster relief efforts and lack of availability of private flood insurance, NFIP was supposed to be self-sustaining, the premiums covering the claims. It didn't work out that way. 
 
A standard homeowner flood insurance policy covers $250,000 for the structure and $100,000 for the contents. But the premiums, on average, are less than $700 a year. Given the number of flood events in the last two decades it's pretty easy to see a balance sheet full of red numbers. 
 
In fact, the NFIP is drowning in its own flood of debt. Having outspent its own revenues long ago, it is currently $25.5 billion in the hole, taxpayer money borrowed from the government that is supposed to be paid back with interest. But it's also running out of money it can borrow; it is statutorily limited to less than another $6 billion, likely less than the claims from Hurricane Florence. 
 
We've drained or paved most of nature's natural flood protection and we now know where most of the flooding will occur: Florida, Louisiana and Texas make up nearly 40 percent of NFIP claims. Part of that is because they've been in the bullseye for hurricane-related flooding. But all three states also have substantial flooding absent hurricanes. The Houston area has experienced nine major flood incidents in the last two decades that did not involve hurricanes.
 
New Orleans, which averages one to two feet below sea level, has sections that regularly flood after heavy rains, and most southern Louisiana islands are slowly surrendering to rising sea levels. Parts of south Florida now regularly experience street flooding and worse during high tides.
 
Houston -- and the rest of surrounding Harris County -- is always a flood waiting to happen. It is low, flat and nearly covered in concrete and roofs. Rainfall has nowhere to go, and local creeks and their artificial bayous, created to prevent flooding, are quickly overwhelmed, causing more flooding.
 
The areas making the most NFIP claims are also the areas in which the most people are likely to have mandatory flood insurance because they keep flooding. 
 
What is surprising is we're willing to pay those claims in the same areas over and over again. The cost isn't just the number of properties damaged or the value of the property damaged, but the number of times the same areas are damaged. The NFIP will increase your premiums for repeated claims but they'll keep paying. 
 
Part of the problem is that flood maps used by NFIP are badly out of date for current climate realities. Our flood history is still mired in the 1980s. FEMA was in the process of updating those maps but the Trump Administration gutted all $190 million that had been budgeted. 
 
Houston, to their credit, is taking real, multi-billion dollar steps to try to mitigate their regular flooding: updated flood maps, dramatic improvements in local drainage systems, consistent regulation from community to community and, most dramatically, buying properties in flood prone areas with the intent of creating more green space that can absorb water. 
 
This last step is the most obvious and logical and gets the most resistance. Relocating people and businesses is controversial and expensive, but allowing them in areas we know will flood is foolishness. 
 
Houston has the right idea. We can't stop the rain and we likely can't stop the floods but we can get people and property out of the way and create more natural areas into which the waters can flow. We're already doing that in response to rising sea levels; the federal government has already quietly spent tens of millions moving entire small coastal communities being inundated.
 
We shouldn't have developed the barrier islands and coastal dunes, and drained the swamps that protected us from storm surges. But we did. We shouldn't let people live in areas we know are going to flood. But we do. 
 
The result is untold billions in storm damage along with untold billions in claims, not occasionally but regularly. We can't build enough dykes, levees, and bayous to protect us from the massive rain events now happening with increasing frequency.
 
We should relocate those repeatedly flooded. Or stop subsidizing their repeated rebuilding efforts. Or both.