Imagine for a moment that you are standing on the pristine shores of Florida’s Gulf Coast, where the sand meets the endless blue of the ocean. It’s a vision of paradise, the kind of place you dream of building a home.
But that dream has a dark side.
The very thing that draws us to these picturesque coastal areas, close to water, also makes them dangerous. Hurricanes like Helen and Milton can change lives in an instant and leave devastation in their wake.
But there is a contradiction here. Despite these well-known risks, people continue to build homes along coastlines. why?
The answer lies in a surprising culprit. It’s cheap flood insurance that is subsidized by the federal government. Although the program is intended to be a safety net, it unintentionally encourages more people to build in dangerous directions, increasing the human and economic costs of natural disasters.
To understand how we got here, we need to explore the unintended consequences of seemingly rational policies.
trap of good intentions
Federal flood insurance was created in 1968 through the National Flood Insurance Program (NFIP) and was designed to provide affordable coverage to homeowners in high-risk areas. Private insurance companies had long left the flood insurance market because payouts were too unpredictable, but the federal government stepped in after a particularly devastating flood in the 1960s.
The idea was simple: make insurance available in places where it is not available on the private market. Homeowners would be protected and communities would be encouraged to adopt better floodplain management practices. In theory, this was a safety net for individuals and a push toward smarter development policies, a win-win situation.
But in reality, the availability of cheap, subsidized insurance had a very different effect.
It encouraged people to live near the very dangers the program was intended to protect them from. When insurance becomes a political issue and politicians focus on affordability rather than accurately reflecting risk, the real dangers are obscured. As a result, people act as if those risks don’t exist at all.
The final result? More homes are being built in flood-prone areas, and disaster recovery costs are spiraling out of control.
Problems with the “American Dream”
There’s something quintessentially American about the dream of owning a home by the water. It is a symbol of success, a testament to our ability to tame nature and carve out a little paradise. But in the pursuit of that dream, we have overlooked an important truth. That is, nature cannot be tamed and the coastline is turning into a dangerous landscape.
The federal government’s well-intentioned efforts to democratize the American Dream have unwittingly created a scenario in which that dream has hidden costs, costs that grow with each hurricane season. As the climate changes and storms become more intense, the mismatch between the real risks of living on the coast and the perceived risks created by cheap flood insurance will become more pronounced.
To make matters worse, the rebuilding costs, paid by federal disaster relief programs and federally paid insurance money, are being borne by all taxpayers, not just those who choose to live near the coast.
In essence, we have socialized risk while privatizing reward, encouraging unsustainable and dangerous patterns of behavior.
Reconstruction cycle
This is where the contradiction deepens.
Every time a major flood or hurricane occurs, the same homes in high-risk areas are rebuilt, often with help from federal disaster aid and insurance funds. These are known as recurring loss properties. Homes have been flooded and repaired many times, only to be repeatedly set back on the path of destruction.
Why does this happen? Because when cheap insurance becomes available, there is no economic incentive for homeowners to move, redevelop to a higher standard, or build elsewhere. . They have no reason to believe that the next flood will force them to relocate.
This system makes it easier to stay in place and rebuild, perpetuating a cycle that gets more expensive year after year.
So as new development begins and older homes are renovated, coastlines become increasingly congested, while the risk of catastrophic flooding continues to rise.
break the cycle
If we are serious about mitigating the human and economic costs of flooding, we need to rethink our approach to federal flood insurance. One solution might be to phase out subsidies in the highest-risk areas and allow premiums to reflect the real cost of living in flood-prone areas.
This will force homeowners and developers to make more calculated decisions about where to build and live and how to reduce flood risk.
But this is only part of the solution.
We also need to change the incentives for building in coastal areas by ensuring that development meets new, higher resilience standards. The key is to use market-based solutions that encourage smarter, higher-density development while reducing the risk of flood damage.
For example, lot subdivisions, upzoning, and accessory dwelling units (ADUs) can be allowed in low-risk areas to increase density and affordability while preventing further sprawl into the most dangerous flood zones.
Providing these options allows people to live in coastal areas and build taller, fortified homes that are more resilient to storm surges and flooding. These zoning changes create smarter growth opportunities without increasing development area in high-risk areas.
It doesn’t mean giving up coastal living. It’s about making it safer and more sustainable.
Living by the coast may seem like a dream, but if paradise comes at the price of disaster, it may be time to wake up.
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Former state Sen. Jeff Brandes is the chairman of the Florida Policy Project.
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