Noah Was Prescient

Recently I touched on the matter of climate risk and the implications this has for our choice of where to live, the market impacts on the price of our homes, the costs associated with insuring against large losses and the cumulative impact on our communities.  

As the chart implies the incidence of flooding continues to rise over time.   

The National Flood Insurance Program (NFIP) is broke.  In debt to the US Treasury to the tune of $20 billion, it is required to pay interest on that debt.  And the program's interest burden amounts to $309 million every six months - money that otherwise would go to disaster response.

The NFIP is over-subscribed by severity and increasing frequency of flood events.  The programs flood maps are outdated and do not provide data about specific location risks. And remarkably, Americans are increasingly moving to coastal and other flood-prone locations.  Stunningly, fewer and fewer of them are purchasing flood insurance.  The federal government issued just two flooding disaster declarations in 2000.  So far for this year along it has issued sixty-six.

This is nuts. 

Several weeks ago the New York Times covered the crisis America's flooding problem and the three responses Americans are embracing to it.  

Fight the Water

Construct walls, dikes, barriers, pumps and drains to keep the water out.  Think: Holland, Venice and New Orleans.  The problem with this is the hundreds of billions of dollars needed to build-out the infrastructure necessary to protect Miami and Manhattan from storm surges. Miami abandoned their plans.  The people didn't want to spoil the view. 

Live With It

Get used to the idea of water and live with it.  Spend the vast sums of money necessary to locate homes on utility poles and elevate (or move inland) critical infrastructure like power generation plants and water utilities.  Expand wetland habitat to soak-up inundations like a giant sponge.

Pack Your Bags

And beat it out of Dodge.  Retreat and relocate to another community away from the likely risk of storm surge and flooding.  When the reality of repeated losses and inability to obtain insurance at any cost sinks-in; the shear weight of economics will drive the people to the high ground.  Maybe we should simply stop building in flood-prone locations.

For your late-night reading are a handful of links with more on this topic.

This year the federal government restricted building in flood plains.

Just last month, climate-induced flooding impacted people across four continents.

There is a real estate boom in flood zones.  Here's why.