Anonymous wrote:Thank you 16:18. Yours was the only really knowledgeable post on this thread. For those who keep saying that only government backed mortgages require flood insurance, please do some research. Or better yet try to get a mortgage or refinance an existing home in an area that is designated as an at risk for flooding zone. It won't happen. Mortgage banks are not run by idiots - they demand that their investments be protected.

I have private flood insurance in Bethesda. Poor city planning means downpours of 4 inches can cause runoff to flood my property.

They would not insure me if I lived in a floodplain, then you would need government backed insurance.

They also do a physical inspection of the property.

Anonymous wrote:Flood insurance should be priced on an actuarial basis across the country. Let them build wherever they want as long as they are carrying the costs for building there. Problem solved.

This. It won't happen though as people vote for officials who will get them flood insurance subsidies for their houses built in flood zones.

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Anonymous wrote:Flood zones are changing as global warming increases flooding and hurricanes. I really don't know what can be done to predict or stop it.

We could probably try to do something about global warming. That might help.

If agw wasn't totally fake I'd agree.

To use the Anacostia example, there are no houses on the Anacostia, at least in lower PG or DC. There are huge flood plain areas like Kingman Island, the Bladensburg Waterfront Park, Kenilworth Gardens and Anacostia Park.

Someone 150 years ago knew it would be foolish to build in those areas. However, developers in the last 50 years, along with government approval, went along with the idea that it would be ok to build in these areas elsewhere.

Simply foolish.

Houston will need to rethink its reservoirs and buffer areas, and consider more density to allow the bayou areas to do their intended, natural job.

Anonymous wrote:Flood zones are changing as global warming increases flooding and hurricanes. I really don't know what can be done to predict or stop it.

Sort of - floodplains are delineated by FEMA. They do not take into account climate change into the mapping process, it is based on historical data. Therefore, while the areas may be at an increased risk, the actual legal delineation does not change due to CC.

Anonymous wrote:Thank you 16:18. Yours was the only really knowledgeable post on this thread. For those who keep saying that only government backed mortgages require flood insurance, please do some research. Or better yet try to get a mortgage or refinance an existing home in an area that is designated as an at risk for flooding zone. It won't happen. Mortgage banks are not run by idiots - they demand that their investments be protected.

This. The interesting part of this will be as flood insurance rates increase through biggest waters, will the value of homes in the floodplain decrease? Or will that gorgeous house on the anacostia or bay be a depreciating asset because of climate change? This is a total conundrum for the real estate market that hasn't made it to the general public. If one recognizes that climate change will increase chance of flooding, FEMA will eventually update maps in their area, the insurance rates will increase due to maps and BW, will that waterfront house be sellable?

Thank you 16:18. Yours was the only really knowledgeable post on this thread. For those who keep saying that only government backed mortgages require flood insurance, please do some research. Or better yet try to get a mortgage or refinance an existing home in an area that is designated as an at risk for flooding zone. It won't happen. Mortgage banks are not run by idiots - they demand that their investments be protected.

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Anonymous wrote:No less regulations! You can't tell me what to do!

That is part of Houston's problem. 1. There is no code requiring detention ponds. 2. Lack of zoning has resulted in an additional 25% of the county being paved over the the last two decades. Pavement forces more water runoff.

Also, it's really flat, and the bayous have been widened but not enough. That is not a matter of regulation, but it is a way local and state government affects the problem.


A lot of wealthy people have rebuilt homes that stand several feet up off the ground. I am curious to see how they fared, or whether they got flooded out anyway.

That's insanity, and I didn't realize that's what's occurred there. We've lived in low lying, southern cities before, but all had retention ponds and zoning regulations.

Also, some think the flood insurance program provides incentive to build in unsuitable areas. IDK but I do know that something is wrong with rating if so-called 500 year floods are annual events. Houston.

http://www.marketwatch.com/story/harveys-ravaging-of-houston-is-perfect-reason-to-kill-the-flood-insurance-program-2017-08-30

So if flood ins is required for some mortgages [govt backed] shouldn't the mortgage be required to be for a property NOT in or adjacent to a risk zone?

Are there people who are on SBA loans for prior years repairs and now need another?

Good post 16:18. I'm quoted as the last PP [no indents]... Flood risk does change constantly and is therefore "subsidized" by the government. However, there should be at least a pretense of higher premiums in the flood zones and areas adjacent to those zones.

Those adjacent areas [spillovers] should be rated differently. When looking at a Houston fema map today I saw at least 1 low/no risk zone as an island in a map of risk. Since that area is not on a hilltop with a granite base one knows it could flood.

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Anonymous wrote:Flood insurance should be priced on an actuarial basis across the country. Let them build wherever they want as long as they are carrying the costs for building there. Problem solved.

What about tax deductions on top of the flood insurance? That gives federal money that otherwise would go to the treasury. Example-at a 35% rate you save .35 on every dollar of deduction.

Do you really think the people would stand for paying nominal tax rates? That isn't "money that would otherwise go to the treasures". The more likely outcome is that nominal rates would be reduced to roughly mirror current effective rates, that people would reduce their economic output (see the UK's recent experience), leave the country (see France's recent experience) or some combination of the above.

And no; you don't save ".35 on every dollar". You save .35 cents on every marginal dollar that would otherwise be subject to that .35 cent rate (ie, the amount of the deduction).

If you're asking about tax deductions for building in those zones, there is no reason not to give tax deductions to those builders/property owners that everybody else gets.

I understand the .35 on marginal dollars. That is money that otherwise would go to the treasury. Where else would it go assuming all other things constant? Any substantive changes after Ike, Katrina, Sandy? Do a sample and see your money subsidizing. My question is should flood insurance premiums more accurately reflect risk? Do an example for yourself. Should we all be paying for others beach/bay living AND/OR jurisdictions that ignore common sense zoning and urban planning?
http://www.npr.org/2016/08/26/491531827/after-hurricane-sandy-many-chose-to-move-rather-than-rebuild
On a far smaller scale Fairfax County is spending millions on levees for a persistently flooding area. Fox Beach on Staten island is a sensible solution.

All other things wouldn't remain constant. It is a widely accepted fact that people/organizations make economic decisions based on expected after-tax outcomes. There is simply no good reason to think that changes to the tax code won't alter human behavior and thus any argument that assumes all other things remain constant is an unserious argument.

I already said that flood insurance premiums should be based on actuarial analysis of risks with no subsidies.

If you're getting at removing general incentives through the tax code fhat end up benefiting those who build in risk-prone areas, you might as well remove those general incentives completely. First, I know of no area in that country that doesn't face natural disasters. Second, other areas of the country face this issue on a much grander scale.

You are not correct. Nowhere else has the massive flood potential. Now where have most FEMA dollars gone? NOLA and Texas. https://www.fema.gov/media-library/assets/documents/21068 65% o the 2001 Houston area flooding was not in flood zones. 2016 saw flood damage in areas not in zones. The zones do not account for spillover from adjacent flood zones. https://www.usnews.com/news/best-states/texas/articles/2017-08-30/flood-policies-plunge-in-houston-in-5-years-before-harvey

So if your property is zone x and in DC and you change some bushes whatever and get water in the basement should you be rated the same as a zone x next to a bayou area and spillway? KISS summary on the NPR article.

Major hurricanes are not 100% insurable. It isn't about actuarial premiums, it is about the timing of a low frequency/extreme severity event, such as a major hurricane, earthquake, tsunami. It isn't possible to build up enough capital reserves to pay all tens of billions of dollars in claims at one time. Also, there is no such thing as an "actuarial premium" for a property. Premiums that were based on covering the expected losses over time plus administrative costs would still would not cover the cost of a major hurricane. To cover major events, the premiums would also have to account for the size of the risk pool, the geographical spread of the risk, the amount of capital reserves, etc., not just the expected losses to an individual property. If you charged what the insurance industry thinks is actuarial, then you would have to jack up everyone's premium all over the country after every event in order to replenish the capital reserves, even though no one's flood risk increased. That is what private insurers do with wind coverage.

But we are still much better off selling as many flood policies as we can, because it is much more efficient to pay flood claims than not. Sandy flooded a lot of properties that did not have flood coverage. When the Mississippi River system flooded in Illinois, Iowa, Missouri, Kentucky, et al and levees failed, very few people had flood insurance. We end up subsidizing the uninsured and under-insured disaster victims, only we do it much less efficiently and the recovery drags out much longer. They get FEMA rental assistance, then maybe a trailer or longer-term rental assistance, a subsidized disaster loan, casualty loss tax deductions, and if it is a large event, the state and local governments get Community Development Block Grants that can be used to help homeowners recover. It ends up being a haphazard, inefficient, and corruption-prone systems that tends to favor people and constituencies with political influence and passes the relief money through a bunch of state and local governments, contractors, bankers, developers, who all skim a slice, instead of paying a direct insurance claim to the owner of the damaged property.

House Republicans are pushing the stupid idea of privatizing NFIP. If NFIP was run like a private company, it would have declared bankruptcy after Katrina, and then restarted under a different name using multiple LLCs to isolate risk areas, so now we would have NFIP Houston, LLC declaring bankruptcy while shielding NFIP Miami, LLC to keep banking its profits until a big flood event hit there. The taxpayers would still get soaked subsidizing the disaster, but private companies would skim off the premiums.

I also object to the statement in a post above that we know the flood risk and could easily set the premiums to cover the risk. You must never have owned property in a flood plain. Flood risk changes constantly. A new development 5 miles away in another town or county can dramatically change the retention and runoff of heavy rains or storm surge and you have no control over it. That is a lot of what has happened around Houston and in Baton Rouge. Baton Rouge's flood risk increased because of development outside its control upstream in neighboring parishes up to 30 miles away. Where there had been pine savannas that absorbed and retained heavy rains there now are paved streets and parking lots and drainage ditches emptying all the rain into the small rivers that meet in East BR.

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Anonymous wrote:Flood zones are changing as global warming increases flooding and hurricanes. I really don't know what can be done to predict or stop it.

Are you a scientist? Do you know anything about weather patterns? Do you know anything?

Much can be done to prevent the billions in losses that Harvey is predicted to cause.

First, rebuilding on flood plains must end. All building on flood plains must end. There should be no flood insurance for houses and any other type of structure built on a flood plain. If you choose to build on a flood plain, you're on your own.

It's a complicated problem, because avaricious governments and corporations and individuals have allowed tons of building on flood plains in the past, so all those structures must be relocated.

But to say or think it can't be done, is ridiculous. It can, and must be done. Period.

Should we also end building in Oregon and Washington, particularly west if the I-5 Corridor? Where do you propose we relocate millions of people to?

https://www.newyorker.com/magazine/2015/07/20/the-really-big-one/amp

Relocate millions? What doesn't need to be in Houston due to proximity to the Gulf CAN go elsewhere. Shipping, refining need to be there but .... KISS example. Exxon was Standard Oil of NJ in NY and NJ. Exxon scooped up Mobile in Fairfax County VA. Within the last few years that went bye bye. I knew people who now perform the same jobs in Houston.

How much vacant housing [needing rehab] on GOOD land for building exists in other areas? Not glamorous but there is Baltimore and Philadelphia. Fema had buy outs in NJ. People took it and left their more flood prone spots for elsewhere in NJ. There are people in Houston area who left NOLA after Katrina.

KISS: Should we end building in earthquake zones like the PNW and NorCal Bay Area?