There indeed probably should be policy mechanisms in place that discourage people from living in areas prone to disaster. The cycle of cities being built, destroyed, rebuilt at great expense and destroyed again is simply unsustainable. But an ill-conceived law passed by Congress in 2012 — the Biggert-Waters Act, which was meant to provide fiscal incentives for people to relocate by removing subsidies from federal flood insurance — is a glaring example of the difficulties lawmakers face in justly implementing such mechanisms, and a strong indication that more thought, and other tactics, are required in using federal policy to create more resilient cities.
In a nutshell, Biggert-Waters raises flood insurance premiums for participants in the National Flood Insurance Program to levels that reflect the actual flood risk to properties, based on data from FEMA floodplain maps. This sounds benign enough, and proponents cite the preponderance of seaside mansions whose flood insurance taxpayers have been subsidizing for decades to give the bill a populist hue. But in reality, because of Bigger-Waters, huge numbers of middle- and working-class homeowners who live near the coasts are facing radical premium increases — up to a stupefying 5,000 percent for some New Orleans residents. This is the case even if their homes have never flooded and they adhere to NFIP guidelines previously put in place. These cost increases threaten to wreak havoc in coastal real estate markets as insurance payments eclipse even mortgages, and the potential for widespread negative economic reverberations is high. Whatever noble goal a piece of policy has, simply pricing people out of the homes they’ve lived in for years is not the best way to achieve it.
Movement is afoot to pass a new law that would nullify the Biggert-Waters premium increases, and among its supporters is Senator Maxine Waters, whose name adorns the original bill. Waters said she did not foresee the dramatic consequences of removing federal flood insurance subsidies — one cheeky op-ed in the Wall Street Journal jibed that her not knowing what was in her own law “seems plausible to those who have followed her career” — but now that her awareness has been raised she’s trying to right the wrong. Insults aside, a 2008 report by the U.S. Government Accountability Office, the fact-finding arm of Congress, explicitly states that the act’s elimination of subsidies, by itself, “would on average more than double these policyholders’ premium rates and may result in reduced participation in the NFIP over time as people either dropped their policies or were priced out of the market.”
So, someone in Congress knew what would happen if such a law took effect. The GOA report also includes several recommendations that would have softened Biggert-Waters’ impact on homeowners. The problem with the GOA’s proposals, says Robert Verchick, an environmental law professor at Loyola University New Orleans, is that they would have cost money in the short term. The proposals include things like increasing flood-mitigation efforts and allowing low-income homeowners to retain their subsidies. But such measures would conflict with a major thrust behind Biggert-Waters: to save the government money.
The NFIP — launched in 1968 because of a reticence by private insurers to provide flood insurance, and expanded upon throughout the years to mandate anyone with a federally backed mortgage to buy into it — was bankrupt by Hurricane Katrina, when payments for the massive flooding of New Orleans and the Gulf Coast landed it $16 billion in the hole. It moved further into the red after Hurricane Sandy, to a deficit of $28 billion, with taxpayers footing the bill for the debt. Even though the program was never meant to make money — and has otherwise historically remained solvent — lawmakers eager to slash federal spending saw it as a target.
Verchick points out that the misstep of Biggert-Waters’ attempt to reform insurance policy was that it was framed as a way to save money, instead of working toward long-term risk-reduction with more sensible incentives. He conceptualizes efforts to make cities more resilient in three categories: retreat, resistance and accommodation. The first, of course, is Biggert-Waters’ approach, and one that Verchick says the federal government focuses on too often — instead of, for instance, allocating resources to help people raise their homes above flood levels, an example of retrofitting that would fall into his “accommodation” category.
Michael Hecht, CEO of Greater New Orleans, Inc., a regional economic development agency, agrees that an emphasis on accommodation makes far more sense for New Orleans than sheer retreat. The United States has a strategic interest in maintaining cities, like New Orleans, near the coasts, even if that means devising strategies to protect them. Hecht points out that roughly 88 percent of the country’s offshore oil rigs are off the coast of Louisiana, the Port of New Orleans transports one of largest volumes of goods in the nation, and 40 percent of all domestic commercial seafood is caught off Louisiana’s coast. This is not to mention New Orleans’ cultural status as a national treasure, a large reason more than nine million tourists visited the city last year.
Hecht points to projects like the nascent Urban Water Plan (in which GNO, Inc. is a key stakeholder) as examples of how New Orleans can “accommodate” disaster, rather than run away from it. Such projects not only largely avoid forcing people from their homes, they can also benefit the economy, Hecht said. Hecht’s colleague Robin Barnes, GNO, Inc.’s executive vice president, said a major reason their organization is embroiled in issues related to resilience is what they see as major business opportunities in a niche field they call emerging environmental. The field, as they see it, encompasses water management, coastal restoration, disaster recovery, oil and gas remediation and management, and other similar pursuits related to preventing and offsetting the effects of disasters — areas in which Louisiana-based companies have advanced experience. Businesses here have already secured a number of contacts related to Sandy rebuilding, and in January a coalition of New Orleans organizations hosted the national Hurricane Sandy Rebuilding Task Force, which visited New Orleans to tap the city’s particular knowledge.
But for now, lawmakers must deal with the effects of Biggert-Waters. Congress included a stop-gap measure in the recently passed federal budget that delays premium increases for nine months, which buys advocates such as Hecht and Louisiana Senator Mary Landrieu time. But even though there may be enough votes in the Senate to block the rate hikes, House Speaker John Boehner announced last week that the House would not take up any bill that proposes to delay them for four years, and only more moderate fixes would be considered. In the meantime, Hecht also pointed out, many of Biggert-Waters’ negative consequences could have been avoided if the NFIP had waited for FEMA to update its floodplain maps before the rate increases went into effect — the current maps do not, for instance, take into account locally built levees, and although the law mandates FEMA update its maps, the agency has yet to do so. Verchick said the updated maps that will result from Biggert-Waters are one of the law’s only bright spots. Under the law, a board of experts will be created to oversee the drawing of new maps using the best science available, and they will take climate change effects into account for the first time. This development, although small, is a welcome indication that the federal government is, bit by bit, reorganizing parts of itself to more realistically confront the massive challenges the nation — and its cities — will face as the world heats up.
Nathan C. Martin is a writer and editor in New Orleans. He is the author of the Wallpaper* City Guide to New Orleans and his writing has appeared in McSweeney’s, Oxford American, The Believer, VICE, and other places. He is the founder and editor of Room 220: New Orleans Book and Literary News as well as its related literary event series. From 2008 – 2010 he was associate publisher and web editor of Stop Smiling. He is currently at work on a book about Wyoming, his home state.