Wednesday, January 6, 2010

Living in Risky Places...

One of the most interesting conversations that I had in 2009 with one of my classes involved whether the federal government should use taxpayer funds to enable individuals to live in areas subject to regular natural disasters.  Places like hills prone to disastrous mudslides, areas that often face huge fires, and coasts that are regularly hit by hurricanes (you can also add areas where earthquakes and flooding are typical).

The gist of the conversation was not whether people should be allowed to live there.  On that issue, almost everyone was in agreement:  if you own the land, you should be able to live there regardless of the risk/danger.

Instead, the debate centered on whether the federal or state governments should underwrite such behavior through policies like government insurance.  On that issue, many of the opinions flipped to the other side.  Something like "Yes, they should be allowed to live there but they should bear the risk for their decision to do so."

Much of that thinking seemed to result from the fact that most people in the U.S. don't live in a flood or earthquake or forest fire prone area.  Instead, they live in areas where natural disasters don't have a history of regularly striking and causing major damage.

This story from the LA Times reminded me of that conversation:

The federal government has informed property owners in more than 150 cities and unincorporated areas in Los Angeles, Orange, Ventura, Riverside and San Bernardino counties about the new requirement. Most live near rivers and creeks, below dams or in low- lying areas that are at greater risk of flooding than previously believed, according to maps developed by the Federal Emergency Management Agency.

Premiums range from $500 to more than $1,700 a year. Insurance is mandatory for anyone with a federally backed mortgage, and lenders will typically buy policies, sometimes at a higher cost, for property owners who fail to do so on their own. Fannie Mae and Freddie Mac own or guarantee more than half of all U.S. mortgages.

Angry homeowners in several parts of Southern California dispute the new maps and have formed groups to challenge them.

In some cases, local governments are paying for studies to challenge FEMA's maps, and in a few cases, the agency has backed down.

The new maps are part of a nationwide effort that FEMA began in 2003 to better identify properties that could flood in a so-called 100-year storm -- the type of deluge that FEMA calculates has a 1% likelihood of occurring in any given year. In much of the country, the redrawn maps greatly increase the number of homes included in flood zones.

Here's the rub: through the federal flood insurance (and other disaster insurance) program, the government is essentially socializing the risk for a limited group of individuals to live in disaster prone areas.  Why is that something the government should be involved in?

Again, people should be able to live wherever they own land.  But, what is the worthwhile policy of promoting (through federal insurance backing) risky decision-making like building a structure near a earthquake fault line or in a low-lying flood prone area.

One could even extend the argument to why should the federal government continue to try and beat back Mother Nature with expensive dams and levy systems.  Even the greatest human engineering faces a losing battle over the long-term against the power of nature.

As many descend on New Orleans for the AALS meeting this week, it might be worthwhile to consider that, well before the US Army Corps of Engineers tried to defeat the mighty Mississippi River, people resided in New Orleans.

They did so, though, on the limited amount of high ground that was not prone to catastrophic flooding.

--Chad Emerson, Faulkner U.

http://lawprofessors.typepad.com/land_use/2010/01/living-in-risky-places.html

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