Review: The Geography of Risk

I bought this 2019 book (subtitle: Epic Storms, Rising Seas, and the Cost of America’s Coasts) by Gilbert M. Gaul on the recommendation of Chris Daly, a Jive Talk guest.

The book, in short, explains how land developers on the East Coast of the US have — with government support — built more and more housing in places that are less and less safe from storm surges, “rain bombs” and river flooding. Rising risk, in other words, is getting worse not just with the increasing impacts of climate change but also the increasing share of housing built in unsafe locations.

Here are some excerpts (italics) and my notes:

  1. The mayors and politicians like to call hurricanes ‘natural’ disasters,” he said. “But in my opinion, there’s nothing natural about them. They are man-made. Barrier islands are always moving. Beaches are always eroding. It’s only a problem when you put a house there.
  2. Those houses are… backed by an array of federal and state programs that provide inexpensive financing and tax breaks; offer heavily subsidized flood insurance; underwrite roads, bridges, and utilities; and distribute billions more in disaster aid to help beach towns rebuild after hurricanes and floods—setting the stage for a seemingly endless loop of government payouts. It isn’t an exaggeration to say that without the federal government, the coast as we know it simply wouldn’t exist.
  3. In the 1950s, the federal government covered just 5 percent of the cost of rebuilding after hurricanes. Today, it pays for 70 percent. And in some cases, it pays for 100 percent. It is no accident that the federalization of disasters coincided with the explosive development at the coasts.
  4. The “reclamation” oxymoron (why “re-” when the land was always under water?): In the 1940s and 1950s, there were no environmental rules, let alone building codes or master plans to guide development. If a developer had a few dollars (it literally required only dollars), he could buy the rights to the land beneath the marsh, fill it with mud and dirt, and erect a house on top.
  5. The [New Jersey shore] mayors liked the idea of widening their beaches, especially if the state was going to pay. But they hated Hughes’s proposed ban on new development and giving large swaths of their beaches back to the public. There was too much money at stake, and restricting development threatened their tax bases. The debate shifted away from retreating out of harm’s way to getting the federal government to pay as much as possible toward the recovery.
  6. The Ash Wednesday Storm [of 1962] powerfully recast the politics of coastal disasters, sharply expanding federal aid and leading to the creation of new programs, including government-backed flood insurance several years later, not to mention helping to instill a growing expectation among Americans that the federal government would always be there to rescue them after hurricanes, floods, and other disasters, including aid for beach resorts and second homes. In this sense, the Ash Wednesday Storm represents a pivot point in the evolution of the nation’s coasts, shifting some of the risk of rebuilding from private homeowners to the public, and encouraging a dangerous and costly pattern of building, damage, and rebuilding in harm’s way.
  7. The story of New Jersey’s failures to manage building at the beach and along its coastal waterways mirrors the larger story of the nation’s coasts. Time and again, private interests and money have trumped sound environmental policies and public interests, whether it is restricting access to the beach or limiting risky development.
  8. Kahrl blames “coastal capitalism,” along with the powerful forces of segregation, for driving away African American families and transforming the coasts into “whites-only summer destinations — and dead communities in the off season.
  9. Instead of focusing on climate change, policymakers should address “the ever-growing concentration of population and wealth in vulnerable coastal regions.” The researchers then pivoted to the question of risk. “Rapidly escalating hurricane damage in recent decades owes much to government policies that serve to subsidize risk,” not to mention “political pressures that hold down [flood insurance] premiums in risky coastal areas.”
  10. While disaster aid provides humanitarian benefits, they wrote, it also serves “to promote risky behavior in the long run… A smarter approach would be to build smaller, cheaper houses, he suggested. “That’s what they do in the Philippines and Taiwan, which are battered every year by bigger typhoons. You see a handful of fortresses built for a Category 5 [typhoon]. Everything else is a shanty, plywood shacks so poor people can go out there, nothing of value. Every few years, they blow away, and so what? It’s a pretty smart adaptation, actually… As the population and wealth of the United States has increased in coastal locations, it has invariably led to growth in exposure and vulnerability of coastal property along the U.S. Gulf and East coasts.” 
  11. In the last two decades [2000-2020], hurricanes and coastal storms have caused over three-quarters of a trillion dollars in damage at the coast—far more than earthquakes, tornadoes, and wildfires combined. That represents a nearly sixfold increase from the prior two decades (1980–1990 2000).
  12. The report that White delivered to the Johnson administration in 1966 was ambitious yet cautionary. Yes, a government-backed flood insurance program was feasible, but only under a number of strict conditions. First, insurance had to be closely linked to rigorous land-use policies limiting future development in floodplains. Second, the government had to price its premiums at levels reflecting the actual risk of flooding; anything less would be fiscally reckless. Third, the government shouldn’t offer subsidies to policyholders, because they would distort the market and incite even more risky development. And fourth, the government should test its program in one or two markets to see whether it worked before offering flood insurance nationwide. These conditions were ignored.
  13. Floods are an act of God; flood damages result from the acts of man,” White wrote in the task force report. “Those who occupy the floodplain should be responsible for the results of their actions…
  14. Over its troubled fifty-year history, the National Flood Insurance Program has lost $40 billion, including claims from Harvey, Irma, and Maria in 2017. No investor-owned insurance company would be in business with such poor risk management.
  15. Krimm speculated that private insurance agents may have sold flood insurance to owners of beach houses [second homes] without the government’s knowledge to boost the overall number of flood policies… Curiously, FEMA officials told me they don’t know how many second homes they insure. In 2015, a spokeswoman informed me that they don’t track the data that way and that it would be expensive to run a computer search to identify the beach houses.
  16. Craig Fugate suggested to me that it may be time for the federal government to get out of the flood business… “You know who our biggest opponent was who got this killed? It was the National Association of Realtors. What the hell? Are you that wedded to selling property in the flood zone? They said it would be detrimental to home sales. Property values would plummet.” Just another case of privatize the profits, socialize the losses. Indeed, this recent article says “Accounting for flood risk would lower American house prices by $187bn.”
  17. The Army Corps of Engineers didn’t set out to be in the beach-building business. For years, the engineers fought efforts to add beach repairs to their mission statement. But eventually, coastal interests won the engineers over, thanks in part to the efforts of an engaging and persistent lobbyist from New Jersey who convinced them that beach erosion wasn’t only a local issue; it was a national threat.. that have cost the taxpayers $32 million for each mile of NJ beach in front of millionaires’ mansions. The Corps has no problem with this, as they like building things.
  18. By building in harm’s way, humans had created a “self-inflicted problem,” an internal Corps history notes. The nation’s shorelines were now viewed “as a recreational resource and a producer of profit. Increasingly, the ocean generally, and the waves in particular, became depicted as ‘enemies’—threats, which had to be controlled to the greatest extent possible.” According to the Corps history, Smith and the ASBPA were maneuvering to get the engineers involved in beach repairs. “Rather than seeing coastal erosion as a natural phenomenon and taking full cognizance of this fact when developing shore sites, some other explanation was sought … to account for this force which was now destroying valuable property.” Colonel Earl Ivan Brown complained that private interests were looking to the federal government as a “source of easy money … to force the federal government to assume the burden of shore protection.
  19. There is a beach economy. But it is different from the one depicted in the studies. Most of the money is associated with real estate and construction [not “community”]. The tourism jobs touted in the studies—retail clerks, cooks, dishwashers, lifeguards, waiters—are seasonal and low-wage. Meanwhile, many beach towns are losing year-round jobs as populations tumble and barrier-island resorts transition from places where people live and work to seasonal communities of second homes and investment properties. 
  20. Tampa is the proverbial disaster waiting to happen…Hurricane Ian (2022) was a powerful Category 5 Atlantic hurricane which was the third-costliest weather disaster on record, and the deadliest hurricane to strike the state of Florida since the 1935 Labor Day hurricane.
  21. The entire coastline of the Netherlands is smaller than Florida’s. At least half the nation was at or below sea level. The Dutch couldn’t retreat to higher ground because, well, there was no higher ground. Rising water and powerful storms posed an existential threat. So they planned accordingly, spending billions each year keeping water out of their cities. There was even a national tax to pay for water defenses, though no government flood insurance. If a community decided to build in a floodplain, it had to pay for its own defense, unlike Americans, who richly subsidize risky development and then lurch from disaster to disaster. Dutch engineers also continually reassess their approach. Lately, they have begun to shift away from building barriers, levees, and surge protectors in favor of using green spaces, parks, and other public land to harbor floodwater until it recedes.
  22. This is fine: In the last three years alone, Houston had twice thrice experienced five-hundred-year rainfalls.
  23. This being Texas, there was no such thing as zoning and, for decades, very few rules governing building. Crucially, there were also no federal flood maps until the 1980s, by which point developers had already filled many of the wetlands, prairies, and rice fields with town houses, condominiums, and suburban housing tracts… Harvey underscored how the risks at the coast are not limited to waves, storm surge, and wind. Torrential rainstorms fueled by rising temperatures and the oversaturated atmosphere are becoming increasingly common, and not only in Houston. Even if the engineers armor the nation’s coasts, that won’t save Houston, Charleston, Miami, or New York City when the next rain bomb stalls out there, unleashing the next epochal deluge.
  24. North Carolina had enjoyed a reputation as a national leader in coastal management, even embracing rules limiting oceanfront development. But after conservative Republicans took control of the state capitol, the politics turned ugly, and they began rolling back rules. In 2012, they criticized the committee’s findings on sea-level rise as unfriendly to business and rejected the science as unproven estimates—even though the report closely mirrored the estimates of esteemed national panels. What next? A ban on gravity?!
  25. How did you defend so much shoreline and so many houses? You could begin by restoring the lost marsh and wetlands, as they were doing in Louisiana and Mississippi. You could elevate the houses and roads. Or you could try to prevent the water from getting into the bays by constructing huge steel gates and seawalls, as was currently being planned in Galveston and New York City. But the cost was enormous. A single gate in front of a small inlet could easily run $100 million, while the tab for a far larger wall, such as the proposed Ike Dike, could cost upward of $31 billion. The engineers could spin out their solutions. But someone was going to have to pay.
  26. What is the best way to fix thousands of miles of broken, vulnerable shorelines? One of the attendees, a Corps engineer no less, had scribbled across the top of his questionnaire “Stop spending money and leave.”

I strongly recommend this book to anyone living on the coast, or a river, or where rain falls (so, yeah, everyone). US taxpayers need to know their taxes subsidize vacation properties. US homeowners need to know risks are not “priced in.” US citizens need to know government policy is not protecting them. “Do your own research” (read this book) because US politicians are screwing over most citizens. FIVE STARS.

Addendum (Aug): For the California equivalent of this story (subsidies to leave near fires, rather than floods),  The Case for Letting Malibu Burn (originally from 1995).

Here are all my reviews.

Author: David Zetland

I'm a political-economist from California who now lives in Amsterdam.

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