Why rebuild homes in hurricane zones?


If you build a nice vacation home on the beach, and something happens — say, a hurricane flattens it, should taxpayers rebuild that house, through the heavily subsidized National Flood Insurance Program?

Once maybe. But how about twice? Three times? How about every single time you’re shocked to learn that beaches are susceptible to hurricanes?

Congress has rolled back some sensible reforms made in 2012 to the flood insurance program, and if the Senate follows suit, taxpayers will once again be footing the bill for beachfront property, time and time again.

“Under the House bill, called the Homeowner Flood Insurance Affordability Act, premiums under the National Flood Insurance Program (NFIP) could increase no more than 18 percent per property annually,” USA Today reports. “The legislation was crafted by Republican Rep. Michael Grimm of New York in response to premiums that in some cases had increased tenfold.”

But why were those rates increasing? Because Congress had finally decided it makes no sense for the taxpayers to continue to rebuild beachfront homes — time and time again — in hurricane zones.

“Compared to, say, the nation’s $17 trillion debt or government’s hijacking of the health care system, the vast majority of us don’t care all that much about politicians fighting over flood insurance,” the Heritage Foundation remarked last week. “But the dispute is actually one of principle: Is there any entitlement demand that we will refuse in favor of individual responsibility? Here’s the deal: Taxpayers have been subsidizing homes and businesses in flood-prone areas for decades under the National Flood Insurance Program. All too predictably, the government insurance scheme is financially unsustainable and woefully mismanaged by the Federal Emergency Management Agency. The program’s debt to the U.S. Treasury now tops $24 billion and counting.”

Claims of premium increases are overblown, Heritage notes.

“In fact, only five percent of the 5.5 million policies — primarily for second homes, businesses and properties that have experienced severe repetitive losses — actually face an imminent increase (but not more than 25 percent of their current rate in any given year),” the Foundation reported.

John Stossel, whose column appears in these pages, even thanked taxpayers for his nice beach-front home(s).

“I once built a beach house on the edge of the ocean — a very risky place to build — but I did so because federal flood insurance guaranteed my investment,” Stossel recently wrote. “Eventually, a storm swept away my house, but I didn’t lose a penny. Government ‘insurance’ covered my loss. Thanks, taxpayers! Now that I’m wiser — and more libertarian — I’m ashamed that I took your money and understand that the whole program is a mistake.”

If only Congress could see that wisdom.

“It’s hard to fathom that Congress is actually debating subsidies for beachfront villas,” Heritage adds. “To cave now on such an obvious call would mean that the entitlement crowd is held in higher regard by Congress than the fundamental principles upon which America was founded.”

The National Flood Insurance Program should be revamped, and beachfront property owners should shoulder their own risk.


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