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Troubled Waters: The National Flood Insurance Program in Historical Perspective

  • Scott Gabriel Knowles (a1) and Howard C. Kunreuther (a2)
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Abstract

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References

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NOTES

1. The National Flood Insurance Program was created through the National Flood Insurance Act of 1968, Public Law 90-448, 90th Cong., 2nd sess., 1968.

2. Manes, Alfred, Insurance: Facts and Problems; Selected Lectures on Business Administration and Economics (New York, 1938).

3. Dacy, Douglas C. and Kunreuther, Howard, The Economics of Natural Disasters: Implications for Federal Policy (New York, 1969), 3747.

4. Frank Hobbs and Nicole Stoops, U.S. Census Bureau, Census 2000 Special Reports, Series CENSR-4, Demographic Trends in the 20th Century (Washington, D.C., 2002), 24, 27–28, A–1; “Mapping the 2010 U.S. Census,” New York Times, http://projects.nytimes.com/census/2010/map (accessed 18 September 2013).

5. National Oceanic and Atmospheric Administration, “National Coastal Population Report: Population Trends from 1970 to 2020,” March 2013, 5.

6. Eric S. Blake, Christopher W. Landsea, and Ethan J. Gibney, “The Deadliest, Costliest, and Most Intense United States Tropical Cyclones from 1851–2010 (and Other Frequently Requested Hurricane Facts),” NOAA Technical Memorandum NWS NHC-6, August 2011, 27. This does not include flash flood or river flooding; National Weather Service, Hydrologic Information Center, Flood Loss data: http://www.nws.noaa.gov/hic/; National Oceanic and Atmospheric Administration, NOAA’s State of the Coast, U.S. Hurricane Top Ten Lists: http://stateofthecoast.noaa.gov/insurance/hurricanetopten.html.

7. Munich Re, “2012 Natural Catastrophe Year in Review,” 3 January 2013, 5.

8. NOAA, “National Coastal Population Report.”

9. AECOM, “The Impact of Climate Change and Population Growth on the National Flood Insurance Program through 2100,” June 2013, 6–2.

10. Michel-Kerjan, Erwann O., “Catastrophe Economics: The National Flood Insurance Program,” Journal of Economic Perspectives 24, no. 4 (2010): 165–86; Rawle King, “The National Flood Insurance Program: Status and Remaining Issus for Congress,” Congressional Research Service, 7-5700, RF42850, 2013, p. 6, http://www.fas.org/sgp/crs/misc/R42850.pdf.

11. Biggert-Waters Flood Insurance Reform Act of 2012, Public Law 112-141, 112th Cong., 2nd sess., 2012.

12. Ibid.

13. See Dauber, Michele Landis, The Sympathetic State: Disaster Relief and the Origins of the American Welfare State (Chicago, 2013).

14. Knowles, Scott Gabriel, “Defending Philadelphia: A Historical Case Study of Civil Defense in the Early Cold War,” Public Works Management Policy 11, no. 3 (2007): 217–32; Knowles, The Disaster Experts: Mastering Risk in Modern America (Philadelphia, 2011). On civil defense, see also Garrison, Dee, Bracing for Armageddon: Why Civil Defense Never Worked (Oxford, 2006); Kerr, Thomas J., Civil Defense in the U.S.: Bandaid for a Holocaust? (Boulder, 1983); Keyes, Langley and Leaning, Jennifer, eds., The Counterfeit Ark: Crisis Relocation for Nuclear War (Cambridge, Mass., 1984); and Eden, Lynn, Whole World on Fire: Organizations, Knowledge, and Nuclear Weapons Devastation (Ithaca, 2004).

15. Knowles, The Disaster Experts, 231–37.

16. Ibid., 257; Gilbert F. White, “Human adjustment to floods.” University of Chicago, Department of Geography Research Paper No. 29l, 1945; G. F. White, W. C. Calef, J. W. Hudson, H. M. Mayer, J. R. Shaeffer, and D. J. Volk, “Changes in Urban Occupance of Flood Plains in the United States,” University of Chicago, Department of Geography Research Paper No. 57, 1958; Robert E. Hinshaw, Living with Nature’s Extremes: The Life of Gilbert Fowler White (Boulder, 2006).

17. Dynes, Russell R., Organized Behavior in Disaster (Lexington, Mass., 1970); Quarantelli, E. L., “Disaster Studies: An Analysis of the Social Historical Factors Affecting the Development of Research in the Area,” International Journal of Mass Emergencies and Disasters 5, no. 3 (1987): 285310.

18. Dacy and Kunreuther, The Economics of Natural Disasters.

19. For a good, brief overview of the history of the National Flood Insurance Program, see Platt, Rutherford H., Disasters and Democracy: The Politics of Extreme Natural Events (Washington, D.C., 1999); see also Michel-Kerjan, “Catastrophe Economics”; Abbott, Ernest B., “Floods, Flood Insurance, Litigation, Politics—and Catastrophe: The National Flood Insurance Program,” Sea Grant Law and Policy Journal 1, no. 1 (June 2008): 129–55; American Academy of Actuaries, Flood Insurance Subcommittee, “The National Flood Insurance Program: Past, Present . . . and Future?” July 2011; James M. Wright, “The Nation’s Responses to Flood Disasters: A Historical Account, A Report by the Association of State Floodplain Managers,” April 2010.

20. FEMA, “A Chronology of Major Events Affecting the National Flood Insurance Program,” October 2002, 3–4.

21. Ibid., 6.

22. “Statement by the President on Signing the Southeast Hurricane Disaster Relief Act of 1965,” 8 November 1965; http://www.presidency.ucsb.edu/ws/?pid=27358.

23. A Unified National Program for Managing Flood Losses, A Report by the Task Force on Federal Flood Control Policy,” House Document Number 465, 89th Cong., 2nd sess. (Washington, D.C., 1966), 1–2.

24. Ibid., 21–26.

25. Ibid., 17.

26. Hinshaw, Living with Nature’s Extremes, 153.

27. Ibid., 154–55.

28. Lyndon B. Johnson: “Executive Order 11296—Evaluation of Flood Hazard in Locating Federally Owned or Financed Buildings, Roads, and Other Facilities, and in Disposing of Federal Lands and Properties,” 10 August 1966. Online by Gerhard Peters and John T. Woolley, The American Presidency Project. http://www.presidency.ucsb.edu/ws/?pid=60542.

29. FEMA, “A Chronology of Major Events Affecting the National Flood Insurance Program,” 10–11; Wright, “The Nation’s Responses to Flood Disasters,” 25.

30. “Package Flood Insurance for Private Dwelling Buildings,” Proceedings of the National Association of Insurance Commissioners, vol. 2 (December 1965): 387–449, 11, quoted in Anderson, Dan R., “The National Flood Insurance Program: Problems and Potential,” Journal of Risk and Insurance 41, no. 4 (December 1974): 579–99, 581; for a discussion of different types of insurance options considered at the time, see Kunreuther, Howard, “The Case for Comprehensive Disaster Insurance,” Journal of Law and Economics 11, no. 1 (April 1968): 133–63.

31. Dacy and Kunreuther, The Economics of Natural Disasters, 25–27.

32. See Rachel Carson, Silent Spring (Boston, 1962).

33. Wright, “The Nation’s Responses to Flood Disasters,” 33–34.

34. Robert S. Felton, William K. Ghee, and John E. Stinton, “A Mid-1970 Report on the National Flood Insurance Program, Journal of Risk and Insurance 38, no. 1 (March 1971): 1–14, 3.

35. Anderson, “The National Flood Insurance Program,” 582.

36. Wright, “The Nation’s Responses to Flood Disasters,” 35.

37. Anderson, “The National Flood Insurance Program,” 582–84.

38. “Chronology,” 15.

39. Anderson, “The National Flood Insurance Program,” 585–86.

40. FEMA, “A Chronology of Major Events Affecting the National Flood Insurance Program,” 20.

41. Kunreuther, Howard, Ginsberg, R., Miller, L., Sagi, P., Slovic, P., Borkan, B., and Katz, N., Disaster Insurance Protection: Public Policy Lessons (New York, 1978).

42. Comptroller General of the United States, “Formidable Administrative Problems Challenge Achieving National Flood Insurance Program Objectives,” April 1976, ii.

43. Ibid., iii.

44. Ibid., 51.

45. FEMA, “A Chronology of Major Events Affecting the National Flood Insurance Program,” 27.

46. Wright, “The Nation’s Responses to Flood Disasters,” 38.

47. See Clarke, Lee, Mission Improbable: Using Fantasy Documents to Tame Disaster (Chicago, 1999).

48. Michel-Kerjan, “Catastrophe Economics,” 168.

49. For the comprehensive history of FEMA, see Roberts, Patrick S., Disasters and the American State: How Politicians, Bureaucrats, and the Public Prepare for the Unexpected (Cambridge, 2013). See also Birkland, Thomas A., After Disaster: Agenda Setting, Public Policy, and Focusing Events (Washington, D.C., 1997); and Birkland, Lessons of Disaster: Policy Change After Catastrophic Events (Washington, D.C., 2006); Perrow, Charles, The Next Catastrophe: Reducing Our Vulnerabilities to Natural, Industrial, and Terrorist Disasters (Princeton, 2007); Platt, Disasters and Democracy; and Andrew Morris, “The Origins of the FEMA Trailer: Emergency Housing and Federal Disaster Relief,” Policy History Conference, Richmond, Virginia, 2012.

50. Rome, Adam, The Bulldozer in the Countryside: Suburban Sprawl and the Rise of American Environmentalism (Cambridge, 2001).

51. Moss, David A., When All Else Fails: Government as the Ultimate Risk Manager (Cambridge, Mass., 2002), 256–57.

52. Moss, David A., “Courting Disaster? The Transformation of Federal Disaster Policy Since 1803,” in The Financing of Catastrophe Risk, ed. Froot, Kenneth A. (Chicago, 1999), 307–55, 318.

53. Wright, “The Nation’s Responses to Flood Disasters,” 34;

54. Moss, “Courting Disaster?” 318.

55. New Jersey Governor Tom Kean famously attempted to restrict coastal land development in the 1980s and was unable to accomplish the goal; major lobbying effort by home builders carried the day. A New Jersey state law passed in 1994 established that washed-out properties could be rebuilt in the same location. Chris Kirkham and John Rudolf, “Jersey Shore Development Failures Exposed by Hurricane Sandy,” Huffington Post, 12 December 2012: http://www.huffingtonpost.com/2012/12/11/jersey-shore-development_n_2267557.html.

56. Gilbert F. White, “Looking Toward the Horizon: Prospects for Floodplain Managers,” Association of State Floodplain Managers Annual Conference, Little Rock, Ark., 1997, quoted in Wright, “The Nation’s Responses to Flood Disasters,” 41.

57. Carolyn Kousky and Erwann O. Michel-Kerjan, “Informed Decisions on Catastrophe Risk: Hurricane Sandy’s Storm Surge and the NFIP,” Wharton Risk Management and Decision Processes Center, November 2012.

58. McClelland, G., Schulze, W., and Coursey, D., “Insurance for Low-Probability Hazards: A Bimodal Response to Unlikely Events,” Journal of Risk and Uncertainty 7 (1993): 95116.

59. Michel-Kerjan, Erwann, de Forges, S. Lemoyne, and Kunreuther, Howard, “Policy Tenure under the U.S. National Flood Insurance Program (NFIP),” Risk Analysis 32, no. 4 (2012): 644–58.

60. Kriesel, W. and Landry, C., “Participation in the NFIP: An Empirical Analysis for Coastal Properties,” Journal of Risk and Insurance 71 (2004): 405–20; Dixon, L., Clancy, N., Seabury, S. A., and Overton, A., The National Flood Insurance Program’s Market Penetration Rate: Estimates and Policy Implications (Santa Monica, Calif., 2006).

61. Wright, “The Nation’s Responses to Flood Disasters,” 36.

62. Knowles, Scott Gabriel, The Disaster Experts: Mastering Risk in Modern America (Philadelphia, 2011), chaps. 13.

63. Healy, Andrew and Malhotra, Neil, “Myopic Voters and Natural Disaster Policy,” American Political Science Review 101, no. 3 (August 2009): 387406.

64. “The National Flood Insurance Program: Past, Present, and Future?” American Academy of Actuaries, July 2011, 9.

65. Douglas Jordan, “U.S. Rep. Ron DeSantis on Defensive After Disaster Vote,” St. Augustine Record, 17 June 2013; http://jacksonville.com/news/politics/2013-06-17/story/us-rep-ron-desantis-defensive-after-disaster-vote#ixzz2ZKlH2fM3.

66. This subsection draws heavily on Kunreuther, Howard, Michel-Kerjan, Erwann, and Pauly, Mark, “Making America More Resilient Toward Natural Disasters: A Call for ActionEnvironment: Science and Policy for Sustainable Development 55, no. 4 (July–August 2013): 1523.

67. The Biggert-Waters Flood Insurance Reform Act of 2012 is Title II of the Surface Transportation Extension Act of 2012 (H.R. 4348). The roll-call vote in the House of Representatives was 373–52 and 74–19 in the Senate. The bill was signed into law by President Obama on 6 July 2012.

68. More details on FEMA’s Advisory Base Flood Elevations (ABFE) program can be found at http://www.region2coastal.com/faqs/advisory-bfe-faq.

69. For more details on the proposed program and its financial implications to the homeowner and the federal government, see Kousky, Carolyn and Kunreuther, Howard, “Addressing Affordability in the National Flood Insurance ProgramJournal of Extreme Events, Vol. 1, No. 1 (2014) 1450001 (28 pages), DOI: 10.1142/S2345737614500012; Kousky and Kunreuther, “Addressing Affordability in the National Flood Insurance Program,” Resources for the Future/Wharton Risk Center, RFF-13-12, August 2013.

70. Senator Mary Landrieu, Press Release, “Landrieu: We Need to Repeal, Amend, or Delay Biggert-Waters to Make Flood Insurance Affordable,” 13 September 2013: http://www.landrieu.senate.gov/?p=press_release&id=3970.

71. U.S. Senate Committee on Banking, Housing, and Urban Affairs, “Hearings: Implementation of the Biggert-Waters Flood Insurance Act of 2012: One Year After Enactment,” 18 September 2013.

72. U.S. Government Accountability Office, Flood Insurance: More Information Needed on Subsidized Properties, GAO-607, 3 July 2013.

73. See Scott Gabriel Knowles, “Flood Zone Foolishness: Politicians from Disaster-Prone States Lead the Fight Against Real Disaster Reforms,” Slate, 23 March 2014: http://www.slate.com/articles/health_and_science/science/2014/03/biggert_waters_and_nfip_flood_insurance_should_be_strengthened.html.

74. See Howard Kunreuther and Erwann Michel-Kerjan, “Maintain the Best Features of Biggert-Waters” The Hill, 6 March 2014, for a critique of MG14 and the need to preserve the best features of BW12.

75. Repetto, Robert and Easton, Robert, “Climate Change and Damage from Extreme Weather Events,” Environment 52 (2012): 2, 2233.

76. Kunreuther, Howard, Michel-Kerjan, Erwann, and Ranger, Nicola, “Insuring Against Future Climate Catastrophes,” Climatic Change 18 (2013): 2, 339–54.

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