Addressing affordability and long-term resiliency through the national flood insurance program

In the context of flood insurance in the United States of America, the authors propose that property owners should agree in advance not to rebuild following floods that cause substantial damage and, instead, to accept a government buyout of their property and relocate. In exchange, they would receive a discount on their federal flood insurance coverage, a guarantee that their property would be purchased at its pre-disaster market value, and a faster buyout process.

The advantages of offering rate discounts are the following (p. 8-):

• If viewed as a mitigation measure, FEMA could lower a property owner’s insurance premium in exchange for an agreement to accept a buyout and vacate after the next flood.
• Local governments may benefit by knowing exactly which properties will be bought out well in advance of the next flood.
• The increasing public cost of post-disaster recovery could be curtailed if flood victims were better incentivized to relocate rather than to rebuild.
• The owner would receive a discounted insurance rate plus a guarantee of being bought out should he or she incur substantial damage in the next flood.
• By steering development toward safer locations, all future flood hazard and damage may be permanently avoided.
• Another critical advantage provided by a buyout program is the opportunity to create a natural buffer on the acquired land, such as a restored wetland or park space.

Environmental Law Reporter, 2015.