One House, 22 Floods: Repeated Claims Drain Federal Insurance Program
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The six-bedroom house, which has an indoor swimming pool, sits along the San Jacinto River. It has flooded 22 times since 1979, making it one of the most flood-damaged properties in the country. Between 1979 and 2015, government records show the federal flood insurance program paid out more than $1.8 million to rebuild the house—a property that Mr. Harmon figured was worth $600,000 to $800,000 before Harvey hit late last month.
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As they tally up the losses from Hurricanes Harvey and Irma, government officials are looking for ways to step up purchases of frequently-flooded houses, which have become a huge drain on the financially troubled federal flood insurance program.
Homes and other properties with repetitive flood losses account for just 2% of the roughly 1.5 million properties that currently have flood insurance, according to government estimates. But such properties have accounted for about 30% of flood claims paid over the program’s history.
“We are seeing a very acute need to move far faster” on property buyouts, said Roy Wright, who directs the National Flood Insurance Program. “It’s a clear priority to address these multiple-loss properties.” In a buyout program, homes are typically razed and the land left as open space.
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Nearly half of frequently flooded properties in the U.S. have received more in total damage payments than the flood program’s estimate of what the homes are worth, according to the group’s calculations.
“Anyone looking at this would say there are perverse incentives for staying on the floodplain,” said Nicholas Pinter, a geology professor and associate director of the Center for Watershed Sciences at the University of California, Davis, who has analyzed repeatedly flooded properties.
Mr. Wright said he has “no authority to cancel policies, none at all” when homes suffer multiple losses. The agency can, however, put “folks who have multiple losses in a position where they have the opportunity to move on rather than simply re-establish them in harm’s way” by buying these homes with federal funds, he said, and is looking at ways to expedite the buyout process.
Purchasing such homes can be cheaper for the government in the long run than repairing and rebuilding, flood experts say. But government efforts have been hampered by limited funding, long delays and the reluctance of homeowners—and sometimes communities—to participate in buyout programs.
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In Florida alone, 808 properties were the subject of at least five flood insurance claims between 1978 and 2011, according to a paper published this summer by coastal researchers Juliano Calil of the Center for the Blue Economy and Sarah Newkirk of the Nature Conservancy. In the Houston area, the Harris County Flood Control Department last year identified 3,300 structures as candidates for its buyout program. Under federal requirements, property owners must volunteer for a buyout.
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Homeowners aren’t the only ones who can get cold feet. Some communities are reluctant to offer buyouts because funding is limited and the program removes properties from their tax base, said Delton Schwalls, an engineer in Orlando who works with Florida communities on flood mitigation.
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https://www.wsj.com/articles/one-house-22-floods-repeated-claims-drain-federal-insurance-program-1505467830
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Thus, we cut programs for the middle class and the poor, while one homeowner gets $1.8 million for repeating flood because he chooses to rebuild.
And, this is Houston. Even if houses are razed, you leave an open space and it won't take much for someone else to build a new house to continue with miking the federal government.
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