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FEMA Leaves Homeowners Up In The Air


He’s not doing this to get better satellite reception.  (Photo credit: Christina Johnson, the Patch)


In case you missed it, there’s an interesting story in the Patch about the ungainly appearance of and difficulty of living in some of these houses that FEMA has forced people to raise.  Be sure to look at all the pictures.

This couldn’t be right.  How could it be that it was perfectly reasonable to build this house ten or twenty years ago but now it’s perfectly reasonable to tear it off the ground and jack it ten feet up into the air?

It’s because politics has replaced economic reality and actual business logic in the housing market and politics can be fickle.

This family came to live in this house under the assumption of the availability of affordable flood insurance, provided by the National Flood Insurance Program and administered and subsidized by FEMA.  And at the time the National Flood Insurance Program was created, it was good politics.  New free or subsidized stuff is always good politics.  Later, when the cost starts being borne, and as always, turn out to be much higher than predicted the politics can change.  Now that the National Flood Insurance Program is under political pressure to reduce it’s liabilities we are seeing homeowners forced to go through the trouble and expense of raising up their houses and having to climb up and down from them several times a day for as long as they live there.  On top of that, there is now political pushback from people who don’t want to raise their houses and FEMA might have to back off on some of their new rules.  This family may learn that they didn’t have to raise their house after all.  What a disaster!

Even the New York Times acknowledges that this can’t go on.  Personally, I think the program needs to be phased out but gradually enough that families who made perfectly logical decisions based on the situation as it existed don’t have the rug suddenly pulled out from underneath them.  One idea would be to reduce the maximum payouts by 5% a year for twenty years.  Over time the market will adjust and will eventually be based on economic reality and not politics.

The house pictured above would be much more stable sitting on the ground without those props holding it up.  And the shore’s housing market would be much more stable grounded in reality without the federal government’s props holding it up.  We need to slowly start easing the distortions caused by National Flood Insurance and get back to earth.  Let the private market sort out the risks and costs.

**BTW, I don’t have flood insurance so I’m looking at this as a disinterested observer.


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