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Building Houses on Sand

Is the Federal Emergency Management Agency doing more harm than good? David Helvarg, author of Blue Frontier: Saving America's Living Seas believes so.

Today 17 of the 20 fastest-growing counties in America are coastal, thanks in large measure to federal flood insurance. Until this government program became available in 1968, banks refused to grant mortgages for beachfront home construction. It was only after the feds assumed the risk that private insurers were unwilling to take that the coastal real-estate market boomed.

According to Helvarg up to 40% of all FEMA disaster claims go to previous aid recipients: people who have recieved FEMA aid, rebuilt in the same place and filed for aid again.

This kind of wastefulness really hits home in light of this summer's tornado tragedy and the FEMA response. FEMA does serve an ostensibly good purpose in helping people recover from disasters and only began losing money with the increased hurricane activity of the late 80's and 90's, beginning with hurricanes Andrew, Hugo, et al. With some modest reform, FEMA could get back on track. Don't expect reform anytime soon, though, at least not as long as people can get away with building in coastal and flood plain areas at the taxpayer's expense.