As noted in an earlier comment.

Reader comment on: Disaster Subsidy

Submitted by Lyle (United States), Nov 19, 2012 16:27

Because of the flood insurance law any houses damaged more than 50% will have to be rebuilt in NYC with the lowest member of the floor joists 2 foot above the 100 year flood level. Thus we have houses on stilts as on the gulf coast. This of course minimizes the damage from future floods. This also applies to new homes. So the new construction will be more flood resistant. Look up the rules for zone V of flood risk (areas with flooding and wave action as well). (NYC raised the elevation 1 foot in 2007). So it is the folks with 10-49% damage that get to take the risk, perhaps the limit ought to go down to 30 % of value, if you want continued flood insurance. Buyout money has been limited, but perhaps should be increased, but the land should be valued as if flood insurance is no longer around. Of course as the article implies the rebuilding is a subsidy for the 1% from the 99%.

Note that some villages in IL where moved after Mississippi river flooding. Consider the noise over opening the floodway in Mo last year, yet the land owners or their predecessors were paid for that right.

Now an alternative is to charge actuarially sound rates on rebuilt houses for flood insurance.

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