R Street: Gulf Storms Highlight Need to Reform Federal Flood Policy

WASHINGTON, Aug. 26 -- The R Street Institute issued the following news release:

As East Texas and Western Louisiana prepare for the impact of Hurricane Laura, this year's very active Atlantic storm season should be a wake-up call to Congress on the need to reform federal flood policy, according to R.J. Lehmann, director of finance, insurance and trade policy for the R Street Institute.

In particular, Congress needs to revive efforts to fix longstanding problems within the 50-year-old National Flood Insurance Program, which as of June 30 remained $20.5 billion in debt to taxpayers, Lehmann said. Concerns about the program's fiscal unsustainability, outdated maps, subsidized properties and repetitive-loss properties have been the subject of numerous congressional hearings in recent years.

Earlier this year, R Street published a policy study (https://www.rstreet.org/2020/02/20/do-no-harm-managing-retreat-by-ending-new-subsidies/) making the case for the NFIP to cease writing coverage for new construction in 100-year floodplains and that NFIP rates for any new construction should be adjusted to reflect future changes in assessments of flood risk.

"Climate change is forcing communities to deal with the growing threat of sea-level rise and more frequent and more extreme weather events, all of which raises the importance of investing in mitigation and, in some places, considering managed retreat," Lehmann said. "Nonetheless, over the 21st century, thanks in part to federal policy that encourages Americans to build in flood-prone and environmentally sensitive regions, the U.S. population has actually grown faster in 100-year floodplains than outside those flood zones."

R Street also has endorsed H.R. 5776, bipartisan legislation to curb the growth of repeat loss properties within the NFIP, as well as reforms that would require disclosure of a property's flood risk and flood history in real estate transactions. R Street also supports reestablishing the Federal Flood Risk Standard to ensure flood risk is considered when building taxpayer-financed infrastructure.

Unless extended by Congress, statutory authorization for the NFIP currently is scheduled to expire Sept. 30.