Moral Hazard- should tax dollars be used for flooded homes?

[Rob Base 2.0]

So it seems like 80% of the dudes in Houston did not have flood insurance. I am confused why tax dollars should be used to help rebuild these homes?

I can understand help with roads, infrastructure, initial life saving measures, etc. But people's personal property?

Also I am confused why banks didn't require mortgage holders to have flood insurance? (not many people outright own their home)

[zibazinski]

If they're not in a designated flood zone the banks don't require it. Of course that zone gets moved every year so more people have to pay in. I'm not sure tax dollars are being used. There are already millions of dollars being donated so I don't see how tax dollars need to be spent.

[thyme4change]

Sept 2, 2017 9:44:28 GMT -5 zibazinski said:

If they're not in a designated flood zone the banks don't require it. Of course that zone gets moved every year so more people have to pay in. I'm not sure tax dollars are being used. There are already millions of dollars being donated so I don't see how tax dollars need to be spent.

30,000 homes - probably between 5 and 8 million dollars to rebuild, maybe. They seemed to have raised that, according to various news reports.

[Deleted]

Sept 2, 2017 9:44:28 GMT -5 zibazinski said:

If they're not in a designated flood zone the banks don't require it. Of course that zone gets moved every year so more people have to pay in. I'm not sure tax dollars are being used. There are already millions of dollars being donated so I don't see how tax dollars need to be spent.

FEMA does give money to homeowners if it's deemed a disaster area.  Back in 2007 my flood damage was covered by them, insurance didn't cover any of it. 

[Rob Base 2.0]

I'm thinking part of the aid package Congress will pass will include money to rebuild peeps houses

But I am mean like that. I also didn't think the families of dudes killed in the twin towers on 9/11 should get money from the government either (they shoulda had life insurance)

[zibazinski]

FEMA should use the donated money. Hopefully the Red Cross will be smarter about using the money donated for Harvey for Harvey after getting busted for Katrina dollars.

[Deleted]

Sept 2, 2017 9:50:22 GMT -5 thyme4change said:

Sept 2, 2017 9:44:28 GMT -5 zibazinski said:

If they're not in a designated flood zone the banks don't require it. Of course that zone gets moved every year so more people have to pay in. I'm not sure tax dollars are being used. There are already millions of dollars being donated so I don't see how tax dollars need to be spent.

30,000 homes - probably between 5 and 8 million dollars to rebuild, maybe. They seemed to have raised that, according to various news reports.

Ok, it's Saturday morning and I have a headache, but 5 million divide by 30,000 is $166 each. 

[zibazinski]

Sept 2, 2017 9:52:08 GMT -5 Rob Base 2.0 said:

I'm thinking part of the aid package Congress will pass will include money to rebuild peeps houses

But I am mean like that. I also didn't think the families of dudes killed in the twin towers on 9/11 should get money from the government either (they shoulda had life insurance)

They'd certainly be entitled to survivor benefits for their children. The people killed had been paying into SS.

[Rob Base 2.0]

Sept 2, 2017 9:54:40 GMT -5 zibazinski said:

Sept 2, 2017 9:52:08 GMT -5 Rob Base 2.0 said:

I'm thinking part of the aid package Congress will pass will include money to rebuild peeps houses

But I am mean like that. I also didn't think the families of dudes killed in the twin towers on 9/11 should get money from the government either (they shoulda had life insurance)

They'd certainly be entitled to survivor benefits for their children. The people killed had been paying into SS.

SS I'ld be OK with, but not the other payments

[thyme4change]

Sept 2, 2017 9:54:34 GMT -5 minnesotapaintlady said:

Sept 2, 2017 9:50:22 GMT -5 thyme4change said:

30,000 homes - probably between 5 and 8 million dollars to rebuild, maybe. They seemed to have raised that, according to various news reports.

Ok, it's Saturday morning and I have a headache, but 5 million divide by 30,000 is $166 each. 

I need coffee. Lol. I guess I didn't add enough zeros. Nor did I do even 1 second of critical thinking.

[Tennesseer]

These folks will have to live somewhere whether their homes are rebuilt and paid for by us or not.  We will pay for them to live somewhere either temporarily or long term.

Maybe we could force these newly homeless people over the border into Mexico and make them Mexico's problem.  

[Deleted]

Sept 2, 2017 9:54:40 GMT -5 zibazinski said:

Sept 2, 2017 9:52:08 GMT -5 Rob Base 2.0 said:

I'm thinking part of the aid package Congress will pass will include money to rebuild peeps houses

But I am mean like that. I also didn't think the families of dudes killed in the twin towers on 9/11 should get money from the government either (they shoulda had life insurance)

They'd certainly be entitled to survivor benefits for their children. The people killed had been paying into SS.

The families also received millions (each) from the Victims Survivor Fund which only a tiny fraction was from donations.  

[buystoys]

From what I've seen on TV and FB, a small amount of the cost for rebuilding is being donated.  There are mucking maps already in place (managed by one of the State agencies) and volunteers are going house by house clearing out all the damaged items, removing sheet rock and carpeting and everything damaged, and starting to frame and sheetrock houses already.  Local businesses have donated materials and volunteers are doing the work.

It's still going to take billions of dollars to get all those counties back to "normal" status, but I'm truly amazed at how many people are already hard at it.  I shouldn't be, because I saw what happened with the tornado that hit Garland and Rowlett.  In spite of the tragedy, it's uplifting to see how people come together when there's a disaster.

I have zero issue with the federal government putting money into rebuilding infrastructure and providing short-term aid for those who have been harmed by the storm.  I also know that I'll get a nice big increase in my homeowner and auto insurance policies again this year.  I'll grumble about it, of course, but I also understand that the claims will be HUGE and that we all share a piece of that burden. 

I have mixed feelings about federal government intervention.  There are people who were harmed by Sandy who STILL haven't received the aid they were promised.  I have no doubt we'll see the same thing in this situation.  There will be some who didn't have insurance on their homes and they will suffer greatly.  There will be some who had insurance but it won't cover the total cost of rebuilding/replacing what they had and those people will suffer.  There isn't an easy answer or an easy solution.

[TheOtherMe]

Sept 2, 2017 10:05:37 GMT -5 Tennesseer said:

These folks will have to live somewhere whether their homes are rebuilt and paid for by us or not.  We will pay for them to live somewhere either temporarily or long term.

Maybe we could force these newly homeless people over the border into Mexico and make them Mexico's problem.  

I'm sure this option is being discussed.

Around here if there has been a lot of flooding FEMA buys the houses in the flood plain and the homeowners are not allowed to rebuild in the flood plain.

A local homeowner did use FEMA buyout money to rebuild and got flooded again.  Tried to get it a second time and got told no by FEMA. 

[whoisjohngalt]

A few winters ago we got massive amount of snow. There were many many many houses that suffered all kinds of damage - when spring came I kept seeing houses being stripped and walls and roofs rebuild all over the place. It was all between homeowners and their insurance companies.

I can not understand that logic behind govt rebuilding anyone's homes unless govt destroyed it.

I can understand people volunteering goods and services
I can understand charitable organizations getting involved.

[Lizard Queen]

I think the logic might be that a good number of people could claim that the government was negligent in some way. Such as, allowing development without regard to the amount of area that water could soak into the ground. Proceeds Katrina, where the levees were only built to protect from a category 3 storm, or airport security, that didn't catch the terrorists. Plus, allowing huge swaths of land and destroyed buildings go to waste is terrible for the economy.

[Pants]

I'm a dirty hippie, so clearly I have different perspective about tax dollars.

However, I think it is criminally stupid to allow people to rebuild homes in areas that are expected to flood regularly. Take money for the house and go live somewhere else. It's just gonna keep happening. Projections say that we can expect it to happen more and more. it would be wiser to rebuild elsewhere if one can.

[sesfw]

Zib: Hopefully the Red Cross will be smarter about using the money donated for Harvey for Harvey after getting busted for Katrina dollars.

This is why I don't contribute to the Red Cross

[Pants]

Sept 2, 2017 13:30:45 GMT -5 @anne81 said:

This is a tough one.  Generally speaking I don't support rebuilding in flood zones. This was such a large storm that I can see why many people who didn't feel the need for flood insurance got flooded.  I think there is a better case for rebuilding Houston than New Orleans, which is below sea level.

I think that there needs to be a plan for future flooding, a framework for rebuilding, not just each house going up ad hoc.  For example on the North Shore of Oahu you can see that all the new homes don't have a ground level floor.

Right - I would support rebuilding like this. Should have clarified. But putting your ranch on a slab right where the ranch on the slab was before it got washed away in a flood last year is not smart. 

[whoisjohngalt]

Sept 2, 2017 12:40:35 GMT -5 Lizard Queen said:

I think the logic might be that a good number of people could claim that the government was negligent in some way. Such as, allowing development without regard to the amount of area that water could soak into the ground. Proceeds Katrina, where the levees were only built to protect from a category 3 storm, or airport security, that didn't catch the terrorists. Plus, allowing huge swaths of land and destroyed buildings go to waste is terrible for the economy.

It's a slippery slope, though.  How strict do zoning regulations have to be?

There are areas with floods and earthquakes and tornadoes and snow and ice storms and uncontrollable fires.

That doesn't leave much area for "safe" housing. 

Like I said - when we got a lot of snow a few years ago many many people were having roof problems - either extensive, into the wall leaks or roofs collapsing.  So, does that mean govt should prohibit homes with architectural shingles and only allow metal roofs in this area?

[seriousthistime]

Katrina hit a low-income area hard, and the houses there were not fancy McMansions.  FEMA $$$ to rebuild/replace houses similar to what was lost was not that much compared to Houston.  Hurricane Harvey has flooded lots of expensive areas. It's going to cost a LOT more money to replace homes in Houston compared to the homes lost in Katrina. 

Of course it's foolish to rebuild in the same location where you were flooded.  Where does that leave Houston? A vast area of the huge metropolitan area was flooded. 

[Lizard Queen]

Sept 2, 2017 14:46:41 GMT -5 whoisjohngalt said:

Sept 2, 2017 12:40:35 GMT -5 Lizard Queen said:

I think the logic might be that a good number of people could claim that the government was negligent in some way. Such as, allowing development without regard to the amount of area that water could soak into the ground. Proceeds Katrina, where the levees were only built to protect from a category 3 storm, or airport security, that didn't catch the terrorists. Plus, allowing huge swaths of land and destroyed buildings go to waste is terrible for the economy.

It's a slippery slope, though.  How strict do zoning regulations have to be?

There are areas with floods and earthquakes and tornadoes and snow and ice storms and uncontrollable fires.

That doesn't leave much area for "safe" housing. 

Like I said - when we got a lot of snow a few years ago many many people were having roof problems - either extensive, into the wall leaks or roofs collapsing.  So, does that mean govt should prohibit homes with architectural shingles and only allow metal roofs in this area?

It is, for sure. I'm not saying it is the case in every disaster, but Katrina was exacerbated by the increased development of swampy areas further into the gulf, and Houston was exacerbated by the government allowing to pave over so much land. If you bought before all the additional development happened, then it sort of is the fault of the government. And who the hell wants to sort all of that out in court? But, as a midwesterner where hardly anything ever happens, it does sort of piss me off that my tax dollars go to cover other people's risk--over and over and over again.

[Rukh O'Rorke]

There was an article on slate noted that I think the Dutch were confused by all the damage because there are urban planning options to prevent / minimize this kind of flooding

[alabamagal]

I lived in a city that got flooded by a stalled tropical storm in the 90s. About half the homes in the area were flooded when all the water drained to the river. A lot of the area flooded were poorer areas. I wasn't impacted, so I do not know exactly how it worked money wise. FEMA put up trailer parks for temporary housing ( lasted maybe 3 years). They paid for better flood control. There were whole neighborhoods wiped out. For people to rebuild in those neighborhoods they had to be elevated. A lot of them were 6-8 feet elevated, not quite like beach houses, but looked odd. Maybe 10% of people rebuilt in same area. Since land was cheap a lot of people just went elsewhere.

For those who did not have flood insurance, I think the money to rebuild was in the form of SBC loans. I don't think those without flood insurance just got a brand new house for free.

[thyme4change]

I agree that having a lower level that is a little more weatherproof ID probably a good idea. Even if they found a way to enclose it independent of the upper level, it could be a garage.

That said, the need for A.C. in Houston would increase dramatically.

[tskeeter]

Sept 2, 2017 9:40:39 GMT -5 Rob Base 2.0 said:

So it seems like 80% of the dudes in Houston did not have flood insurance. I am confused why tax dollars should be used to help rebuild these homes?

I can understand help with roads, infrastructure, initial life saving measures, etc. But people's personal property?

Also I am confused why banks didn't require mortgage holders to have flood insurance? (not many people outright own their home)

This issue raises the basic question of how much the consequences of the decisions of some people should be paid for by others.  From failing to buy insurance to protect against natural disasters or medical crisis to choosing to buy homes (mortgage interest deduction) and raise a family (tax deductions related to raising children, etc.).

[tskeeter]

Sept 2, 2017 14:46:41 GMT -5 whoisjohngalt said:

Sept 2, 2017 12:40:35 GMT -5 Lizard Queen said:

I think the logic might be that a good number of people could claim that the government was negligent in some way. Such as, allowing development without regard to the amount of area that water could soak into the ground. Proceeds Katrina, where the levees were only built to protect from a category 3 storm, or airport security, that didn't catch the terrorists. Plus, allowing huge swaths of land and destroyed buildings go to waste is terrible for the economy.

It's a slippery slope, though.  How strict do zoning regulations have to be?

There are areas with floods and earthquakes and tornadoes and snow and ice storms and uncontrollable fires.

That doesn't leave much area for "safe" housing. 

Like I said - when we got a lot of snow a few years ago many many people were having roof problems - either extensive, into the wall leaks or roofs collapsing.  So, does that mean govt should prohibit homes with architectural shingles and only allow metal roofs in this area?

Regardless, some folks try to make others responsible for their poor decisions.  For example, about 15 years ago a couple built an expensive new home in upscale Anaheim Hills, CA and filled it with new furniture.  The next winter, a series of unusual rain storms caused the soil to slide and the house to be declared unfit for habitation.  The house was so dangerous the county wouldn't even let the owner go in and remove the furniture.  The home owners tried to claim the county never should have allowed building on the lot and that the county should reimburse them for the loss of their home and possessions.  But, it turns out that the homeowner had multiple contractors, including a family friend, refuse to build on that lot without building the house on pilings to stabilize the building against soil movement.  Finally the homeowner found a contractor who didn't recognize the risks or who didn't care.  By the way, the house next door, which was built on pilings, handled the rain without damage.

[Deleted]

Sept 2, 2017 15:29:42 GMT -5 Lizard Queen said:

I'm not saying it is the case in every disaster, but Katrina was exacerbated by the increased development of swampy areas further into the gulf, and Houston was exacerbated by the government allowing to pave over so much land. If you bought before all the additional development happened, then it sort of is the fault of the government. And who the hell wants to sort all of that out in court? But, as a midwesterner where hardly anything ever happens, it does sort of piss me off that my tax dollars go to cover other people's risk--over and over and over again.

i agree with this- part of it can be poor planning. One area in England where developers wanted to put new homes was in a flood plain and the insurance companies agreed to cover the area only after the government promised flood control measures would be enacted. The flood control measures never happened, of course. The area I mentioned in Wayne, NJ in an earlier thread didn't have flood problems till they built giant shopping malls and too many highways in the area.

I do think some areas should not permit rebuilding. You take your insurance money, and buy or build elsewhere.

And yes, it does bother me that a segment of the population will go without flood insurance, health insurance, life insurance, LTC insurance, etc, and expect to be propped up by the taxpayers when the worst happens. I remind myself that most of the time the aid is hard to get, comes after many delays, and usually isn't adequate, and I have better control over those factors in getting my own coverage.

[Artemis Windsong]

The people in the Houston area stepped up and started clean up right away instead  of where is the government cleanup people wanted after Katrina.

Katrina displaced complained about being served ham sandwiches instead of McDonalds. They were too used to having everything their way.  A Texan would eat and thank you for serving prepared snake or tarantilla.

[Bonny]

Sept 2, 2017 19:12:34 GMT -5 @athena53 said:

Sept 2, 2017 15:29:42 GMT -5 Lizard Queen said:

I'm not saying it is the case in every disaster, but Katrina was exacerbated by the increased development of swampy areas further into the gulf, and Houston was exacerbated by the government allowing to pave over so much land. If you bought before all the additional development happened, then it sort of is the fault of the government. And who the hell wants to sort all of that out in court? But, as a midwesterner where hardly anything ever happens, it does sort of piss me off that my tax dollars go to cover other people's risk--over and over and over again.

i agree with this- part of it can be poor planning. One area in England where developers wanted to put new homes was in a flood plain and the insurance companies agreed to cover the area only after the government promised flood control measures would be enacted. The flood control measures never happened, of course. The area I mentioned in Wayne, NJ in an earlier thread didn't have flood problems till they built giant shopping malls and too many highways in the area.

I do think some areas should not permit rebuilding. You take your insurance money, and buy or build elsewhere.

And yes, it does bother me that a segment of the population will go without flood insurance, health insurance, life insurance, LTC insurance, etc, and expect to be propped up by the taxpayers when the worst happens. I remind myself that most of the time the aid is hard to get, comes after many delays, and usually isn't adequate, and I have better control over those factors in getting my own coverage.

Since the average FEMA payment for Katrina was about $5,000 I'd like to think that most people who could afford to buy insurance would have and not rely on the government to make them whole. If they did, they would be very disappointed.

ETA: I do think that the poor get hit harder than most other folks. Their options for housing are often limited and they may have little choice about living in more disaster prone areas e.g. flood plains, near chemical plants and other hazards. There's a reason those areas are cheaper.