Times Record: The tide is high (Nov. 29, 2013)

As municipalities begin looking over their new federal flood maps, one thing should become unmistakably clear: The water is rising.

That’s not a problem for those living inland, but here in the Mid-coast, billions of dollars in home equity, waterfront jobs and taxable land could be lost if we don’t adapt our development and land-use policies accordingly. That means challenging FEMA maps may be a case of trying to bail the ocean with a thimble.

It’s perfectly understandable that a town — not to mention the property owner — would want to keep a million-dollar home from becoming worthless because of a federal map. And yet, the maps are only a harbinger of what’s to come, with sea-level rise all but assured, coastal storms becoming stronger and our penchant for living and working near the water unquenchable.

Our country has seen plenty of examples where we’ve rushed to subsidize private risk by placing it in the public domain, whether it’s bailing out a bank that’s “too big to fail” or issuing property tax breaks to multinational companies in a fuzzy exchange for jobs.

In this case, the National Flood Insurance Program uses public funds to supply insurance to waterfront homeowners where the private market won’t. But the NFIP is broke. In 2005 alone, Hurricanes Katrina, Rita and Wilma forced the U.S. Treasury to pay $19 billion because claims exceeded the Program’s funds. A task force in Mississippi estimates that, after $7 billion in Hurricane Sandy payments, the NFIP will be $26 billion in the hole.

Why has the private market failed to provide flood insurance? Because they know there’s an excellent chance that if you’re too close to the water, you’re going to have a damage claim. So the government — you and I — step in to take some of that risk away from waterfront owners.

That’s wrong. If the hurricane season of 2005 didn’t prove that, then certainly Hurricane Sandy, which wiped out the Jersey Shore and some of metro New York, did. It’s simply getting too risky to build by the shore.

So where does that leave the Mid-coast, with its wealth very much attached the fortunes of its coastline?

Some property owners have already seen rate increases. FEMA in January began removing subsidies through rate increases of 25 percent per year on some secondary homes. Starting in October, properties previously covered by a subsidized rate are seeing rates go up to the full rate after a sale or lapse in coverage. The prospect and fact of rate increases have caused a backlash in parts of the country subject to flooding, with some lawmakers working to postpone 20-percent increases set for October 2014.

Locally, municipalities are paying a lot of money on challenges to flood maps that — if successful — would only plug a finger in a dike of inevitable claims. As water rises, property values will drop, inevitably.

We can’t fault municipalities for representing their constituents by challenging the new FEMA flood maps. After all, they’re also out to protect local taxpayers by rescuing billions in taxable waterfront that could be lost.

But homeowners need to understand that the risk of waterfront development is now, correctly, going to be reflected in the cost of insurance.

Congress should not delay the timeline for decreasing flood insurance subsidies. And municipalities might better spend their time considering zoning and land-use rules that contemplate a shifting coastline, rather than try to push back a tide that’s rising.

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