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letters | the storm

Federal flood insurance encourages irrational choices

GIVEN FOOTAGE of a sand bar barely two blocks wide jammed with destroyed houses, the sense of loss can give one pause, even a propensity to think of the devastation as a tragedy. The stuff of the lives of hundreds of families is either in the ocean or saturated. Apart from a loss of life, I believe that we demean the sense of “tragedy” when we confuse it with what is, in fact, the rational consequence of irrational behavior.

Folks have known for years that it is a bad idea to build your house on shifting sands. Why, then, have so many houses sprouted up on sandbars, particularly along the mid-Atlantic coast? If there existed a free market for houses built on shifting sands, few would exist. A great many of those houses are financed with someone else’s capital, and those loans are conditioned upon the fact that Congress, by creating the federal flood insurance program, elected to obligate all of us taxpayers to pay for rebuilding those houses.

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