Poor planning leaves Texas struggling to overcome flooding disaster

State action needed when federal insurance fails

WASHINGTON, D.C. - For four years, Texas lawmakers watched as reservoirs dried up and the state plunged deeper into a water shortage brought on by the most severe drought in its history. It seemed then completely counterintuitive that Texas would ever need to worry about flooding. 

Yet that’s exactly what’s happened. Massive flooding in the past few weeks has led Gov. Greg Abbott to declare 37 counties disaster areas. With swelling populations and known flood zones, solid policy is key to disaster recovery – but in states such as Texas and Oklahoma, flooding policy is largely absent.

For states with booming urban areas, poor flood planning and ineffective policy can be particularly disastrous. North Carolina, Florida and California all have multiple spots on Forbes’ 2015 fastest-growing cities list, but people flocking to cities such as West Palm Beach or Raleigh can rest easy.

Each of the states’ legislatures has passed some sort of precaution that helps with not only the cost of flood insurance, but effective evacuation, response and rebuilding.

California passed a bill in March that would allocate $660 million to new flood-control projects. And get this – the rest of the $1 billion package would go toward emergency response to the state’s drought.

Contrast that with Texas, which has no centralized flood program. A disaster recovery proposal that housing advocates say would take months off of the rebuilding process in participating communities was finally revived in late May. Unfortunately, it passed the Senate two days after 11 inches of rain devastated Houston.

And only a month before floods ripped through Oklahoma, proposed state legislation put the availability of flood insurance at risk in communities with oil drilling operations that would make it harder – and in some cases nearly impossible – to secure affordable rates. With the current bill language, areas with drilling would be uninsurable because of the increased flood risk it could cause. 

The Lone Star state has four major cities that also appear on the Forbes list and lie along an area known as “flash flood alley”. Paradoxically that hasn’t stopped developers from raising new construction in known flood zones in Austin and Houston.

In lieu of a state-wide flood recovery plan or legislation to prevent or address flooding, they principally rely on the federally subsidized National Flood Insurance Program (NFIP) to recoup any potential losses. The problem with the federal program? It’s failing – and fast.

The program was created in 1968 for property owners in flood-prone areas, who were often refused insurance by private insurers. The government agreed to subsidize flood insurance through private partners to expand access and cover losses for homeowners.

But, as demonstrated in the fallout from Hurricane Sandy, the NFIP is riddled with problems. Allegations that private insurers contracted through NFIP changed damage assessments and underpaid homeowners in Sandy’s aftermath have led to criminal investigations from the U.S. Attorney General’s office and a task force assigned to reforming the program.

After only four months on the job, NFIP director Brad Kieserman left his post, calling it a “melting iceberg.” Kieserman said that the network of private insurers has become too big for any sufficient oversight. A 75-member staff oversees the private contractors who insure 5.3 million people.

“We have lost the capability to detect and monitor problems in that program,” Kieserman told the House Financial Services subcommittee before his departure

NFIP currently owes the federal government $23 billion. It has been on the U.S. Government Accountability Office’s “high risk” list since March 2006 “because of concerns about its long-term financial solvency and related operational issues.”

Texas homeowners and developers aren’t the ones who rely on the NFIP. In fact, 80 percent of all flood insurance policies are obtained through the program. The difference in states such as Texas and Oklahoma is there’s almost no state action to help with flood prevention or clean up.

As The Economist points out, only 12 of Texas’ 27 Army Corps of Engineers flood-reduction projects received federal funding because local sponsors, with no centralized state programs to help, couldn’t meet the funding requirements for federal subsidies. This leaves high-risk communities open to maximum flood damage.

Lawmakers can’t change the weather, but they can work together to craft good policy. With experts predicting that rising temperatures could lead to extreme weather events, it’s time for state and federal policy makers to prepare for the impossible. You know, like a flood in the middle of a drought. 

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