Hurricane Harvey was a disaster foretold.
Nearly two decades before the storm’s historic assault on homes and businesses along the Gulf Coast of Texas this week, the National Wildlife Federation released a groundbreaking report about the United States government’s dysfunctional flood insurance program, demonstrating how it was making catastrophes worse by encouraging Americans to build and rebuild in flood-prone areas.
The report, titled “Higher Ground,” crunched federal data to show that just 2 percent of the program’s insured properties were receiving 40 percent of its damage claims. The most egregious example was a home that had flooded 16 times in 18 years, netting its owners more than $800,000 even though it was valued at less than $115,000.
That home was located in Houston, along with more than half of America’s worst “repetitive loss properties” identified in the report. There was one other city with more repetitive losses overall, but Houston is where the Federation went to announce its Higher Ground findings in July 1998, to try to build a national case for reform.
“Houston, we have a problem,” declared the report’s author, David Conrad. The repetitive losses from even modest floods, he warned, were a harbinger of a costly and potentially deadly future. “We haven’t seen the worst of this yet,” Conrad said.
Houston’s problem was runaway development in flood-prone areas, accelerated by heavily subsidized federal flood insurance. Now that Hurricane Harvey has turned Conrad’s warnings into reality, it’s worth noting that Houston’s problem was in part a Washington problem, a slow-motion disaster that was easy to predict but politically impossible to prevent.
Congress often discusses fixing flood insurance to stop encouraging Americans to build in harm’s way, but the National Flood Insurance Program is still almost as dysfunctional as it was 19 years ago. It is now nearly $25 billion in the red, piling debt onto the national credit card.
Meanwhile, cities like Houston—as well as New Orleans, which Higher Ground identified as the national leader in repetitive losses eight years before Hurricane Katrina—continue to sprawl into their vulnerable floodplains, aided by the availability of inexpensive federally supported insurance.
Hurricane Harvey is not the first costly flood to hit Houston since that 1998 report. In 2001, Tropical Storm Allison dumped more than two feet of rain on the city, causing about $5 billion in damages. Two relatively modest storms that hit Houston in 2015 and 2016–so small they didn’t get names–did so much property damage they made the list of the 15 highest-priced floods in U.S. history.
But Houston’s low-lying flatlands keep booming, as sprawling subdivisions and parking lots pave over the wetlands and pastures that used to soak up the area’s excess rainfall, which is how Houston managed to host three “500-year floods” in the last three years.
“This was inevitable,” says Conrad, who is now a consultant for the Association of State Floodplain Managers. “We never learn.”
Storms are natural events, but floods are usually man-made disasters. That’s because flood damage depends not only on how much water is involved but on how many people and structures are in its path and how prior human intervention had affected that path. Government policies affect all three of those variables, which is one reason why “500-year floods”—which are supposed to have a 1-in-500 chance of occurring in a particular place in a particular year—are becoming so common.
So far, the political debate over Harvey has focused on climate change, which scientists believe is increasing the frequency and severity of extreme rain events, increasing the amount of water dumped on cities like Houston. Climate change almost certainly made Harvey marginally worse, giving the storm a boost through higher sea levels and warmer sea temperatures.
And it’s true that federal flood policies have ignored climate. President Obama tried to change that a bit, ordering federal agencies to account for rising seas and other flood risks when permitting infrastructure projects, but President Trump revoked the order just last week.
But the climate is not changing fast enough to explain the dramatic spikes in disaster costs; all seven of the billion-dollar floods in American history have made landfall in the 21st century, and Harvey will be the eighth. Experts believe the main culprit is the explosive growth of low-lying riverine and coastal development, which has had the double effect of increasing floods (by replacing prairies and other natural sponges that hold water with pavement that deflects water) while moving more property into the path of those floods.
An investigation last year by ProPublica and the Texas Tribune found that the Houston area’s impervious surfaces increased by 25 percent from 1996 to 2011, as thousands of new homes were built around its bayous. Houston is renowned for its anything-goes zoning rules, but the feds have also promoted those trends by providing extremely cheap insurance in high-risk areas.
Created in 1968, the national flood program was actually supposed to help prevent risky development. Its complex rules required new construction within designated 100-year floodplains to meet higher flood-proofing standards, and “substantially damaged” properties that received claims worth half their value to be relocated or elevated.
But most of the program’s 100-year flood maps are woefully obsolete, relocation almost never happens, and Uncle Sam has continued to cut multiple checks for repetitive losses. A recent Pew Foundation study found that the Higher Ground problems have not been solved; about 1 percent of insured properties have sustained repetitive losses, accounting for more than 25 percent of the nation’s flood claims.
One $69,000 home in Mississippi flooded 34 times in 32 years, producing $663,000 in payouts. The government routinely dishes out more in claims than it takes in through premiums, and the program has gradually drifted deeper and deeper into debt.
“It’s basically lather, rinse, repeat,” says Steve Ellis, vice president of Taxpayers for Common Sense. “The fundamental responsibility of government is to protect people, but this program keeps encouraging people to build in harm’s way.”
Environmentalists, taxpayer groups, and other reformers across the political spectrum have tried to rein in the program, pushing to raise premiums to better reflect flood risks and limit repetitive loss payments. But they have encountered ferocious pushback in Washington from realtors, homebuilders, and other development interests, as well as politicians representing areas that tend to go underwater.
They finally broke through in 2012, when Congress passed a rare bipartisan reform bill that would have jacked up premiums to some semblance of actuarially sound levels within a few years. But after an uproar from coastal and riverfront communities, Congress reversed itself in equally bipartisan fashion in 2014, so most premiums will rise much more gradually, and won’t reflect actual risks for as long as two decades.
Now Congress must reauthorize the program before it expires on September 30, and Congressman Jeb Hensarling, a Texas Republican who chairs the House Financial Services Committee, has proposed several reforms to rein it in.
But his own committee rejected his plan to limit subsidies for expensive repetitive-loss properties, only approving more ideological measures to expand private flood insurance that face an uncertain future in the Senate. Reformers hope the shock of seeing America’s fourth-largest city underwater will at least help build support for more money for better floodplain mapping, as well as flood-proofing and relocation of the most vulnerable properties. But they recognize they’re swimming upstream.
“The floods have gotten worse, but the politics haven’t gotten better,” says Larry Larson, a senior policy director for the Association of State Floodplain Managers.
Read more at Politico