Federal Incentive Cuts in High-Risk Areas Improve Flood Resilience, Study Finds

A recent Nature Climate Change study suggests that removing federal subsidies in high-risk flood areas can discourage development and boost disaster resilience. One example is the 1982 Coastal Barrier Resources Act (CBRA), which reduced flood risk by restricting federal incentives, including flood insurance, in over a million acres along U.S. coastlines. These areas now have significantly fewer buildings and have contributed to reduced flood damage and significant savings for the National Flood Insurance Program (NFIP). The study also points out that protecting natural landscapes, such as wetlands, in these areas helps mitigate flood risks in neighboring communities.

However, this approach comes with challenges, particularly in the face of a nationwide housing shortage and growing demand for affordable housing. Programs like FEMA’s Community Rating System (CRS) offer some relief by incentivizing communities to exceed flood management standards. Although only a small number of communities achieve the highest CRS ratings, they benefit from lower insurance premiums and increased resilience.

The study underscores the importance of public education on flood risks and insurance coverage, especially after disasters like Hurricane Helene. Increasing awareness of flood insurance requirements and expanding federal policies like the CBRA could enhance community resilience while promoting equitable flood insurance coverage.