Houston homeowners unaware that reservoir neighbourhoods are designed to flood

From the article:

“This is not dumb, bad planning,this is very well-thought-out, bad planning.””

The problem in Houston isn't construction in a flood prone area (the whole place is flood prone) but that construction upstream puts more drainage downstream. With Ontario's policy, construction of a suburb 50 miles away may make an existing neighborhood worthless.

FEMA should not be encouraging this by always serving people in known floodplains. I'm sure insurance companies already encode this in premiums (except apparently the ones which did not tell the insured about this issue in Houston).

The article also makes it pretty clear that regional legislation around the issue has been complicated by competing local interests.

Harvey flooded things way outside of flood zones. Huge swaths of land that havent flooded in centuries got flooded. Theyre calling it an 800 year flood.

I don't disagree with limiting construction in flood plains, but you can't issue a blanket statement saying 'no rebuilding.'

That said I’ve a friend who now has been flooded 3 times in three years. He lives near Addicks Reservoir in bear creek. You have to stop rebuilding at some point.

Exactly. These people did, and now they are eager to claim they never knew it was possible. And of course real estate agents and developers want as little responsibility on them as possible, too. So suddenly no one knows anything.

I think if you had run the same query by the same group before Harvey, you would have gotten more affirmative responses.

This is exactly why regulation that limits development for safety (flood plains, electric code, fire safety) is good for most homeowners (who will make short-sighted or optimistic risk evaluations) despite displacing a few on the margin into worse housing situations.

>The worst rain the city remembered fell in 1929, and a worse one struck in 1935. Buffalo Bayou rose up to the second story in parts of downtown. Buildings collapsed. Swaths of city were destroyed.

>Talbott has a simple solution: allocate $26 billion, more than a fifth of the state's 2015 budget, mostly to buy property adjacent to the waterways, bulldoze and expand the canals. That amount of money, he said, could get all of Houston prepared to weather a city-wide, once-in-a-century storm.

http://www.houstonchronicle.com/local/explainer/article/The-...

Same. As a child I couldn’t figure out why we had these big berms and called them a damn. Turns out the terrain slopes so gently (1 ft./mi.) that you can’t even tell

Sort of. There are lots of caveats (taking out a second mortgage removes some of this protection, for example).

Also, in Washington, at least, this is only true if the lender opts to handle it this way. They get a simplified process if it's non-recourse but if they know you have lots of other assets, then absolutely CAN take you to court for the difference, it's just far more costly and they can't use the simplified procedure.

[1] https://en.wikipedia.org/wiki/Greenspan_put

I think this is easily solved by requiring the owner to post a bond that approximates the future risk exposure that public entities (like FEMA, the National Guard, state police, etc.) face due to the new buildings now in place.

That and, of course, full disclosure in sales literature/contracts.

In this way the private property owner exercises their right to dispose of their property as they see fit but the general public is not shouldering a public cost.

"Surprising as it was to residents, the destruction of Coffey Park wasn’t a mystery to fire scientists. They view it as a rare, but predictable, event that has exposed flaws in the way fire risk is measured and mitigated in California. Because it was outside the officially mapped “very severe” hazard zone, more than five miles to the east, Coffey Park was exempt from regulations designed to make buildings fire resistant in high-risk areas.

California fire officials developed hazard maps in the 2000s that for the first time, tied building codes to geographies based on risk. Max Moritz, a fire specialist with the University of California’s Cooperative Extension, said the maps were an important step forward in assessing fire danger.

But the Coffey Park catastrophe has shown that the methodology, and the law underlying it, were too narrow."

After you've seen a heavy one, you realise flooding is a fact of life..

really, what people should do is just start building houses on stilts like they do in coastal areas or similar, because sooner or later, it will flood here.

If this hurricane wasn't enough, then perhaps nothing is.

Sometimes they share that information with each other. For example, some limited loss data is shared among companies for auto claim information associated with auto policy holders. (Not all companies participate. GEICO is the biggest holdout, last I knew.) I have not heard that companies share property damage loss information with each other, but they may do so the same way they share auto claim information.

On the other hand, not sharing may give them a competitive advantage. For example, Allstate systematically reduced their coverage of coastal homes in the New Jersey / New York markets about 10 years ago, because their threat models indicated that the area was due for a major hurricane. This obviously reduced their losses when Hurricane Sandy hit.

Katrina got all of the big insurers to take a closer look at their exposures from hurricanes, and I would not be surprised to learn that premiums for coastal properties all along the East Coast and Gulf Coast have skyrocketed in the last decade. The risk is very high. They enjoyed over 10 years of low losses, but then this year they got hammered in Texas and Florida.

So, would companies share detailed information with each other? Probably not, but they probably have a good idea of what their competitors have paid out for major events, and they definitely know where the risks are geographically.

Are they going to share that detailed information with the public? Hell no. They bought it, they paid for it, it's theirs, and they're going to keep it.

The easiest way to determine if there's a high risk is to ask for a quote on a property before you buy it. That will tell you a lot. For example, if you're thinking of buying some property in southern California and wonder if the fire risk is high, just ask for a quote. If wildfire risk is high, Allstate (for example) will simply tell you they can't write a policy for that property. Other companies may write a policy, but the premium will be higher than surrounding areas with lower risk.

Flood insurance is a special case. No homeowners policy offers coverage for flooding, because it is the textbook example for adverse selection in property and casualty insurance. (That is, only people who live in a flood plain will buy flood insurance, so the risk is not spread across a large enough population. Fire, on the other hand, can happen anywhere, so everyone buys coverage.)

For this reason, the government offers flood insurance for those who live in flood plains. Interestingly enough, even then not many people buy the coverage.

Edit: Earthquakes are another example of adverse selection. If you live in California and have investigated premiums for earthquake coverage, you already know this. No, it is not covered by your homeowners policy. No, I don't want to pay for it when it happens, because I live in an area with extremely low risk for earthquakes (and flooding). And yet, when it happens, I will surely be paying more taxes to cover someone else's losses.

I've had flood plain maps included in my mortgage paperwork, but I've also had the other parties sit their being verbally impatient while I actually look through everything instead of just signing where they show me.

I guess if you buy cash you might not know, but in general it's in the documentation you get while purchasing a house here in TX.

http://www.harriscountyfemt.org/

The federal map for our home is wrong and puts us in a flood plain. But that map was from before our development was built, which slightly relocated a creek. For whatever reason, our county refuses to submit their updated map. But the previous homeowner got a special note at the federal level saying it isn't in a flood plain.

Houston itself was only built up to the degree it was on the backs of federally subsidized flood insurance and huge amounts of public money spent to build the dams around it. If developers had to eat the real cost of building in a flood zone, many fewer would have done so.