Comment by arjie | Hacker News Reader

Comment by arjie | Hacker News Reader

Historically that doesn’t make sense. Usually by not relocating you can extract greater concessions from your fellow citizens. As an example, if you left Rancho Palos Verdes when signs showed up you could have bought an equivalent home. But if you waited for your property there to be condemned, you received money equivalent to the maximum of the price in the last three years. The latter is obviously superior to maximize your own capital with the bonus that you get to live there until it is dangerous.

Likewise, the flood plains of Texas are cheap and nice to live in when there are no floods and when floods are imminent you have sufficient warning that you can evacuate and the federal government will compensate you. You can then go back and live there. This one is harder because it is unpleasant to move and you don’t receive the inflated price but it does incentivize some on the border.

Of course the fires in Malibu are a story of going too far in the wrong time. If they’d had a sympathetic administration in the federal government likely some kind of compensation scheme could have been worked out. So you have to work on the politics and the economics.

Its probably cheaper to start buying out people now (no way this cost isn't going to be socialized) than to risk in the future ultra expensive bleeding heart projects to kick the can down the road.

At the very least a moratorium on new builds and additions should go into effect immediately.

Just regulate it, make every home buyer buy an insurance for when it eventually happens. That way people who think its worth it will live there and all the relocation is already paid for.

No outcome improves except by hiding a horror inside it. This is the Omelas reading of government intervention.

Keep in mind, at some point, insurers simply won't pay out.

at some point slightly sooner now thanks to parent comment

Wouldn’t plan it but sounds like could’ve been a solid strategy assuming trust in timely condemnations (out of homeowner control, I think).

But the National Flood Insurance Program will, with plenty of federal bailouts.

Private insurers haven’t been willing to cover large parts of the south for decades. The NFIP was the backstop and already overstretched when Katrina hit New Orleans, which is when it first got bailed out. It’s been a downward spiral ever since.

The bond market will only accept this up to a point.

The bond market is telling us the free lunch is over - https://www.axios.com/2026/05/26/inflation-debt-oil-bonds - May 26th, 2026

My understanding is that ever since around 2018, the NFIP's premiums must actually reflect the payouts.

We're already seeing other states struggling with soaring house insurance rates (California and Florida) and a pattern of spikes in rates leading government mandated caps on rates leading to insurers pulling out of the states.

I've no idea what the going rate for insurance is currently in New Orleans but it has to be crazy right?

$6k/yr for $300k coverage in New Orleans.

That's a a lot less than I expected. Is it difficult to get coverage?

My insurance agent told me that insurers in the US generally don't cover floods at all, because its expected that your compensation will come from the government.

They won’t pay out even outside risky areas if your stuff is too old. 35 year old roof blown off in a storm? Insurance will say it was at end of life anyhow and worth $0. Tough.

There’s enough political power to force the government to pay for the belief systems that have been fostered by a captured media environment.

The rational part of the economy has less leverage when the irrational information market is so large and well funded.

The majority of New Orleans residents aren't wealthy enough to convince the state to pay them (or even care what happens to them, really). If recent news is any indicator, being non-white means they are screwed.

At some point you’ll have to do it without insurance or mortgages though. There are places on the island of Hawaii where neither are available due to volcano risk.

That's easy to do. It will simply become impossible to convince people to invest in their houses. Even force of law will fail.

Go check out the "Maas-vallei" in the south of the Netherlands to see cities (10+) that really, really shouldn't be located where they are (medieval foundations were built on the shores and never replaced. They've eroded away decades ago and still aren't being replaced, plus they've got more plant roots in them than forest soil). And Belgium has it worse.

It isn't even the result of rising sea levels. It's just too many buildings. Too little places for the river to go in such flat terrain.

People live there, are unwilling to move, are unwilling to upgrade their houses, and every 10 years or so, a flood comes, things collapse, often 5-10 people die, government pays for the houses and bridges that collapse and nothing changes until the next flood comes. Sometimes the houses are "repaired" (never the foundations of course) and it's rented out, usually to young families who can't afford better. I'm over 50, and I remember this happening when I was 5.

Best of luck to New Orleans.

Classic example of perverse incentives and moral hazard.

The government actually has to do something for their citizens?! Communism.

Where do you get the idea that under communism the government helps the citizens? Talk to a few Chinese homeless people. It's getting easier to find them every year.

I guess in the US you could ask Cubans.

Reply on news.ycombinator.com