However, that doesn't neccesarily imply that there should be flows of money available to rebuild in vulnerable locations. Insurance becoming unavailable or unaffordable is probably the best signal available that someplace is a bad place to live. If you can't afford the price or the risk ... There are lots of other places in the world.
It's one thing to say "don't buy beach front property in the Florida everglades" but what do you do with the millions who already own such property?
This came up with hurricane Katrina and Louisiana. Multigenerational communities were completely obliterated. I really don't find "the market said you should move" to be a compelling response.
These places are no longer safely inhabitable due to rising ocean levels. People are going to have to be relocated one way or another.
And I have no sympathy towards the "been there for generations" argument. The circumstances of your grandma just can't be a reason for what people do in the present - it s too unfair.
Chicago is a more scalable model, as both raising the city and moving existing housing worked quite well. https://en.wikipedia.org/wiki/Raising_of_Chicago
The Chicago TARP was commissioned in the 1970s and won't be completed until 2029. It's cost > $3 billion to date.
Florida existed this way for 100 yr. You have lots that had a house built in 1850, wiped out in 1900, rebuilt, wiped out in 1950, replaced with a double wide, wiped out in 2000, and then the owner gets told "sorry, build a multi million dollar house on stilts with windows rated to stop a flying patio chair and a roof you could dangle the house from or F-off"
I understand that there's a desire to stop sketchy interests from billing off "disposable" construction as "this will resist a hurricane and is prob good for 100yr" and pocketing the difference before vanishing (especially among the HN crowd because they're demographics who usually get left holding the bag) but it's not economically tenable to force communities to construct above their means either by law or by proxy with provisions written into insurance and lending requirements.
Those parts of New Orleans that never bounced back are just the denser more vertical versions of those poor Florida communities. There just isn't the money there. And while you can potentially cover this with state and federal programs (e.g. FEMA), it seems like in practice they don't quite bridge the gap.
What kind of low quality development makes sense when you know it's only going to be washed away into the ocean at some random point within the next 50 years? Who is going to live in a place like that? What happens to them when they lose everything?
The millions that own beach front property should accept the value of their land will decrease as it becomes harder to insure. If they don't want to lose equity, sell it sooner than later.
For better or worse, markets are the clearest signals we have in a hugely messy world. That shouldn't prevent us from doing the best thing available, but the world is not inherently fair and safe, and it's not possible for it to be perfectly fair and safe with our current technology and psychology.
Should the government assist or are you of the opinion that it's just bad luck that they need to deal with on their own?
Personally I think the most rational option would be for the government to build non-profit apartment complexes across the country, but localized in areas that are projected to be safe for 100+ years where affected families could be relocated. I don't think they should be pumping money into rebuilding homes in the exact same vulnerable location though - I don't know if that's happening or not.
Normal people who've "put down roots" incur a HUGE cost when they move away from all that. Lives become optimized, you establish relationships with businesses. You make friends and engage in mutually beneficial favor trading. Ripping all that away is probably on the order of a 15-30% reduction in real income depending on the individuals in question.
People who are able to move out of areas that are projected to be hit hardest by climate change should consider moving away sooner rather than later to manage that transition more on their own terms.
Globally, we're looking at billions of climate refugees needing to move somewhere and some of them will be displaced Americans. It's not going to be optimized for anybody and even people who don't have to move will be impacted by the influx of people coming into their cities.
I agree, we should be building up infrastructure and housing in those areas to provide places for climate refugees both for those in the US who are forced to move and to house the millions we'll need to bring in from outside of the US. As far as I can tell we're just ignoring that the massive wave of migration due to climate change has already started and we're not doing anything to prepare.
They can’t expect us to cover their losses, especially predictable and repeated losses.
When people throw money at an IPO only for it to tank we don't go around refunding them. Investments generally are NOT guaranteed, this includes assets like a house.
Should society at large be paying for someone's luxury beachfront home to be rebuilt over and over in the face of lack of insurance? Should people ignoring the climate observations and making dumb decisions NOT be penalised by losing their assets?
Honestly, there are good answers to this last question - no one wants to see an instant slums and the ongoing effects burdening society. No one wants to see grandma thrown to the curb. To be considered a society one has to act like it, which includes helping those who are down.
But not by trying to reset it back the way it was. Not by guaranteeing that people can make decisions - silly or not - with any level of guarantee.
Maybe a government buyback for property in an area that is rezoned because of climate reasons. Maybe a change in building standards to make rebuilds more reliable in the face of the new normal. Maybe public housing elsewhere to absorb the impact of such events until people can remake their lives and move on. Feel free to insert better ideas.
But the change in circumstances - in this case climate activity - has to be handled or it borders on stupidity.
I strongly believe in mandatory house insurance. We live in an area where full house insurance was mandatory and organized by the government until the 90ies. It was cheap, because it was subsidized and everybody paid in. Then they privatized the insurance, and they weren't mandatory anymore. A relative of mine realized that insurance that would cover flooding would now be nearly twice as expensive in his area as the previous mandatory insurance, so he got one which did not cover flooding. 8 years later, his house was flooded.
A few years ago, a family of 5 here became homeless because their house burned down. They did not have any insurance and lost 600,000 EUR and their place to live.
I think auto liability insurance (or an equivalent bond posting) should be mandatory, because it protects others. I don’t think theft or collision insurance should be mandatory (and in fact don’t carry it on some of our cars).
Insure against losses that you couldn’t withstand. Don’t (or self-) insure against those that you can easily withstand. No government intervention needed there IMO.
You don't think other people are impacted when families lose their homes and everything they have? Who do you think is going to end up having to pay to house and feed them? Taxpayers. The economic effects on people who still have their house aren't immediate and obvious so it's easy to pretend that nobody else is impacted, but it's almost never the case, especially when it's not about one guy whose house burned down after he tried to save a little extra money by not insuring against fire, but entire communities who lose everything.
When government manages insurance and everyone is covered the costs are dramatically lower and everyone is safer. The role of government should be to provide important safety nets to people providing stability and confidence to communities and the economy. Government can do it without needing to continuously stuff their pockets with higher and higher profits like shareholders demand, and without doing everything possible to avoid paying out valid claims the way private insurance companies do in order to protect those profits.
While there does come a point where it doesn't make sense for people to continue to live in certain areas, for more typical cases it'd be a major improvement that would save more money than letting people who just want to gamble on the odds get away with not paying for insurance at all. Eventually many of those people lose that game and instead of just upsetting their lives it destroys them while everyone around them pays the higher costs.
All of those things could help people be more successful, make them less likely to lose their job or have a better relationship, etc.
At some point, there’s a line where government should protect third parties and a different line where government protects first parties from themselves. Different people will prefer those lines be located in different places; I tend towards giving individuals power over governments.
I'd also say that in many cases the best thing you can do to empower individuals is to give preference to government over corporations. Government is (or at least can be made to be) accountable to the people. You don't have the power to elect the CEO of a company or vote for their corporate policy. Voting with wallets is largely a myth. If that actually worked there wouldn't be massive numbers of companies constantly screwing people over. Some companies are even basically universally hated yet remain highly successful. Government is where individuals hold the most power, especially at local levels. Care has to be taken to not let fear of government power back you into a position where you're being taken advantage of by others looking to force you into paying for their negative externalities.
You are thinking of programs like the NFIP (national Flood Insurance Program)...
Unfortunately, programs like this create perverse incentives. People keep building homes where none would be if disasters were priced in.
The issue with private insurance when it comes to natural disasters is they don't like losing money (understandable) and the climate is changing.
Those two things together mean that this year you could have good insurance that covers freak accidents, but what about next year, or next decade? An area that may have only seen flooding once a century might be predicted to see it once a decade or even once a year.
People still live there. Some people lived there with the insurance coverage for those natural disasters only to see it slowly go away or to be outright cancelled. We can't expect that they all migrate.