New projections on home mitigation
A home in Ortley Beach, N.J. is elevated to mitigate and adapt to growing flood risk from storm surge after Hurricane Sandy, April 13, 2013. Courtesy, Sharon Karr/FEMA
As we saw in the recent South Florida flooding, if it rains, it can flood. Mitigating the damage from the deluge has become a priority for many across the country – including economists at the Congressional Budget Office (CBO), who recently released a working paper noting the dollar savings on property-level adaptations. They say for every dollar spent to elevate or buy-out a flooded home, $2.69 would be saved in future costs over the next 30 years – which is a huge return on investment and would reduce exposure drastically. So, I sat down with one of the paper’s co-authors, Evan Herrnstadt, and Tom Little, President & CEO of Floodproofing.com, to better understand the importance of these findings and their impacts on the flood insurance industry in the newest episode of the Florida Insurance Roundup podcast.
Evan Herrnstadt, Economist, Congressional Budget Office
Herrnstadt and co-author Jared Jageler noticed a large, disjointed documentation on residential flood adaptation, so they compared and contextualized studies with preexisting flood modeling to create damage projections over 30 years. They found there are nationwide opportunities for adaptation for about1.3 million projects (each adapting a single property of one to four units) where the expected avoided damage exceeds project costs primarily from elevating the home above flood stage or a buyout of the property for later destruction. Finishing all these projects has a $193 million price tag but could save us $519 billion in expected damages over 30 years – with 138,000 projects resulting in damage avoidance over six times the cost of the project.
Tom Little, President & CEO, Floodproofing.com
“This is the type of information that we need to get out there to continue to build awareness that we can actually invest money and get a strong return on that investment, by retrofitting the existing infrastructure that we have,” said Little, who is a Certified Floodplain Manager and Vice Chair of the Flood Mitigation Industry Association. “The same analysis would apply to non-residential on our commercial structures and really lines up with findings from the National Institute of Building Science.”
While the CBO doesn’t make policy recommendations to Congress, they do identify trends, and home elevation seems to be the strongest choice for flood mitigation. However, the paper noticed that FEMA has not funded much other residential floodproofing, instead finding a history funding property-level adaptation – around $280 million on various projects from 2008 to 2019. But according to Hernnstadt, those other methods work to mitigate damages, too. Dry floodproofing, as it’s known, involves building physical barriers to stop water and other debris – but the NFIP doesn’t grant premium reductions for any such modifications. The CBO included one dry floodproofing scenario in their paper, Hernnstadt contending that with these measures, “you 
could provide protection to a large number of properties for which the avoided damage outweighs the cost.”
In our conversation, I noted that mitigation that better adapts homes to flood risk will lead to lower insurance costs and encourage more private companies to write flood insurance. You can hear more of our conversation, including a wide array of floodproofing techniques in episode 50 of the Florida Insurance Roundup podcast Dollar Sale on Flood Damage.
LMA Newsletter of 6-24-24
