Most of New York’s coastal residents hurt by Hurricane Sandy are turning down a very generous incentive to sell their damaged homes to the state. The State intended to transform this vacated land into flood zone protection. The NY Times reports that only 10% of the eligible are participating. For the remaining 90% who rebuild, will their new homes be better able to withstand the next flood? What investments (and at what additional costs) have the stubborn home owners now made to reduce the costs they face from the next flood? While it would be costly to collect these data, such a “small ball” climate adaptation study would be quite interesting. The article does highlight that “moral hazard” lurks. Federal $ will be used to help affected home owners to rebuild in the same affected areas. An organized retreat from such areas is likely to be a prudent adaptation strategy. FEMA’s place based investments are likely to slow down this out-migration. This benefits the land owners in coastal places but may put more people at risk. I continue to work on the relationship between migration and natural disaster shocks.