Not Moving to Higher Ground

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.  

Author: Matthew E. Kahn

Professor of Economics at UCLA.

20 thoughts on “Not Moving to Higher Ground”

  1. This ha been going on for years. I lived in NC where the Feds and the state kept pouring money into siring up the devastated Outer Banks so the 1 pour cent wouldn’t lose one of their many vacation pads.

  2. “An organized retreat from such areas is likely to be a prudent adaptation strategy.”

    As opposed to simply building homes capable of surviving in that environment? Really, why not make aid in rebuilding contingent on the new structure being able to survive what destroyed the old? It’s not like such structures are impossible, after all.

    1. Indeed, that seems to be part of the program.

      Both state and city officials said they would help homeowners who choose to rebuild to do so in ways that would be more resistant to storm damage in the future.

      1. …why not make aid in rebuilding contingent on the new structure being able to survive what destroyed the old?

        Because what destroyed the old was a 1 in a 200 year storm. Unless of course you believe in the liberal hoax known as climate change. Are you going to use big damn liberal government to plan for that false liberal contingency? What happened to your property rights BS?

        1. Me? I wouldn’t give them the aid in the first place. I don’t believe the government should prohibit OR subsidize living in particularly dangerous locations. I believe people should be free to take risks, and then have to accept the consequences. And that as soon as you set out to protect people from the consequences of their own choices, you set in motion forces which will lead to depriving them of the RIGHT to make their own choices.

          Freedom and living with the consequences of your choices are inseperable, in the long run.

          I was simply observing that there were other prudent responses to bad storms, besides abandoning the area where they happen.

          1. Me? I wouldn’t give them the aid in the first place.

            Good to see you are back on the reservation. I was worried this liberal blog was starting to soften your selfishness.

          2. As opposed the kind, generous and caring people who give people other people’s money.

            Exactly. How dare they? Selfish for the good of the group is a sin. Selfishness for oneself is the greatest good. What could be clearer than that? It’s a self-evident truth. If man were meant to run in a pack he’d have fins and gills so he could swim in a school. Or he would divide himself into nation-states and create a social safety net for the weaker members. Since we don’t have gills or nation-states this truth should be obvious to all…

          3. See, there’s your problem, right there: You think groups are the reality. But they’re not, individuals are the reality. Groups are just an abstraction, all morality happens at the individual level. EVERYTHING happens at the individual level, “groups” are just something we talk about because talking about Bob and Harold and Judy every time gets awkward. But you set Bob on fire, and dunk Harold in liquid nitrogen, and you don’t have a comfortable group. You’ve got to badly hurt individuals.

            You steal from Peter, giving it to Paul doesn’t cancel out the theft, it just makes Paul an accomplice. Liberals think they’re doing good with other people’s money, but they’re just piling up victims on BOTH ends of the transaction.

            I honestly think your average liberal somehow skipped that early developmental step, where most people figure out that other people’s stuff is other people’s stuff, not theirs.

    2. As a former New Yorker who spent some time in Breezy Point (courtesy of a grandfathered-in friend) I beg to differ. We’re talking barrier island here. Much of it topping out at a whole meter above the high tide line. Sand all the way down. Originally built as summer cottages until the city real estate marked made it financially attractive for people to live there. Making something that could survive a hurricane on those lots just doesn’t make sense; far better to plan for flooding and rebuilding.

      But even the most generous relocation incentive isn’t really going to help. The five boroughs are already full. So you’re talking not just moving house but moving careers, schools, everything. No wonder people aren’t taking it.

  3. One thing Matthew shouldn’t assume is anything like equilibrium in the NYC housing market. There is a persistent shortage in the area. (There is a lack of equilibrium for several reasons. In a nutshell, the construction unions are too strong and depress supply, and the other unions are too weak, suppressing demand. There is also the inexcusable neglect of the Bronx–where the potential housing stock is–by Bloomberg.)

        1. I don’t see how the one follows the other, pretty much at all. Housing supplies could be equally tight and this would pose no conflict with the construction work being done by undocumented workers paid a pittance and accorded no rights.

          You could I suppose argue that by the unions keep the number of (employable) construction workers artificially low, thereby increasing the demand for their labor (and thus wages) and also reducing the amount of construction that happens. But you’d have to argue that this practice has been successfully maintained for decades, with the unions steadfastly refusing to increase enrollment despite existing demand for more of work than they can currently perform, at (nearly as) high wages. I find this very hard to believe.

        2. So, you’re asserting that there are large tracts of open land in the New York metropolitan area, zoned for residential construction, that are not being developed because union wages will make the effort unprofitable? Are you daft? Have you been to New York?

        3. Warren:
          I do argue that this practice has been successfully maintained for decades, with the unions steadfastly refusing to increase enrollment despite existing demand for more of work than they can currently perform. Have you been to New York? And what incentive do union incumbents have to expand the workforce, apart from providing for their younger relatives? (NY construction unions are rather, uh, pallidly complected.)

          Are you daft? Have you ever been to the Bronx? I agree that union wages are not limiting in Manhattan–there is plenty of rent for the unions to share with the developers and property sellers. But there’s a lot of NY outside of Manhattan.

          Fellow progs:
          Unions in the United States are too weak, except maybe for uniformed municipal workers. New York is not the United States. It is possible for unions to be too strong, although this has not been true in the United States in living memory. But I repeat: New York is not the United States.

          1. Ebbie — love that last para. I don’t know New York though, so, I have no opinion per se. But, Tamar Jacoby wrote a very interesting social history of integration/a.a., and where it went wrong, that relates to the pallid complection issue. I forget the name just now. It’s a kind of a Greek play type of thing. Couldn’t put it down. Did you ever read it? The past isn’t really past, as whoever that was, said.

  4. If these events were more common, then you’d likely see a far higher percentage of residents opting to move out. As is, they’re still quite rare, so it’s more worthwhile just to keep your house and re-build (although I agree with Other Brett that they ought to push them to build homes more resistant to flooding).

  5. It is very difficult for people to leave their land and start their lives on a fresh note. They have their sentimental values attached to it. Also the fact that coastal locations is one of the most beautiful ones to live at, only adds to the argument. So the authorities must try and find some alternative to make the area more protective against natural disasters. With such top-notch coastal engineering technology available, it does not seem very difficult to do so.

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