Disasters and Deregulation

(Originally published in The Chronicle of Higher Education, July 21, 2006)

From a statistical perspective, our nation’s recent hurricane problem comes down to a case of bad luck. Even though 32 major hurricanes developed in the North Atlantic from 1998 to 2003, only three reached the mainland in the United States. Then came two very active seasons that brought a record number of hurricanes. “We went from being very, very lucky to being very unlucky in 2004 and 2005,” Phil Klotzbach, of Colorado State University’s Tropical Meteorology Project, told The Times-Picayune. “Hopefully, we get back to being lucky again.”

A little luck is always a good thing, especially with another hurricane season now under way. But we can help load the dice in our favor by understanding what has gone wrong with the federal government’s approach to natural hazards.

To date the Katrina disaster has been presented in the news media as primarily a textbook example of failed Republican politics. If only President Bush had left the Federal Emergency Management Agency alone and not incorporated it into the Department of Homeland Security. If only he had appointed a FEMA director with experience in disaster preparedness. If only he had not slashed funds to strengthen the levees, then things would have gone better down South.

There is little doubt that the Bush administration badly mishandled the disaster. Nor can there be any question that concern with terrorism drained away resources and distracted political leaders from the threat of natural disasters. But ultimately our nation’s problem with such calamities goes back much further than the rise of Republicans to power in the 2000 election or the attacks of September 11, 2001. The dilemma stems from the deregulatory ethos that has dominated U.S. politics since 1980. That disregard for limits — be they on coastal development or storm-susceptible housing — is something that both Republicans and Democrats have conspired to bring about.

The ethos is part of a more general trend since the late 1970s toward a neoliberal agenda. As described by the geographer David Harvey in his recent A Brief History of Neoliberalism (Oxford University Press, 2005), neoliberalism involves “an institutional framework characterized by strong private property rights, free markets, and free trade.” It is a philosophy centered on nearly absolute economic freedom that flourished during the Reagan administration and, as the economist Joseph E. Stiglitz has pointed out in The Roaring Nineties (W.W. Norton, 2003), carried over into the Clinton era.

Consider, for example, the National Flood Insurance Program, established in 1968 and based on the idea that the federal government would help people in flood-prone locales insure their property. In return, local municipalities would enact regulations limiting land use in vulnerable areas and thereby reduce exposure to flood risk. Unfortunately, a 1983 General Accounting Office report revealed that FEMA — first charged with administering the program under Jimmy Carter — had failed to monitor state and local regulations.

A bipartisan assault on the program soon followed. What was once a requirement that local authorities adopt flood-plain rules became “the preferred approach” under the Reagan administration. The Clinton administration then abandoned land-use regulation entirely, drafting a new policy that sought to “encourage positive attitudes toward flood-plain management.”

Meanwhile FEMA allowed the maps defining flood zones to go out of date, a move that understated the risk of inundation and thus helped encourage coastal development in vulnerable areas. Back in the 1970s, mapping those areas subject to a 1-percent risk of annual flooding occurred every three to five years. But the deregulatory climate that began the following decade led to a lackadaisical attitude at FEMA’s cartography department.

By the time Hurricane Katrina struck, some of the flood-insurance maps were a full generation old. A map depicting part of Hancock County, Miss., for example, allowed homeowners to build some 10 feet below the elevation that an accurate estimate of a 100-year flood would have permitted — a disaster waiting to happen if ever there was one.

Sadly, the same deregulatory agenda also applied to vulnerable barrier islands. In 1982 the Coastal Barrier Resources Act set aside 186 units of dynamic barrier land and denied those areas federal support for bridges, water and sewer systems, and national flood insurance. The problem is that the law applied only to those barrier islands not yet developed. It also did not prevent people from using their own money to build on private land.

A 1992 report by the General Accounting Office found that two out of 10 federal agencies provided assistance to undeveloped barrier islands covered by the legislation. Indeed, the barrier-resources act has done virtually nothing to contain development on those high-risk land masses. It has no teeth because Democrats and Republicans both support strong property rights; neither group has had the backbone to rein in real-estate developers.

Nothing better demonstrates the lack of respect for rules than policy trends in governing the construction of mobile homes, a form of housing extremely prone to destruction from hurricane-force winds. Such manufactured homes — popular housing in the South — have been regulated by the Department of Housing and Urban Development since the 1970s. But the agency has fallen down on the job.

In the 1980s, engineers at Texas Tech University exposed flaws in the wind-design standards in the manufactured-housing code. That did not, however, stop dealers from selling as “hurricane resistive” mobile homes that could not withstand winds of more than 80 mph — just barely a Category 1 hurricane. HUD spent years ignoring the troubling evidence. It took Hurricane Andrew, which destroyed 97 percent of the mobile homes along the hurricane’s path in Dade County, Fla., or roughly 10,000 structures, to force the department, over objections from industry, to upgrade wind-safety standards. (The tougher wind code applies only to mobile homes built after 1994.)

Recent developments in mobile-home regulation are even more troubling. In 2000 President Bill Clinton signed the Manufactured Housing Improvement Act. The legislation further deregulated an industry that had never been stringently supervised. The law established a “consensus committee” of 21 voting members to interpret and revise mobile-home construction and safety standards — 11 members of the committee, a majority, were even allowed to have a “significant financial interest” in the very industry they are supposed to be regulating.

Unsurprisingly, only two weeks after Katrina ripped through the South, David Roberson, president and chief executive of Alabama-based Cavalier Homes Inc. and a representative of the Manufactured Housing Institute, a trade group, went to Congress to argue for suspending wind-safety standards. The idea was to facilitate the installation of mobile homes in areas affected by the storm — places that remain vulnerable to hurricanes.

Last spring FEMA issued a flood-insurance guideline requiring those New Orleans homeowners whose houses were more than 50 percent damaged by Hurricane Katrina to elevate rebuilt structures three feet off the ground. The three-foot figure seems arbitrary — though FEMA claims it is not — based less on hard science than faith in unrestrained real-estate development. Computer models reveal that even a Category 3 storm could inundate the city to a depth of more than 10 feet above sea level, and that’s assuming the levees hold. The lenient rule fits with the larger generation-long pattern that has come to define U.S. natural-hazards policy.

Although the gravity of the recent Katrina disaster inspired some members of Congress to put forth a tougher and more meaningful set of flood-insurance regulations, they found little support. Michael G. Oxley, an Ohio Republican, and Barney Frank, a Massachusetts Democrat, sponsored legislation in the House of Representatives that would have beefed up the federal program by including those areas subject annually to a fifth of a percent chance of flooding. Such a move would have expanded the areas deemed at risk to nearly the entire nation — floods, after all, have been recorded in all 50 states — and would have allowed the program to build up the necessary reserves for a future calamity on a par with what happened last August.

Developers have opposed such legislation because it would presumably increase construction costs. David L. Pressly Jr., of the National Association of Home Builders, told The New York Times that the flood-insurance program “may need a tune-up, but I don’t think it needs radical change.” Congress appears to agree. Instead of substantive reform, both chambers are considering bills that tinker with the flood-insurance program. The House version calls for increasing premiums on vacation homes and businesses and instructs the comptroller general to study the program, the latter move a favorite ploy by those seeking to stave off any truly meaningful environmental reform, as the history of studying global-warming policy attests. The Senate version is somewhat stronger, but it would do little to correct the federal government’s role in underwriting life on the edge of obliteration.

If we find mobile homes reduced to rubble and water 10 feet deep in the streets this summer, people ought not simply blame President Bush or his political appointees. The real problem is the bipartisan disregard for rules and limits that has made our nation’s approach to natural disaster so much like playing Russian roulette. With $7-trillion in insured property along the stretch from Texas to Maine, now is the time for more not less regulation of coastal development.