Flood insurance: Can we afford to live on the sand?

Remember that childhood story, The Three Little Pigs, where the wolf huffed and puffed and blew away the houses built of sand and sticks?

It’s something of an allegory for those of us who’ve chosen to live and work on river banks, lake shores and seaside dunes. Ah, waterfront property. Two words that evoke daydreams and pump thousands of market value dollars into even a modest bungalow on the Jersey Shore, in the Keys, beside Lake Michigan or along the mighty Mississippi.

And, then along comes the big bad wolf. Think Hurricane Sandy or Katrina. Think Storm Surge Wilma in Key West in 2005. Pity old Henry Flagler whose railroad connected Key West to the mainland and fell apart forever in the 1935 hurricane.

Ought we allow any development in flood plains? Probably not. There’s not a lick of sense in building multistory high rises on a sand dune. Miami, Chicago and New York City come to mind, not to mention the bungalows of New Orleans and Key West. Even less sense in rebuilding it. But that dog done left the yard.

We are water-facing people and we pave over, build on top of and next to watersheds and flood plains. We plant a house and follow up with businesses to support it and entertain us. We look askance at the sprawl along the Outer Banks of North Carolina — and promptly rent a vacation home on the beach in September.

No one has the stomach for restoring the U.S. flood plains to pre-1492. It’s just not going to happen, so we best be exploring alternatives. For now, unfortunately, what we’re stuck with is federally subsidized flood insurance — and it’s broke.

In 2012, the U.S. Congress approved the Biggert-Waters Flood Insurance Reform Act, which was supposed to raise flood insurance rates high enough to replenish the National Flood Insurance Program. The federal government wanted out of the business of subsidizing flood insurance.

Then came the big “oops.” Oops, we had no idea how economically devastating those increases would be on home owners and businesses. So, after months of political wrangling, on March 21, President Barack Obama signed a relief bill that mitigates some of the rate increases built into Biggert-Waters.

Home owners who actually live in their flood plain homes will see their rates increase, but not at the staggering levels called for in Biggert-Waters. Instead of going up 25 percent per year for(almost)ever, they’ll increase a maximum of 18 percent annually.

Second home owners, businesses, houses of worship, not-for-profits and others, such as condos and rentals, remain on the 25-percent so-called glide path to full value premiums.

No matter how one computes it, if one has a mortgage on a property in a flood plain that requires insurance, the bills are headed up. Flood insurance premiums can climb from a few hundred to tens of thousands annually.

As they should, say the critics of federally subsidized insurance and many environmentalists. Build one’s house or business on sand? Next to water that big winds whip into monsters? Well, why should the rest of us pay for your folly?

(See previous paragraphs about the dog that left the yard for the answer).

Subsidized federal insurance is part of the solution. With last week’s relief bill, there are opportunities to find solutions that can protect the economic engines that line our shores, protect the home owner’s investment, while requiring equitable “skin in the game,” and protect the fragile environment.

But, if Obamacare dissonance becomes the script for national flood policies, we’re in for some very unpleasant political theater.

Linda Grist Cunningham is editor and proprietor of KeyWestWatch Media, a project management company. She lives in Key West (in house only a few feet about sea level and she pays for flood insurance even though it’s not required.)




Key West voters say “no” to study, cruise ships; time to put hard feelings aside for solutions

On Oct. 1, Key West thumbed its collective nose at cruise ships and turned its back on an almost $90 million annual revenue stream. By saying “no” to a feasibility and environmental impact study, voters made it clear: no study; no dredging; no widening; no cruise ships — and while you’re at it no tick-tacky passengers in T-shirts either.

At issue in the grinding, six-month long referendum campaign was whether Key West could eventually widen its channel, which lies within the Florida Keys Marine Sanctuary, to accommodate longer, modern cruise ships that are replacing the smaller, older (and less green) ones currently docking in Key West. Without a channel widening, the new ships can’t get into the harbor safely. Not today, or next year, but certainly within two decades, cruise ships won’t stop in Key West.

Now, not everyone who voted against doing a U.S. Army Corps of Engineers feasibility study on widening a mile-long segment of the main shipping channel by 150-feet did so for the same reasons. It was, as they say complicated. The 4,000-plus “no study” voters brought together a quintessentially Key West assortment of the cliched strange bedfellows.

Sincere environmentalists and the semi-unemployed. Wealthy (think rarer than the run-of-the-mill one percenter) second homeowners and political gadflies. Fans of exclusionary zoning and local small business owners. Retirees and energy company and investment executives. The “no study” vote carried every Key West neighborhood to a resounding defeat of the Chamber of Commerce-backed Support the Study political action committee.

Despite outspending its opposition significantly, the Support the Study PAC was unable to convince voters that doing the study did not automatically mean widening the channel. That was, however, the opposition’s message, often couched in hyperventilated advertising that included references to Italy, greedy business owners, dead sea turtles, fat, lazy tourists and the particularly offensive self-made video comparing those supporting the study to Nazis and Hitler.

I supported the study because I think the study would have, for $750,000, given Key West the information it needs to determine its environmental, economic and quality of life future. I think Key West will come to regret the decision to forgo the detailed, comprehensive research on which to craft its future. And, just to make it clear: My company did paid media consulting work for the support the study PAC.

But… Key West voters said no.

Hard feelings on both sides are apparent 10 days after the vote. But, unless the no voters can stop chortling “nah-nah-nah-nah” and the yes voters can stop eying them as careless, clueless pitchfork people, Key West is in for a long, slow economic decline.


Tuesday’s ballot box: Out with fan-folks; back to the middle

Americans are Bell Curve people. We live happily along that 80 percent bulge in the middle of things, and we’re open to learning new things from the strident fan-folks farther down the curve and out to its edges.

For a while. Not forever. Just about the time fan-folks think the rest of us have become their true believers, we say “that’s far enough; time for a deep breath.”

The middle needs fan-folks to get us moving, to introduce us to new ideas and concepts, to keep us from staying too long in one place. We need those extreme points of view to make us sit up and take notice.

Whether it’s the whacked-out Carrie Nation with her anti-alcohol, women’s and  families’ rights messages, or the deranged John Brown with his anti-slavery screeds, the far left and far right of the Bell Curve are the ones who make things change.

Those revered “founding fathers” were terrorists bent on overthrowing the legitimate government. The idea that society (read that government) ought to take care of children and old people came from the fringes, resulting in the now-sacrosanct Social Security and Medicare entitlements.

So, we need the Tea Party, far-right Republicans, flaming liberal Democrats and, yes, the Jello-like Occupy Wall Street. We also need Barack Obama’s sense of hope and call for change. And, we need the predictable confrontational clash that has been the United States’ dissonant symphony for the past three years.

If Tuesday’s election results are any indicator, and I think they are, then Middle America has gotten the messages, absorbed them, and is sending a message of its own: Enough. Enough of the fan-folks, hardline, confrontational, I-win-you-lose. Back to the middle where we can get something constructive done.

The New York Times editorial today calls it “back to common sense.”

Douglas Schoen, a political strategist and Fox News commentator, was nowhere near as accommodating, positioning himself on Tuesday ahead of voting, to warn that these kinds of results did not, in fact, mean collaborative heads would prevail. But this paragraph is worth noting because it makes my point that the middle is reasserting its power:

“In fact, that will almost certainly be something of a misreading of the results, as voters in Ohio are strongly supportive of efforts to curb excessive state spending and high levels of taxation, but they are equally skeptical of efforts to reign in unions– particularly through the elimination of collective bargaining rights.”

Yes, the middle can hold both those positions at the same time and search for a middle ground solution. It’s that middle ground on which the fan-folks on all sides can’t walk.

We’re not going to miraculously join hands this afternoon and sing “We are the World.” It will take another decade to pick and choose from among the “extreme” ideas of the past 10 years and adapt them to something quintessentially American.

But, for those who wondered if we’d ever return to less strident, less destructive, less polarizing discussion, the answer was in Tuesday’s ballot box. Yes, we will. Middle America is back in charge.

Friday Five (uh, Four): Weary of the D.C. dumb clucks

Friday Five: Odds and ends from the week’s world of news.

* That Super Committee that’s supposed to fix America’s fiscal house by Thanksgiving? Well, it’s not going to happen. Not because there are no solutions, but because its hardline  Republican and Democratic members have no intention of collaborating. Raise taxes; cut expenses. That simple. A pox on them all.

* The Gang of Six, Simpson-Bowles and the Grand Bargain. That Super Committee doesn’t even have to do the work. They can copy off the kids sitting next to them. There are two perfectly good blueprints ready for the picking, and there’s always the Obama-Boehner Grand Bargain that could be resurrected. I’m OK with copying off the smart guys.

* Jobs. Jobs. Jobs. And, while I’m on my compromise and collaborate rant, might as well toss in this one. Obama wants an infrastructure jobs bill to build roads and bridges. The GOP opposition doesn’t want to fund construction with a tax on 345,000 millionaires. The result? No jobs.

* President Herman Cain? Oh, please. As goofy as Donald Trump or (can’t resist) Sarah Palin. Though I might prefer President Palin to either of those guys. I know Cain’s not going to be on the top of the GOP ticket.  No way the party’s controllers, even the Tea peeps, are going to let that happen no matter what the polls say. Incumbent Obama would flatten the pizza guy and there’s no way the elephants will risk that. I’m practicing writing Hillary Clinton as my write-in candidate.

* And, because all that political news can make me crazy, let’s just end with Friday Four. No reason to ruin a perfectly beautiful fall day by obsessing over D.C. dumb clucks.

May God smile upon you and yours.

Friday Five: lessons in economics for Sunday dinner

Friday Five: If yours is a family inclined to Sunday dinner conversations, then you know there are a handful of subjects generally off the table: sex, religion, politics and money.

That leaves precious little about which to chat, except for the weather and your sibling’s awful spouse, that last one guaranteed to have someone leaving the room unpleasantly.

Inevitably one of those “no-no” topics slithers onto the table. Those are subjects about which everyone has an opinion — and about which most of us know little more than a couple headlines worth of facts.

This week has been bewildering for the economics-high-finance-challenged among us. In case you missed them, or just flat out didn’t bother since you were busy making your own ends meet, here’s this week’s Friday Five: lessons in economics.

All the better for that Sunday dinner.

* Capitalism good. Crony capitalism bad. Who knew?

* Bail out the Greeks? Sure. Italy? Not so much. I guess they like Greeks better than Italians. The seat-of-your-econ-chair agreement that was two-years give or take a couple months in the making appears to be an outline with not much in the way of details. Now the hard work begins.

* The U.S. economy grew more than all those ugly August and September “oh, lands, a double dip is inevitable” talking heads bloviated upon. I swear, if we  could muzzle 24-7 “news” channels and talk radio, the world would be less stressful place and we might actually get some traction on getting things done. But, that would be unkind to the First Amendment, so tune out the cacophony.

* Are those Occupy Wall Street people “half naked, over-educated, children of the privileged, preening Socialists” or just regular Americans annoyed with what they perceive as “take from the poor and give to the rich” a sort of backwards Robin Hood thing? Probably both and more since few things — including economics and politics — are so either-or. Good to see the First Amendment flexing its muscles, too.

* And, then there’s 9-9-9 and similar plans from enthusiastic presidential candidates that start with “now, this won’t hurt a bit and we’ll be healthy, wealthy and wise to boot.” Sigh. Getting our fiscal house in order requires pain: raise revenue; cut expenses. Eat less; exercise more.

And, that comes from an original flat-tax kinda fan, folks. Steve Forbes and Bill Bradley, two New Jersey boys, did that song-and-dance back in the 1980s when I was editor at the Trenton (NJ) Times. I got to hear the original version.

And, there you have it. Economics and high finance lessons for the weekend dinner table or wherever your conversations lead you. May God smile upon you and yours.

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