THE FEDERAL Emergency Management Agency said last week that it has run out of money to pay insurance claims from this year's hurricanes. Not counting Wilma, the claims top $22 billion. So you'd think the troubled agency would be eager to reduce future disaster damage.
FOR THE RECORD:
FEMA: A Nov. 20 Current article about building on U.S. coasts stated that the Federal Emergency Management Agency launched the 1968 National Flood Insurance Program. FEMA was created in 1979 and now manages the program, which was originally administered by the Department of Housing and Urban Development.

Apparently not. By cavalierly shoveling taxpayer money into insurance for development in high-risk coastal areas — areas the private insurance industry has long since abandoned — the agency is assuring that future hurricanes again do the sort of damage Katrina inflicted on the Gulf Coast. Meanwhile, FEMA's willingness to insure property in places that are hurricane magnets is driving a coastal development boom that is destroying the fragile dunes, wetlands and marshes that act as the nurseries, filters and storm barriers of our living seas.

In the 1980s, 17 of the nation's 20 fastest-growing counties were coastal. Towns such as Biloxi and Gulfport, Miss., Dauphin Island and Gulfshores, Ala., and North Captiva, Fla., exploded with floating casinos, condos, stilt homes, beach mansions, marinas and shopping malls just waiting to be knocked down when hurricanes began increasing in intensity in the 1990s.

Dauphin Island, Ala., reminds me of Key West when I was a kid: a relaxed place without a lot of commercial distractions from the magic of its open sky and rainbow-streaked waters.

I first visited there five years ago to interview Dr. George Crozier, director of the Dauphin Island Sea Lab. Fourteen miles long by 1.5 miles at its widest, with about 2,000 winter residents and as many as 15,000 summer visitors, Dauphin Island has been repeatedly hit and reshaped by tropical hurricanes, including Frederick in 1979, Danny in 1997, George in 1998, Ivan in 2004 and Dennis, Katrina and Wilma in 2005.

From the water, the island's narrow west end looks like a forest of wooden stilts atop which several hundred houses have been temporarily secured. The storm-eroded sand has retreated under their pilings, and you could fish off the decks of many of them. After Hurricane George, FEMA spent millions of tax dollars to protect the single road to the area, but without requiring any additional public access to what's left of the beach.

In 2004, Hurricane Ivan delivered Dauphin a glancing blow, destroying 50 west-end homes and badly damaging another 100, leaving a rubble of wooden debris, grounded boats and two new ocean channels in its wake. Yet again, FEMA returned to help vacation-rental developers rebuild in harm's way.

On this visit to Dauphin, after Hurricane Katrina, there are more than 200 west-end homes destroyed (many of whose owners are collecting their FEMA insurance checks from last year), and also a new visitor to the area: the massive oil rig Ocean Warwick, grounded in the surf. Crozier and I pass through a police roadblock and hike down the beach amid an apocalyptic scene of broken and vanished stilt houses, downed power lines, flooded roads, buried cars and shallow quicksand. A $1.1-million protective sand berm built by FEMA after last year's hurricane has also vanished into the sea.

"The rush to rebuild is understandable. It's basic human sympathy," Crozier says, "but we have to build in a different way."

In 1968, FEMA, worried about the disaster risks faced by new beachfront residents, came up with a plan. If homeowners met certain basic safety standards in beachfront construction (like putting houses on stilts), they would qualify for a newly created National Flood Insurance Program. FEMA convinced Congress that this would reduce individual risk while shifting the burden of hurricane disaster relief onto policyholders. It would guarantee a large insurance pool by making the rates so inexpensive that lots of people would buy the policies.

This idea worked for a while — about as long as a historic lull in Atlantic hurricane activity persisted through the 1970s and 1980s. But since the early 1990s, this natural 25- to 30-year cycle has both intensified and — possibly — become supercharged by fossil fuel-fired climate disruption that's heated the world's oceans and raised sea levels more than a foot. As soon as hurricanes Hugo, Andrew, George, Fran, Floyd, Isabel, Charley, Frances, Ivan, Jeanne, Dennis, Katrina and Rita started coming ashore, the program turned into a money loser and the largest financial exposure the federal government now faces. FEMA had insured more than $763 billion worth of property against flooding, with more than half of that in the Gulf region (42% in low-lying, hurricane-prone Florida).

Until the government started selling flood insurance, it was almost impossible to insure coastal floodplain property against the inevitability of storm surge. As a result, most bankers refused to issue mortgages, so beachfront homeowners had to pay cash and tended not to build bigger than they could afford to lose. But once the feds started offering insurance, real estate developers found mortgage bankers more than willing to lend them money, setting off a tsunami of new coastal construction.

Federal flood insurance covers up to $250,000 for property damage to homes and $500,000 for businesses. Storm-battered beach communities are also eligible for low-interest small-business loans; federally funded reconstruction of highways, roads and bridges (like the $32-million causeway linking Dauphin Island to the mainland) and beach replenishment courtesy of the Army Corps of Engineers.

"The problem is the government won't operate like a business. It won't cancel policies or increase premiums when a house is destroyed like a real company would," complained Steve Ellis, a maritime specialist with the Washington-based Taxpayers for Common Sense. "Erosion and sea-level rise aren't even factored into their rates." Yet a report published by FEMA predicts that one out of four U.S. homes built within 500 feet of the ocean will be destroyed in the next 45 years by erosion and storm surge.

FEMA insurance has also allowed policyholders to make repeat claims, encouraging people to rebuild in harm's way.

As early as 1982, Congress began to see the folly of promoting dangerous coastal development and passed the Coastal Barriers Resources Act. The act excludes about 3.1 million acres of flood-prone, undeveloped barrier islands, mangrove swamps and sand spits from federal subsidies. This does not mean that property owners in these areas can't develop their land, only that they can't bring in Uncle Sam as their real estate partner.

Having passed some good legislation, Congress quickly went to work tampering with it. Beginning with the 104th Congress, the House and Senate have passed dozens of "technical corrections" to the act in order to remove constituents' properties from these subsidy-free zones. Typically, in the final days before the 1999 Thanksgiving break, Congress rushed through a number of technical corrections restoring federal subsidies to properties in Delaware, North Carolina and Florida's North Captiva Island, one of the wealthiest ZIP Codes in the United States.

The changes were requested by, among others, then-Rep. Porter Goss of Florida. In 2004, just weeks before Hurricane Charley cut North Captiva in two, Goss would be named by President Bush to head the CIA. If nothing else, Goss' efforts on behalf of his wealthy constituents showed that he knew how to act covertly.

Even as Katrina came ashore in late August there were — and are — four more bills in the House and Senate to restore federal real estate subsidies to more than 50,000 acres of high-risk lands and waters in Georgia, on the Florida Panhandle and in Texas just north of Los Padres National Seashore. Sponsors include Reps. Allen Boyd and Jeff Miller of Florida (one Democrat, one Republican), Rep. Jack Kingston of Georgia (a Republican) and Rep. Solomon Ortiz (a Democrat) and Sen. Kay Bailey Hutchison (a Republican) of Texas.

Apparently, when it comes to helping out the damp and the rich, bipartisanship still flourishes in Washington.

In the wake of Katrina, critics from across the political spectrum (Taxpayers for Common Sense, the National Wildlife Federation, the Competitive Enterprise Institute) are questioning why the federal government is in the high-risk insurance game, especially when better models for coastal development exist — models that don't destroy property, kill people or ruin lives.