Americans with homes that are repeatedly flooded by extreme weather events could soon have the federal government buy their houses under a new bill introduced Thursday by Rep. Sean Casten (D-Ill.), The Hill reported. The bill would allow the National Flood Insurance Program (NFIP), the federal flood insurer of last resort, to buy houses and zones deemed indefensible in lieu of continually paying to repair them. “You’re not obligating people to move, but you’re saying like, you know … if you want to avail yourself with the NFIP program, we’re going to structure it toward a buyout rather than rebuilding,” Casten said. Casten, who worked on the bill with Rep. Earl Blumenauer (D-Ore.), says it aims to solve two problems: one serious, the other potentially catastrophic. More immediately, there’s looming the risk of bankruptcy of the NFIP, which is straining under the weight of ever more frequent and severe flood events. Congress paid $16 billion to bail the program out in 2018, and Congress proposed another $20 billion in 2021. That problem is only growing. Flood damage could rise more than 25 percent by 2050, putting an additional $8 billion at risk. And 14.6 million homes are at “substantial” risk of flooding, according to data from nonprofit First Street. Large investors like Blackstone and Bank of America and reinsurers like Swiss Re carry out their own quiet retreat from endangered lowland and coastal properties, while selling off those properties to less savvy investors — and counting on the NFIP to serve as a free backstop, Casten added. That creates the potential for a domino cascade of bankruptcies analogous to the Savings and Loan Crisis of the 1980s, which saw community banks and pension funds wiped out across the country. “You’re not seeing the Blackstones come in and buy,” Casten said. Flood-prone properties are instead getting spun off to groups like “you know, the local Cleveland, Ohio, firefighters pension fund.”
