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The Community Rating System (CRS) program was implemented by the U.S. Federal Emergency Management Agency (FEMA) in 1990 as an optional program to encourage communities to voluntarily engage in flood mitigation initiatives. This article uses national census tract-level data from 1980 to 2010 to estimate whether CRS participation and flood risk affect a community's local patterns of population change. We employ an instrumental-variables strategy to address the potential endogeneity of CRS participation, based on community-scale demographic factors that predict when a tract’s host community joins the CRS. The results find significant effects of the CRS program and flood risk on population change. Taken together, the findings point to greater propensity for community-scale flood management in areas with more newcomers and programs such as CRS stabilizing population, though not especially in flood- prone areas. We observe the CRS neither displacing population toward lower-risk areas nor attracting more people to flood-prone areas.
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Benefits of and strategies to update premium rates in the US National Flood Insurance Program under climate change
Abstract The United States’ National Flood Insurance Program (NFIP) has accumulated over $20 billion in debt to the US Treasury since 2005, partly due to discounted premiums on homes in flood‐prone areas. To address this issue, FEMA introduced Risk Rating 2.0 in October 2021, which is able to assess and charge more accurate and equitable rates to homeowners. However, rates must be continually updated to account for increasing flood damage caused by sea level rise and more intense hurricanes due to climate change. This study proposes a strategy to adopt updated premium rates that account for climate change effects and address affordability and risk mitigation issues with a means‐tested voucher program. The strategy is tested in a coastal community, Ortley Beach, NJ, by projecting its future flood risk under sea level rise and storm intensification. Compared with using static rates for all the properties in Ortley Beach, the proposed strategy is shown to reduce the NFIP's potential losses to the community from 2020 to 2050 by half (from $4.6 million to $2.3 million), improve the community's flood resistance, and address affordability concerns. Sensitivity analysis of varying incomes, loan interest rates, and conditions for a voucher indicates that the strategy is feasible and effective under a wide range of scenarios. Thus, the proposed strategy can be applied to various communities along the US coastline as an effective way of updating risk‐based premiums while addressing affordability and resilience concerns.
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- Award ID(s):
- 1652448
- PAR ID:
- 10481169
- Publisher / Repository:
- Wiley
- Date Published:
- Journal Name:
- Risk Analysis
- Volume:
- 43
- Issue:
- 8
- ISSN:
- 0272-4332
- Page Range / eLocation ID:
- 1627 to 1640
- Format(s):
- Medium: X
- Sponsoring Org:
- National Science Foundation
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- Free Publicly Accessible Full Text
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Accepted Manuscript
- Journal Article:
- https://doi.org/10.1111/risa.14048
