Friends and relatives in Nebraska sent links to the floods they’re currently experiencing. The people we know are lucky enough to have homes that are just slightly above the icy waters, but many of their neighbors are inundated and the cattle are dying in large numbers. There are serious questions about whether or not many family farms and small businesses will survive financially given their already stressed and precarious condition.
Another friend in Iowa described the floods there and how he’s constantly preoccupied with the potential damage the next one might cause. His family business was destroyed in a 2008 flood and the flood of 2016 came very close to damaging his new building which was intentionally chosen because it’s on higher ground.
Meanwhile here in northern California we were just hit with unusually bad floods as heavy rains pushed rivers over their banks and on to already saturated territory. California’s Mediterranean climate has long periods of drought, but when the rains finally return it’s too much all at once. These photos show the water as it gradually recedes, but just last week the adjacent roads were underwater. This flood comes on the heals of two years of record breaking forest fires. Drought and fire intensify the effects of flooding by making the sunbaked earth too hard to absorb water and by destabilizing hillsides causing mudslides.
There are numerous towns in the region, including Guerneville pictured above, that were built in spots that have flooded repeatedly for over a century. It’s nothing new. These towns are too close to the river, too low in the valley, and fundamentally too vulnerable in a way that can’t easily be fixed. Absolutely none of this is good for business or the local tax base. Without continual financial assistance from state and federal agencies few of these towns would be able to repair their own public infrastructure – not the roads and bridges, not the water supply systems, not sewerage treatment plants. It’s all structurally dependent on outside funding. A cursory glance at state and federal budgets suggests a reckoning at some point in the not-too-distance future. Natural disasters are merely the cherry on top of an already functionally insolvent cake.
Meanwhile private insurance companies are recalculating the increasing risks of too many structures in harm’s way of too many potential problems. A random house fire is a rare event that the industry can absorb. But when thousands of homes all burn in a single massive event – and when these events recur and intensify – that’s a problem that threatens the system. They’re limiting their exposure by tightening up their requirements for coverage, raising premiums, increasing deductibles, and cancelling policies.
The federal government’s flood insurance program has been insolvent and dependent on supplemental congressional funding since Hurricane Katrina in 2005. The National Flood Insurance Program was set back even further after Superstorm Sandy in 2012 and Hurricanes Harvey and Irma in 2017. Consequently congress has been attempting to change the parameters of what FEMA and NFIP will and won’t cover in what it calls Risk Rating 2.0 based on the actual risks of each property rather than theoretical and outdated generic 100 year flood maps.
The banking and real estate lobbies are pushing back hard against these changes. If you don’t have (or can’t afford) insurance you can’t get a mortgage or refinance a property. As insurance rates rise the value of property tends to decline – partly due to the increased cost of home ownership, but also because high insurance rates send a signal to would-be buyers that the property is in a high risk location. To be clear, that’s exactly what the insurance industry is meant to do – assess and price risk. What banks and real estate agents (and many local municipal authorities) want is to artificially reduce the appearance of risk and then pass the costs of damage on to someone else by way of FEMA and NFIP. In the end the fires and floods will win as everyone involved goes broke trying to defend property and infrastructure that can’t reasonably be defended.
One side effect is that properties that are inherently safer due to better quality construction and more secure locations are rising in value and/or owned by people with more personal resources. Lesser properties in harm’s way have slid down the food chain and become poorly maintained rentals. There’s no rational justification for major renovations of a modest building if the next flood will wipe it all away again. Yet these rentals are often very expensive relative to local incomes in a housing market that’s already highly constrained for other reasons.
Back in 2012 a new retail development was built adjacent to the historic downtown of Sebastopol in an area that had previously been a semi abandoned warehouse district. I wrote about The Barlow some years ago. I actually really like the place. It was known from the beginning that this part of town is subject to flooding since it sits right up against the Laguna de Santa Rosa which expands and contracts with the seasons. Some years are wetter than others. Mitigation strategies were put in place as the twelve acre complex was planned and built. Waterproof barriers were designed to fit into each of the shops and pumps were installed to keep rising waters under control.
Unfortunately these were active systems that required people to take preventive steps ahead of a flood. Equipment had to be pulled out of storage and personnel needed to be mobilized. The official municipal-approved emergency plan was for fifty employees to erect the flood barriers over twelve hours. (The Barlow management doesn’t have anything close to fifty employees.) Since there’s no way to be certain if any given storm will cause a flood or not decisions have to be taken as to when – or if – it’s appropriate to spring into action. In this case it was too little too late. That’s not a criticism of the management at The Barlow so much as a general statement of human nature and the fact that passive systems – like building on higher ground or elevating the structures – leave more wiggle room for error.
Once the flood hit the management was suddenly very keen to respond with all manner of clean up crews and specialty equipment. Even with insurance that covers the building exteriors and structural envelopes this is going to hurt financially. The health inspector has declared that everything below the four foot mark must be removed and replaced since the flood water was tainted by raw sewerage. The loss of reputation as well as the expectation that there will be more floods in the future are long term problems that will need to be addressed. Rents might have to be lowered or expensive retrofits might need to be put in place. And the cost of insurance will only rise.
About half the shops at The Barlow were elevated just enough to avoid the high water and they’re still in business. But when the other half of the attractions are shut down with many unlikely to reopen due to the financial hit they endured the entire complex may be less successful moving forward. It’s unclear who might be willing to rent these vacant spaces in the future under the circumstances.
Shopkeepers were asked why they didn’t have flood insurance. It was no secret that the buildings were in a flood plain. They responded that the cost of insurance was higher than they could reasonably afford. This was coupled with policies that strictly limited what would and would not be covered that didn’t come close to the cost of merchandise and equipment. The insurance industry evidently priced this particular risk correctly.
A bland 1980s era office park on the same road was built on slightly higher ground. Whether this was a naturally occurring bump in the landscape or an artificially constructed platform is unclear to me. But it kept the buildings dry. Compare that to The Barlow directly across the street. I’m not sure if building up the soil on low lying areas near a protected wetland is even possible under current environmental rules. And the cost of terraforming and the associated infrastructure might not pencil out. And since this is essentially a shopping mall there are design elements that do and don’t work. An entire streetscape lined with shops that are all half a story above the ground simply don’t perform as well as those that are level with the sidewalk.
This all takes me back to the ways in which local governments interact with private commercial interests and the voting public to deliver new development. The original plan for The Barlow was for apartments and condos to go above the shops. This would have added to the historic Main Street fabric of the town. But the authorities said no. The municipal government desperately needs more tax revenue and jobs. They absolutely don’t want new full time residents who will burden the town with additional needs. And existing home owners don’t want more people moving in either. (See also: lack of available housing stock and insanely high rents. That’s a feature, not a bug.) At the moment there’s a vacant patch of land next to The Barlow that has already been approved for a luxury hotel and spa complex. Tax revenue and jobs. No housing. I’ll be curious if the design of the project is altered as a result of this flood.
Do additional residents really cost a municipality that much money if those folks are living on redeveloped land, and no new roads are required? I would suspect that condos wouldn’t add too many kids, and given the compactness of the redevelopment, no additional spending on cops or firefighters would be necessary. What am I missing about the cost/benefit analysis?
Municipalities are all broke. The margins aren’t thin. They’re negative…
I guess I still don’t understand what’s special about California such that residential/commercial redevelopment is a net negative for the municipality financially. Where I live, municipalities are seeking developers to build that sort of retail/office/condo developments precisely because those sorts of developments do have a net positive contribution to the municipalities budget. They are also seeking out retirement and nursing homes as well (dense housing and jobs rolled into one). What is different about Northern California such that the financial implications are different than in the Research Triangle, NC? Is it schools or transit costs that are borne by municipalities, instead of at a county or metro wide level?
On the topic of Malibu…the homeowners insurance claims in Southern California are heavily lopsided in favor of the toniest precincts: houses in the hills up against the greenbelt, or in landslide/flood/cliff zones by the beach. Most homeowners in SoCal never will file a claim. These neighborhoods are on a once a decade pace. Two subsidies: first ratepayer then taxpayer through disaster relief. Remarkably, no political pushback on this.
Another interesting aspect of the city abandoning the Northeast Area Plan which would have rezoned The Barlow area to allow the mix of uses you describe was that part of the plan would have required the buildings to be built on podiums, above the flood level. The road running through the center of The Barlow would have been similarly raised so the sidewalk would be at the same level as the ‘ground floor’ retail. This would also have allowed a massive amount of parking below the podium (no more complaints about not being able to find a parking space). And cars are easy to move when Laguna waters rise. But as you state, the prospect of up to 300 more housing units in town, and 4-story buildings (god forbid!) was too much for vocal opponents and they scared the council into voting down the plan. So we got The Barlow that complied with the zoning code but left everything in the path of flood waters…
Yep.
Here’s what I see unfolding over the long term – and the long term might be sometime after you and I are both dead. The current crop of over built vacant strip malls and office parks could be repurposed as housing someday. That sounds weird to a lot of people, but run down miserable industrial warehouses gradually transformed into luxury lofts in many places.
The rules and culture that we have now can and will change – eventually. The driver of that transformation will likely be generational in nature. The old folks will die off and young people with different goals gradually assume positions of authority. What drives generational change? Pain and loss combined with hope and aspirations.
I’m wondering what kind of losses our midwestern banks are exposed to. When we hear about federal funds going there to “help”, I suppose they’ll be helping people keep up with their debt payments… helping the banks indirectly.
At some point, we’ll have to accept the fact the our population can’t grow forever. We’re already crowding into marginally safe real-estate, because the good spots are taken, and/or developing good farmland into acres of grass and asphalt. Some day, that has to stop.
You’re making the assumption that federal aid is designed to help farmers and the banks are just the vector. It’s the other way around. The banks are being saved and the farmers are the vector.
Here’s a parallel example. I was in Pripyat in the Ukraine (Chernobyl) and a French guy I was traveling with was complaining bitterly about all the French money that was spent on the clean up operation at the nuclear plant. I let him vent for a while. Then I spoke up. The French money never left France. The French government presented the money to Ukraine on paper, but it was all spent in France on French workers and French equipment that just happened to be deployed in Ukraine. It was really a make-work program for the French. The Ukrainian employees were the cafeteria ladies and the people who cut the grass around the plant.
Re: population
The US has a fertility rate of 1.8 children per woman. The replacement rate is 2.1. Without immigration (I have no particular opinion on the subject) the US would not only be rapidly aging but also shrinking in population.
Canada is at 1.6
Mexico is at 2.18 and dropping fast.
Brazil 2.08 and falling
Thailand 1.48
Vietnam 1.95
Iran 1.6
Japan 1.4
Russia 1.7
South Korea 0.96
China 1.62
In other words the population of every rich and moderate income country is falling and they will continue to contract for the rest of this century. Europe and parts of Asia are on schedule to drop by half over the coming decades.
On the other hand there are the poorest countries.
Nigeria 5.67
Niger 7.31
Congo 5.92
Kenya 3.74
Ghana 3.87
Afghanistan 4.33
Egypt 3.15
Pakistan 3.48
Overall Africa’s population will double from one billion to two billion by the end of the century. A few regions in the near east and south Asia will also grow.
The most respected forecasts show the human population as a whole will peak around 2050 at 9 billion+/- and then enter a relentless decline.
So we’re rapidly heading toward a world of old semi-prosperous people and young desperate people. In theory these two groups need each other and could solve each other’s problems. But that’s not looking like the most likely trajectory.
Much of the prosperity of older people is based in land holdings. Much of the desperation in young people you reference is rooted in landlessness. Nature provides an easy quid pro quo for this. It’s happened before, in the populating of the Frontier.
Don’t we also have to consider infant mortality, deaths in childbirth, and average lifespan in those high-birth countries?
Yes we do. But these high birth countries are in the “demographic transition.” There’s just enough food and medicine to keep most of the children alive to maturity, but not enough of an economy to allow them to thrive.
Poor people have large families first because women have less access to birth control, education, and fewer opportunities to earn their own money. Second, children are an insurance policy for old age since the social safety net doesn’t really exist. Rural children are also a source of free labor, whereas middle class city kids are expensive to maintain.
Yes. Several generations before social security, my 19th-century immigrant farmer ancestors had 13 children. My great-grandparents on the other side, also subsistence farmers, had 12. But today, on either side, only one of my first cousins has as many as three, and the rest of us with kids have two or fewer. At least four of the 13 females in my generation don’t have any children. No one is a farmer, though one cousin owns the last remnant of the family farmstead and rents it out.
It is a bit heartless and cynical to say, but wars have always been one way of controlling population growth in less-wealthy countries and regions. It is not surprising that today’s insurgencies and hot conflicts are in some of those places you noted with high birth rates.
My Great-grandparents were Sicilian peasants who came to America from Agrigento a century ago. They had ten children – and those were the live births. There were miscarriages in between. My great-grandmother was pregnant from the time she was married as a teenager until she died at age 39.
“…high insurance rates send a signal to would-be buyers that the property is in a high risk location.”
Got news for ya; the whole planet is a high risk location – seems we’ve elected to ignore that – especially flood plain areas, which should be verboten to development.
I’ve driven through Guerneville a number of times over the years and have always thought, ‘what a cute and beautifully stupid place to build anything’.
Just sayin’…
You’ve hit on the nature of the problem. Since everyplace has some kind of risk – some potentially catastrophic – how should these risks be managed? Forbidding development in flood plains, earthquake zones, areas afflicted by hurricanes and tornados, places near forest fires… is tricky.
Partly we have huge cities that have already been built in bad spots. San Francisco really shouldn’t be here. Miami is ultimately doomed. Houston is a slow motion train wreck. New Orleans? Ouch. But I don’t see anyone abandoning these places anytime soon.
And partly the new places we need can’t all be constructed in the handful of locations where the risks are considered minimal. We need new buildings where we need them, not where they “should” go.
Rational urban planning is a political can of worms. “You can’t rebuild in Malibu because the entire place is a massive fire and erosion zone that can’t be defended and should revert to nature.” Run that by the voting public and see how it goes.
Strict building codes that result in structures that resist fire, flood, earthquakes, tornados, etc will drive up the price of construction. People value fancy kitchens and baths and raw square footage far more than structural engineering. There’s always pushback against the Nanny State.
So in the end it’s the insurance industry that will do all the heavy lifting using price signals. “Over here insurance is reasonable. Over there we’ve redlined the entire community. This building is affordable to insure and that one is prohibitively expensive.”
“There’s always pushback against the Nanny State.”
Followed by demands for assistance.
For awhile back in the ’60’s I was in charge of subdivision intake review at the Portland (OR) so-called Bureau of Planning. One day a guy submitted a development plan for a steep slope area just south of downtown that had never been built on because it was prone to landslides. Even though we had no real subdivision ordinance at the time, we operated with ‘guidelines’ from the city engineer which,among other things, required his review of development on slopes of more than 8% (allegedly because that was the steepest grade a firetruck could negotiate). I told the guy that he’d have to get the CE’s stamp on his application before I could take it in. He exploded with the usual litany that it was his property and neither I (me) nor the CE could tell him what to do with it. Being a young smart-ass at the time, I said something to the effect that the area was full of evidence of historic landslides and that all I was trying to do was prevent him from being sued by the people below his property after his structures ended up in their living rooms. He left in a huff and never submitted the application as far as I know – but I’d wager the parcel has been developed since.
Live in Maine and you are entirely right about heating in cold places. It can’t be overlooked. Our area gets cold enough for someone to freeze to death even inside their house if they don’t have heat. That period can last a long time up to 4 months. We have propane heating/hot water system but it needs, as you say, electricity and has lots of complexities. We are off grid solar so regular heat works about 95% of the time, not enough for comfort. A nearly fail safe back up heat source like wood is absolutely essential. We also have a road association that unless we all go down together, isn’t likely to let anyone actually die in an emergency. That said we are all on a wet meadow that floods every 500 or so years. A 500 year flood would put lots of houses underwater and bring the water right up to my doorstep, but probably not inside.
Here in Louisville some businesses preemptively flood their establishments with clean water so the pressure keeps out sediment-filled river water making cleanup easier.
Many people have fled the Bay Area to Sacramentofor cheaper housing. Large parts of the city, such as the newer area of Natomas, are natural flood plain below even the normal river level. Hope those levees hold because that’s the last redoubt of California’s middle class.
Long term, we might do well to adopt a European model. For the Dutch, levee building is part of their culture. Other cities like London, Paris and Florence simply have massive stone walls, built up over centuries, to contain flood events on the Thames, Seine and Arno respectively. That has worked up until now, but climate change is testing previous assumptions.
“Other cities like London, Paris and Florence simply have massive stone walls, built up over centuries, to contain flood events on the Thames, Seine and Arno respectively.”
Huh? The Thames Barrier was a massive project, completed in 1982:
https://en.wikipedia.org/wiki/Thames_Barrier
I know of a guy who invests in mobile home parks in the Midwest. Smaller ones – say, 50 spaces. Affordable worker housing. Says he does not worry about tornadoes (the chances are low, and besides, even if the trailers get blown off the map (which has happened once) FEMA just comes in and makes it rain. They give each one of the 50 residents $30,000 to buy a new one. That’s not even a rounding error – or, expressed another way, equivalent to ONE single family home in Livermore.
He deliberately avoids hurricane surge/flood zones however. Destruction is too widespread. Takes forever for FEMA to adequately respond to such massive damage, and all the while his cash flow has dropped to zero.
Meanwhile, the lands to the WEST of the San Andreas fault creep northward, at a rate – get this – about the same as your fingernails grow. (@ 3 inches a year). Though if you add that up over 10 or 15 decades…..
It will be interesting to see where the next “when” (not “if”) hits. Someplace like Salinas would be bad if you lived in Salinas, but not overwhelmingly devastating to the state’s economy. Consider that a dodged bullet. Closer to SF, SJ or down near LA, on the other hand, and it could shatter the insurance and financial markets and lay a massive body blow to tech.
We’re on the same page. I had a conversation with a friend who just bought a multi-million dollar house here in San Francisco. She has the money and enjoys the lifestyle. It’s a great house.
When I mentioned that we might be in another bubble she shrugged it off. For the last forty years – even with ups and downs – the market just keeps going up. I suggested that’s exactly what the top of a massive bubble looks like. She rolled her eyes. (Subtext: lighten the fuck up.)
Then I mention the earthquake thing. It’s not merely the risk that your home will be damaged. (No one I know has earthquake insurance because it’s insanely expensive and doesn’t actually cover the cost of rebuilding when you read the fine print.) Instead the primary risk is that the industries that undergird the region’s economy are easily relocated since every tech company I know has branch offices in other states and countries. Sliding work around is already a huge part of what they do. The analog is Detroit and the auto industry. Little by little – then all at once – production migrated elsewhere until Detroit was a husk. It’s unthinkable at the peak, but completely obvious after it has happened.
First time commenter, long time reader (came here via Strong Towns).
Great post.
My Canadian municipality (used to be a county with towns and rural areas each having their own administration, now an amalgamated muni – combine services to cut costs, uh huh) is undergoing a surge in new home building in the largest city. Almost all of the new homes are being built in what I understand is a flood plain. The muni is OK with this as long as the homes must be built above what I understand is the level of the highest flood on record. The record goes back a trifling ~150 years. So the homes are built on mounds around 1/2 meter above grade. So the houses might be OK against the next big one.
The utilities – roads, water/wastewater, gas, and I believe hydro (excuse me, electric) – are all at or below grade. So the infrastructure serving the houses might not. The muni would depend on the province and/or the feds for a bail-out. Which would probably be possible for a few decades. After that, who knows?
My spouse and I live in a small town within the muni. Our house sits on the high bank (about 12 feet above normal water) of the river flowing through town. There’s no record of flooding on our bank . . . not to say that’s never happened. We do have several days of water, what’s in the water heater, and a backpacking grade filter if the filtration plant was flooded. Also have a plan to deal with our pee and poop. And we have a plan for how, when to leave if necessary.
Canadians have the extra problem of keeping warm if the public infrastructure fails. A few days without heat in January in Saskatoon or Ottawa is enough to kill frail people. -20C is no joke for the elderly and small children. Gas heaters are fine, but many require electricity to run fans. And now that computers run everything there’s an additional layer of complexity to deal with. Of course Canada has a more cohesive culture than the US. That goes a long way in a crisis.
I’m a longtime reader and really enjoy your blog.
Here’s a great condensed story I saw on BBC today on why civilizations collapse historically. (climate change, inequality, complexity, and random events are mentioned). Thought you and your readers might enjoy:
http://www.bbc.com/future/story/20190218-are-we-on-the-road-to-civilisation-collapse
Keep up the good work, Johnny.