'The Geography of Risk' Warns $3 Trillion Is At Stake With Climate Change. And We All Pay.

Nov 20, 2019

In his new book, "The Geography of Risk: Epic Storms, Rising Seas, and the Cost of America's Coast," Pulitzer-prize winning author Gilbert Gaul takes a look at the U.S. history of coastal development since World War II - and finds a recipe for disaster.

By his calculations, poor planning and government aid have put nearly $3 trillion dollars in property on a collision course with climate change.

Gaul is a former reporter for the Washington Post and the New York Times. He won his first Pulitzer at 27 uncovering mob connections in the Pennsylvania coal industry while working for a small daily newspaper. He won a second Pulitzer 11 years later examining America’s blood brokers.

He spoke with WLRN’s Jenny Staletovich this week. Gaul will appear at the Miami Book Fair at 1:30 p.m. Sunday to talk about climate with author Michael Klare, David Wallace Wells, Nathaniel Rich and Michael Grunwald. The following is an edited version of the interview.

STALETOVICH: I want to first ask you about is the title of the book, “The Geography of Risk.” Where does that come from?

GAUL: You know I had another title. Originally I was calling it “The Vanishing Shore,” which I liked because it had some nice overtones. But I had, at one point I had come up with “The Geography of Risk,” and honestly, I don't remember exactly where it came from. It was just something I thought of one day, because I'm fascinated by the notion of risk at the coast. And my editor like that better. So we ended up going with the geography of risk.

In your reporting, you went back and started at the beginning with coastal development. You use Long Island as an example. Down here in South Florida and Miami Beach, I saw a lot of similarities. Can you talk a little bit about what you found when you went back and traced the evolution. One of the builders said, "Money beats the ocean." What did he mean and what did you find out?

When I started this project, it's something that's been in the back of my head for a long time, really for decades and decades. Because I'm a coast guy, a beach guy, I literally watched the changes at the coast. I was fascinated by it as everything got bigger, wealthier and more expensive and more exclusive. I know the implications that went along with that. But I also was interested in this issue of risk - what happens when a hurricane slams into a place like Miami or Miami Beach, or, in our case, the middle Atlantic coast with Sandy in October of 2012.

What I saw after the storm was disturbing in the sense of how the narrative was driven by the notion of rebuilding as quickly as we can, as opposed to stepping back and thinking about, okay, what just happened? Why did it happen? And what do we want to do going forward? How do we want to reimagine our lives living with water in the future and in age of climate change and sea level rise and bigger storms and all that. But in order to do that, I decided that it was was really important to tell the story of the modern coast.

What I mean by that is, if you think about the coast, there have always been people who have been at the coast, from Native Americans to wealthy tycoons who could afford to put a Victorian down in Cape May or Asbury Park. Then in the in the early 20s, Miami, of course, began to develop. And there was the original land rush in Florida during that time. And then Flagler built his railroad down to the Keys.

I wanted to tell the story of what happened after World War II, because when you look at the data you see that there's this momentous change. And it's a change not only in literally what happens at the coast, lots of property, but in the way we think about the coast. We developed this notion of second homes at the coast. And it really begins after World War II when the economy's booming, and there's lots of money available. People have been sacrificing for over a decade, and now they want to indulge themselves and one of the ways they do it is by buying a second home or building a second home at the coast.

So I wanted to tell that story. And I decided to tell that story through a barrier island here in New Jersey called Long Beach Island. I've been going to it for 57 years. I know it really well. And I knew a little bit about the history. I was fortunate in that one of the original developers of the island was still living. He was 96 years old, but his memory was very sharp. He could tell me about his dad and his brother and how they all began to build at the coast.

That gave me a window into the development of the modern coast.

So you have this family, the Shapiros, but it  took more than just the developer, and the family, for us to get our modern day coast, right? Because you trace that in the book, the different the players, and what elements allowed us to get here, like the National Flood Insurance Program. Can you can you talk about how those factors came into play, to get us where we are now?

It doesn't happen just by developers, like the Shapiros, building little homes at the coast, although that's the start. What I saw when I looked at this modern coast phenomena is that as soon as we start building lots of homes at the coast, our expectations change. Folks who own all this property, beach town mayors and even the state governments begin to look to the federal government for help. They began to use grants and take part in various federal dollars to build bridges and to help them build utility systems, to build electricity, to do all those kinds of things on the front end that you need to do in order to build to build a town.

Even more importantly, after they were inevitably hit by a hurricane and suffer all kinds of damage, millions and millions of dollars or hundreds of millions of dollars in damages, they turned to federal taxpayers - the federal government - to help them rebuild. Beginning in 1950, with the first Disaster Recovery Act passed by Congress, we see the development of a massive and costly array of programs, subsidies and federal tax dollars that flow into beach towns after storms.

Part of it is the National Flood Insurance Program. Part of it is the U.S. Army Corps of Engineers widening the beaches and when the beaches are eroded, in front of million dollar oceanfront houses. Part of it is disaster money that goes to the individual property owners. Part of it is disaster money that goes to the beach towns to help them rebuild and just on and on. Low interest loans, you name it. And all that money's critically important to maintaining the coast, encouraging development and, as I argue in the book, quite often, in a very reckless way.

We often end up building back exactly in harm's way, on barrier islands and coastal floodplains along bays and sounds and places that inevitably are going to be damaged by storms just because of their location. And even more so in an age of climate change.

You took a close look at the origins of the National Flood Insurance Program and how it was created. One of the things that struck me is that in its early version, it was supposed to have a regulatory aspect to it so that you couldn't rebuild in these vulnerable areas - that there would be an insurance aspect but there would also be an arm that was going to look at planning and codes and zoning. We'll insure you, but we don't want to encourage this kind of development in these risky areas. Is that right?

That's that's exactly right. So when the National Flood Insurance Program was developed, it was developed because private insurers had fled that market and they fled that market because they knew the risks were too great, and that they couldn't make any money. They really couldn't sell flood insurance, private flood insurance, at a premium that any anybody other than a millionaire would be able to afford. So the federal government gets involved. A guy by the name of Gilbert Fowler White, who is one of the nation's premier geographers, is tasked with seeing if we could have a government-run federal flood insurance program. He says yes, after a year's worth of study. But he critically says you can only do this and make it work if you include land use planning as part of the program.

What he meant by that was very basically we don't want to encourage any more people to build in a coastal floodplain. That makes no sense. And it's going to wreck the insurance program if we allow that. And so they actually wanted to discourage people and disincentivize them from building on barrier islands and along bays and sounds that are going to flood. And he also said, we need to charge a rate that reflects the real risk of building in harm's way along the coast.

So what happens is that White hands this report into Lyndon B. Johnson and Johnson passes that along to Congress. And then over the next year Congress gets involved. And they inevitably watered down all of the land use requirements. They offer huge subsidies to properties that flood over and over again. And they never charge rates that reflect the actual risk of the coast. And then critically, one of the things they didn't do is they never included a reserve for huge catastrophic storms. So when a storm like Katrina or Harvey hit, and they result in the case of Katrina in $16 or $17 billion worth of claims against the Flood Insurance Program, or in the case of Harvey almost $10 billion, they don't have money to pay those bills. What they do is they end up going to Congress and using the federal treasury, which is really to say taxpayers, to borrow the money to pay the bills. Only they're never going to pay back that money because they never make enough money to repay those losses.

I think you quoted White as saying, “Floods are an act of God. Flood damage results from acts of man.”

Yeah, that's exactly right. Until you put a house on a barrier island, there's not a problem, right? A hurricane just washes over, blows sand across the island and the barrier island does what it does, which is slowly migrate towards the mainland. But as soon as you put thousands and thousands of houses on the barrier island, then you have a problem.

And you tried to find out what kinds of homes are being covered. I think you you ended up finding that one out of every four homes are second homes.

I knew that beach houses were covered, that second homes were covered, but I didn't know the extent of it. When I went to FEMA, which runs the flood insurance program, and asked them to break out that number, they curiously told me that they didn't have the capability to break it out. I then used some of their own data and backed out an estimate and came up with 1.3 million homes out of a total of 5 million homes that were beach houses or second homes. Later I discovered an old General Accounting Office report that estimated an even higher number at 1.7 million homes.

I think it's, and I ask it in the book, an absolutely fair question to ask is why is the federal government in the business of ensuring second homes and beach homes.

You also looked at flood maps and found that a fifth of the losses occur where the flood maps deem areas safe and not as vulnerable. So can you tell us where where things stand with that program?

There had been attempts to and we'll put this in air quotes on this, to reform the flood insurance program on and off over a couple of decades. And most of what's been done has been very modest. In 2012, there was actually a very serious attempt. It was called the Biggert-Waters Flood Insurance Reform Act and it would have increased premiums to reflect the real risks. As soon as they began to introduce it, people went crazy because their premiums were going up. Since so we have this weird disconnect, where people who own property in coastal floodplains along the coast expect it somehow be cheap, they don't want it to reflect the actual risk of their properties. I guess that makes sense. But it doesn't work. It just doesn't work. And that's really been the history of a flood insurance. Every time they try to reform it and make it fiscally responsible, the coastal legislators and the beach town mayors and the property owners get up in arms and start screaming that we're going to be pushing people out of their houses. And a lot of these houses are beach houses or second homes.

So at what point is it sort of political malfeasance?

We've been repeating political malfeasance at the coast for decades.

I hate to use the word climate, but the climate we're, we’re in a race against time, either to beat out the next big hurricane or the chronic flooding from sea rise. So what needs to happen?

Well that's such a big question. I mean, it may already be too late in some cases. I'm not quite sure what you do with a Miami Beach. I was just down there speaking to a group about a week ago and we had a great conversation. But I felt bad because I kept [saying] you may have two or three decades before you drowned as a result of sea rise or, God forbid, you get hit by a Cat 5 hurricane like a Dorian or a Michael before then. So enjoy your place. And I hope you bought it because you really like being at the beach and you really like sunsets and looking at the water and all those good things. Because if you bought it as an investment, I would suggest to you that we are entering an era where property values near the coast are going to, after decades of wild inflation, are beginning to crash.

We're beginning to price in risk a little bit into some of the financial instruments that we use. So, you know, somebody like Moody's, which rates bonds that towns like Miami Beach need to sell in order to improve their infrastructure, are beginning to take that into account. And so it's probably going to get a lot more expensive.

I predict that within the next 10 years or so we'll see the death of the 30-year mortgage at the coast because you would be out of your mind, if you were a bank, to lend for 30 years. At the coast, it's much more likely that we'll begin to see 15-year mortgages. Flood insurance inevitably is going to go up, despite what I've just told you. It can't not go up. It's already $40 billion in debt. It could be $100 billion dollars in debt.

So it's a scary future that we're looking at at the coast. If we see six feet of additional water by the end of this century, it's estimated that there will be a million homes in Florida alone that will be underwater. There will be 200,000 homes here in New Jersey, where I live. You can do things in the short run that will help to delay some of these changes, but they're not going to save you. They're not going to prevent those changes.

Recently the U.S. Army Corps of Engineers was in town launching the beginning of their planning effort to armor parts of Miami. As you're aware, they're doing it up and down the Atlantic coast. They were very forthcoming and frank and said, ‘You have a lot of very complicated problems. You have water not just on the coast, you have it the Everglades, you have it coming up from underneath.” I know you looked at the beach renourishment program, but I wonder about these other massive coastal [projects]. I mean, you can't armor the the Atlantic coast right?

You can't armor Florida. It's 1200 miles right? Are you going to build giant surge gates that costs $20 to $30 billion in front of every inlet in Florida? There are 200 estuaries in Florida. How do you afford to do that? And critically, who's going to pay? How much of it is going to be private? And how much of it is going to be public? We're not having these conversations. The engineers do what the engineers do. If you tell them there's a problem, they are just designed to tell you we're going to look for ways to try to fix it.

You end the book by quoting somebody from the Corps on a Corps sruvey saying, “Stop spending money and leave.”

I love that. They were holding conferences along the east coast as part of their back bay studies studies to get people meeting local politicians and beach town mayors, to get their opinions about what they should do next. And I guess the Corps engineers who were there were also able to fill out these questionnaires that the Corps gave out. And that's what one of the engineers wrote.

Retreat down here is still sort of a dirty word. We're just starting to have conversations where they call it managed retreat. And it's on a very small scale - more neighborhood by neighborhood.

So the way I look at it is there are a number of questions that get raised around these issues. One of the questions is a question of equity. Who benefits from all this money that we're spending. And increasingly at the coast, it's more well-off people. When you're looking at places on the back sides of the barrier islands, along the mainland in North Carolina and South Carolina, those poor communities are sort of left out.

So there's an equity question, which I think is really interesting. There's the economic question. How much money are we going to spend and how are we going to apportion that risk? Most of the risk goes to the federal tax payers, not to the property owners. In fact, in the 50s, the federal government contributed only 5 percent of the cost of recovery after hurricanes. Today, the federal government pays for 70% of the cost of recovery on an average of hurricane. That gives you a sense of what I'm talking about.

I've become increasingly convinced that people aren't going to leave. You can't force them to leave. Miami Beach isn't going to retreat. Miami's not going to retreat. I mean, gosh, just look at all the cranes that you see, and all the development and building that's going on. Clearly Florida is not planning to retreat, and they won't retreat until they're basically forced to retreat by a combination of Mother Nature and economics.