Government continues to subsidize building in hurricane-prone areas

SOUTHPORT, N.C. -- This quaint coastal town, with its cozy shops, broad main street running to the shore, and hint of salt in the air, is essentially the "before" picture. This is much like what Bay St. Louis, Miss., looked like until Hurricane Katrina's 20-foot storm surge smashed most of the town.

But there is one critical difference. Bay St. Louis is in Hancock County, which before being struck by a Category 3 hurricane last August was home to 47,000 people, having added just 4,000 residents between 2000 and 2005. Southport is in Brunswick, one of the nation's 100 fastest-growing counties. Its population jumped from 73,000 to almost 90,000 during that five-year period and will soon explode if the state of North Carolina gets its wish.

The state government recently bought 600 acres of farmland on the outskirts of Southport with the intention of building one of the largest seaports on the East Coast. The state is predicting that the port will create thousands of jobs and be an enormous economic boon to the Carolina coast. Meanwhile, meteorologists warn that the area -- as well as the rest of the southern half of the Eastern Seaboard and the Gulf Coast -- faces a growing risk of being hit by a storm packing the wallop of Katrina.

Thus, Southport stands at the dangerous intersection of two dramatic trends: One is the government-subsidized growth of the nation's hurricane-zone population. The other is the increased ferocity of the average hurricane season -- an upswing in the frequency and intensity of named storms that contrasts markedly with the comparatively quiet hurricane seasons typical of the quarter-century that ended in 1995.

The National Oceanic and Atmospheric Administration on May 22 predicted that there will be "13 to 16 named storms" during the six-month 2006 hurricane season, "with eight to 10 becoming hurricanes, of which four to six could become 'major' hurricanes of Category 3 strength or higher." From 1950 to 2000, the average Atlantic season produced 11 storms, six of which became hurricanes, two of them major. The 2005 season produced seven major hurricanes and a record 28 named storms.

The fierce-hurricane trend, expected to continue for at least another decade regardless of whether global warming is partially to blame for it, is beyond the control of government. But the growth trend putting more and more people and possessions in harm's way is being encouraged and subsidized by all levels of government.

As monstrously expensive Katrina certainly reminded federal appropriators and taxpayers, once a killer storm slams ashore, the federal government ends up footing much of the bill for rescue and repair. And the more developed the spot where a powerful storm makes landfall, the more costly the cleanup. But what can or should the federal government do to discourage or storm-proof development along high-risk stretches of coastline?

A few federal officials have begun asking that question. But in the decades preceding Katrina, Uncle Sam took the opposite tack -- shouldering more and more of the costs and financial risks associated with locating very close to shifting sands and unpredictable waters. Federal tax dollars pay for highway expansion to support coastal development, and highway repair after a storm.

The Environmental Protection Agency's subsidized loans and grants help build water and sewer lines in coastal communities, which spur growth. Homeland Security dollars help upgrade emergency communications systems and evacuation routes, making it safer to move into high-risk housing. The Army Corps of Engineers spends billions of dollars dredging waterways to promote or preserve economic activity, and pours countless tons of sand onto eroding beaches.

"Historically, everyone who built anything out there [near the shore] understood that it was at risk," noted Courtney Hackney, chairman of the North Carolina Coastal Resources Commission. "Once communities had the wherewithal, basically backed by the federal government, to build the infrastructure and keep repairing the infrastructure, that provided the incentive for a lot of development that you would obviously say is risky. Anytime you build within a few hundred yards of the ocean where you are only a few feet above sea level, that's really risky. It really required state, local, and federal backing to make any of this happen.

"And then, of course, federal flood insurance -- that sort of put the icing on the cake," Hackney continued. "Now you could build out there relatively risk-free.... As long as somebody else is paying the cost of repairing it, it's a great deal."

If You Build It ...

If the North Carolina International Port planned for Southport is ever built, the federal government will spend hundreds of millions of tax dollars on dredging and maintaining a channel deep enough for massive cargo ships. The port would also require federal money to extend rail lines and upgrade roads.

All this to build a gigantic port 10 miles from the ruins of the first North Carolina seaport, which was abandoned 230 years ago when settlers decided that the place was too susceptible to storms and pirates. They moved upriver to Wilmington, 28 miles inland, where the state's largest port still operates.

Now, Brunswick County is once again prime real estate. The building boom started years before plans for the mega-port were unveiled. The addition of the port would guarantee that if a Big One starts bearing down on that part of the coast, the federal government will spend millions to help evacuate residents, more millions to rescue people who couldn't or wouldn't leave, and still more millions to shelter people who can't return home. Add to that the millions in insurance claims it will pay to the beach-town residents whose homes were destroyed, and the billions it will provide to rebuild the devastated towns that perhaps never should have been put there in the first place.

The resort towns of North Carolina's Outer Banks are stunning examples of what can happen when the federal government underwrites growth without insisting that it be smart. On tiny barrier islands, such towns as North Topsail Beach and Kure Beach are packed with three-story McMansions, 12-bedroom guesthouses, rows of town houses on stilts, condos, and surf shops -- all within 100 steps of the waves. Unseen are the billions of state and federal dollars that made those private investments financially feasible.

This year alone, the Carolinas have an 18 percent chance of being ravaged by an "intense hurricane" (Category 3 or higher), according to Colorado State University's widely respected meteorologists. And yet people continue to flock to hazardous coasts. Twelve of the nation's 100 fastest-growing counties are on the coast in hurricane-prone regions of the Atlantic and the Gulf of Mexico. Another dozen sit just one county inland.

The anchor for the stretch of coast where North Carolina meets South Carolina is Wilmington -- a place where federally subsidized roads, sewers, and port facilities have helped to nearly double the population since 1990.

Democratic Rep. Mike McIntyre, who represents the southern part of the Tar Heel coast, sees the federal role as entirely appropriate: "We're not paying to put people there. We are not paying [for infrastructure] so people will come. We are doing it because, in fact, people are there. It is almost like everyone has discovered the great historic port city Wilmington and all of its charm, but also they have discovered the small little sleepy coastal beach towns. And everything is booming."

Meanwhile, the Corps keeps dredging 28 miles of the Cape Fear River -- from the ocean to Wilmington's port. But the floating behemoths that are rapidly becoming the standard in international shipping can't navigate that channel. Rather than trying to deepen the waterway to accommodate them, the state bought the parcel in Southport to start over.

Of Risks and Benefits

State officials argue that creating a new port in Southport will save the federal government a lot of money because it's less expensive than upgrading the Wilmington port. The state has no intention of closing the Wilmington port; the Corps will continue maintaining the existing shipping channel. So, why bother building a second port?

"It's all about economic development -- exclamation point, exclamation point," said Thomas Eagar, CEO of the North Carolina Ports Authority. "A port will attract business, and that is something that we haven't been able to do competing with places like Norfolk and Charleston. We've lost a lot of major projects because of our lack of a Class 1 port."

The ports authority estimates that a new port will create 48,000 jobs in the state, generating $47 million in annual tax revenues. All of this economic activity, of course, will live in the shadow of a growing hurricane threat.

Eagar says North Carolina will be better able to mitigate hurricane hazards in Southport than anywhere else along its coast. "We are starting this project with a blank slate," he pointed out. The area is still lightly populated, and local planners can take storm risks into account when expanding roads, upgrading building codes, and mapping evacuation plans.

Of course, planning can't eliminate hurricanes. "You could get a Category 3 or 4 through here," Eagar acknowledges, "but those are the risks you have at any location, and the farther south you go, the greater the risk will be. You can't let that risk prevent economic development."

The new port is critical to the nation's continued economic growth, Eagar argues. International trade is spawning an enormous increase in shipping traffic, and the United States needs to expand its port capacity to keep up. Southport, he insists, is a solution, not a problem, for the federal government.

The state has already made a significant financial commitment to the port, spending $30 million for the land, but the federal share of the project could ultimately be hundreds of millions of dollars. First, the state is seeking a $100,000 federal appropriation for an initial Corps study of the site. That will be followed by a full feasibility study costing about $6 million, split 50-50 between the feds and the state.

The ports authority's planning documents suggest that federal funding will account for "a significant portion" of the $400 million needed to dredge the new port, and the project also depends on major expansions of interstate highways in the area and upgrades of federally funded rail lines.

As Brunswick County grows, it needs to expand its capacity to evacuate large numbers of people quickly. Randy Thompson, the county's director of emergency services, says, "Right now, I am real concerned about our road structures. Most all of our roadways leading out ... from all of our coastal communities are two-lane roads. You would have to run 18 [or] 20 miles to the west before you actually got to a primary four-lane roadway."

So tax money will be needed to widen the roads, and as the roads are widened, people will build along them. Yet, just since 1996, hurricanes have done $250 million in damage to Brunswick.

Even though states north of them are far less likely to be hit by killer storms, every North Carolinian interviewed for this article said that Southport shouldn't be singled out as a dangerous place for the federal government to invest. They're right that federal money is underwriting growth in hurricane-prone areas up and down the Atlantic coast.

In the past 12 months alone, members of Congress from coastal states have proudly announced millions of dollars' worth of federal projects along the shoreline, including $8 million to expand the airport in Myrtle Beach, S.C., and $615,000 to improve the town's storm-water management system; $19 million to deepen the harbor in Brunswick, Ga.; $1.5 million to improve a waterfront road in West Palm Beach, Fla.; $17 million to expand a Maryland coastal highway to four lanes; and $2.5 million to study hurricane protection along Long Island's vulnerable South Shore.

Many of the biggest price tags are for post-storm rebuilding. While the Louisiana and Mississippi gulf coasts will ultimately receive tens of billions of federal dollars in infrastructure reconstruction funds, the federal government is also channeling millions of dollars to other states for damage done by Katrina, Wilma, and other hurricanes. For example, $2 million is going to repair a Miami amphitheater. And $500 million is designated for storm-damaged Florida roads and traffic lights.

Rep. Earl Blumenauer, D-Ore., is sympathetic to the North Carolinians' desire not to have Southport singled out. What with floods, fire, tornadoes, earthquakes, hurricanes, and volcanoes, "75 percent of the American people are at risk of some kind of disaster," he estimated. For example, he noted, "if we are not careful, in the next 20 years there will be a million more people who are going to bleed into exurban/rural Colorado," which is prone to wildfires. And once they set up housekeeping, Blumenauer said, "they will say, 'OK, you let us build here. Now protect us.' "

Blumenauer, leader of a congressional Livable Cities Task Force, is a one-man traveling show, crisscrossing the nation to advocate disaster preparations, strong building codes, and sustainable development. He says the nature of the congressional appropriations process is one of the chief roadblocks to smarter planning.

"It is easier for the appropriators to spend tens of billions of dollars to clean up after Katrina than to spend tens of millions of dollars to prevent" the damage, Blumenauer said. Reducing risks by, say, elevating structures or toughening building codes can be expensive. And any federal support for such efforts would have to survive the ordinary budget process. By contrast, hurricane relief funds are provided through emergency supplemental appropriations, which are not constrained by normal budget ceilings.

"It is a very perverse budget logic," said Blumenauer, who suggests making it easier to fund projects that promise to protect people and property, and thus reduce the need for emergency assistance. Blumenauer also argues that the federal government should shift more of the burden for bad decisions back to the communities that made them: "You think it's a great idea to develop this beach? [Then] you are going to be responsible for more of the cost of infrastructure, beach replenishment, and recovery from disaster."

Castles on the Sand

A dizzying array of federal programs -- with goals as diverse as wildlife preservation and oil production -- are involved in some aspect of coastal management. The only things they seem to agree on is that local land-use decisions are largely the purview of state and local officials and that there is precious little the federal government can do -- or wants to do -- to keep people away from hazardous areas.

But federal officials are taking the first tentative steps toward reconsidering policies that have had the perverse effect of encouraging people to build their castles on the sand. James Connaughton, chairman of the White House Council on Environmental Quality, is the point man for a nascent administration effort to grapple with the whole issue of risky coastal development and the liabilities with which it burdens taxpayers.

"You are tapping into an undercurrent of [federal] activity that hasn't broken into the top line," Connaughton said in an interview. "For there to be power in local politics, you need accountability. There is almost no accountability when the federal government is the one writing the checks and operating the program for you.... And that's where we need to reset that balance."

Under the auspices of the Ocean Action Plan, which President Bush signed in December 2004, Transportation Secretary Norman Mineta chairs a Cabinet-level committee on maritime transportation with broad authority to consider all aspects of port development, including survivability. "We are able now with that new process to take much better account of those inappropriate conflicts between development and natural forces on the coast," Connaughton said.

"There is going to be trillions of dollars of new investment along our seaboards over the next half-century," he added. "The way we look at it is, How can we harness that investment toward lower risk, higher economic yield? That's an operating concept within each of these decisions we make."

In December, the Federal Emergency Management Agency warned North Carolina that many of its coastal counties would have their flood insurance rating downgraded (thereby driving up insurance premiums) unless the state adopted more-stringent building codes to reduce the damage that flying debris can cause. In January, the state began requiring houses within 1,500 feet of the shore to be equipped with storm shutters or plywood. FEMA wants the requirement to extend much farther inland. The state has balked.

Wanda Edwards, deputy commissioner of the North Carolina Department of Insurance, said a state task force is grappling with whether to expand the new requirements. The basic question it must address, Edwards said, is, "Do you want the consumer to bear the cost, or do you want the state and federal government to pay" to clean up the damage that more prevention would have avoided? Meanwhile, luxury beach houses with large plate-glass windows looking out toward the sea continue to spring up all along the Outer Banks.

A new task force of the White House Office of Science and Technology Policy is working on guidelines for reducing coastal wind damage. Earlier this year, the office produced a "Windstorm Impact Reduction Implementation Plan," which largely focuses on improving research on vulnerability to wind damage, construction standards, and disaster-response plans. A multiagency group has been formed to coordinate the report's recommended projects.

Whatever policies these groups develop, the biggest federal player along the coast will still be the Army Corps of Engineers, which is one of the hardest agencies for any White House to control. Much of the nation's coastal development is driven by multibillion-dollar projects, such as ports and levees, that are ordered by Congress and built and maintained by the Corps.

The Corps also plays a major role in trying to protect coastal areas once they are developed through beach replenishment. Since the Clinton administration, the White House has tried to essentially eliminate Corps funding for pouring sand onto eroding beaches. Without regular "beach renourishment," East Coast beaches will continue their natural erosion and accretion cycles, and any structures near the shoreline will wash away eventually.

But the Corps didn't actually get out of the beach-rebuilding business. Through earmarks and appropriations bills, Congress simply restored the beach projects.

"The way the Army Corps of Engineers gets involved in projects and activities that pertain to development is ... Congress directs it to," said George Dunlop, the Army's deputy assistant secretary for civil works. The Corps has no independent authority to set construction priorities and little ability to consider the broader effects of the projects that Congress assigns it.

"Congress needs to give the Corps more programmatic authority. Don't [mandate] a bunch of individual projects," Dunlop said. "If you look at the authorizations that take place for most other agencies of government, the agencies have a great deal of discretion about how to actually deploy funds between programs. The Corps doesn't have that."

Nevertheless, the Corps is trying to shift more responsibility back to the states. For major development projects, "the current cost-share formula is typically 65 federal, 35 local," Dunlop said. "We really believe that, moving forward, these cost shares ought to be 50-50 federal and local. There has to be more local ownership. You'd think that the 35 percent would keep them a little involved, but it really doesn't. There is too much of a tendency for the local people to think, 'Well, this is a federal project, a federal responsibility.' "

Dunlop said the Corps is trying to get communities to think through development in more comprehensive ways. "If you have a 27-foot levee and [the possibility of] a 30-foot storm surge, you have to have a whole lot of policies in place," he said, "which would include evacuation and local land-use and local flood-plain management, and efficient highway systems that can facilitate evacuations. And those are really local responsibilities."

As Katrina demonstrated yet again, once catastrophe strikes, it is almost impossible for Congress to say no to requests for help with reconstruction, regardless of whether the original development was wise. Thus, the federal government is beginning a multiyear, multibillion-dollar effort to help residents return to Bay St. Louis and other coastal towns that were destroyed not because a levee failed but because the storm that struck was simply more powerful than construction there was able to withstand.

"When people are in need, people will respond at all levels of government, and that's appropriate," Connaughton said. "What we need is greater political will that can be brought to bear so people aren't put in a position where they need to call on their governments for such response."