NCPA - National Center for Policy Analysis

Subsidies Encourage Building Castles On Sand

July 27, 2000

Populations in counties lining the Atlantic and Gulf of Mexico coasts have grown almost 50 percent faster since 1993 than the United States' population as a whole. Millions of Americans have flocked to beaches and -- given the safety net of federal insurance programs -- built upon them.

This will contribute to a disaster when the next big hurricane strikes a highly populated coastal area, warn critics. Federal largess -- in the form of subsidized disaster loans, beach reconstruction and flood insurance -- lured people to the shore.

  • Between 1990 and 1998, 100 coastal counties along the Atlantic and the Gulf saw populations rise from 13.2 million to 15.2 million.
  • In the 1990s, the number of coastal-disaster declarations shot up to 189 -- compared to only 28 in the 1970s and 69 in the 1980s.
  • Each year, taxpayers spend $85 million dumping sand on beaches that typically gets washed away by storms.
  • Some people whose beach homes are repeatedly washed away by storms repeatedly build again on the same spot -- and repeatedly run to the federal government for aid in rebuilding.

The Congressional Budget Office calculates that cutting off insurance for those who file repeated claims would save nearly $1 billion over the next decade. Cutting the subsidy would save another $1 billion.

Yet one bill in Congress that would limit property owners to two flood claims reportedly has little chance of passage.

Source: Editorial, "How Your Dollars Let Others Live at the Beach," USA Today, July 27, 2000.


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