Can FEMA Keep Up With Climate Change?

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Lizzie O’Leary: Not too long ago, I saw this quote from a spokesman for the Federal Emergency Management Agency that made me sit up and pay attention. It was about the massive floods that swept through Montana in mid-June and the people whose homes had been damaged or destroyed. He said it really well here where he says, I always tell people this is a tough line to tell people, take responsibility for your own disaster recovery. That’s Ashley Nerbovig, a senior political reporter for MTN News in Montana. She’s been covering the floods and the communities where people were told not to wait on the federal government to come save them. Maybe at some point you will get money back from us, but it won’t make you whole, which I think is a very sensible approach from a spokesperson perspective.

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Lizzie O’Leary: But then it goes back to the policy makers of, okay, so what are we saying to these people who had no reason to think that their homes were going to get flooded, that this is on them? Sort of those people whose homes flooded, many of them didn’t have flood insurance, largely because where they live is outside the regular flood plain. They didn’t think they needed it. But with climate change, that map is shifting. We had a once in every 500 year flood in some areas based on the flood flood plains, it was like a once in a thousand year flooding. Basically, we had a really heavy snowpack that hadn’t melted off as much as we expected, followed by a bunch of rain. And so the rivers just got really high, really fast. There’s still like some conversations about like how much we should have known but took out a ton of bridges in south central Montana. And you know, what most people will be familiar with is it took out a lot of roads into Yellowstone Park.

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Speaker 2: Tonight, residents are still drying out. Cell phone video shows two kids using a raft to gather belongings and their basement filled with several feet of water from the air. The scope of the damage becomes clear. Chocolate, brown water still flowing through homes, ranches, businesses and farmlands. There are literally bridges to nowhere and a multimillion, if not billion dollar cleanup.

Lizzie O’Leary: What the Montana floods underscore is that natural disasters are getting worse and no one is immune. That’s what I think the guy from FEMA was really telling us that we’ve got to start doing the work ourselves because there is so much to be done. So today on the show, we’re going to explore what happens when the old disaster playbook needs an overhaul. Are we left to fend for ourselves? I’m Lizzie O’Leary and you’re listening to what next TBD a show about technology, power and how the future will be determined. Stick with us.

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Lizzie O’Leary: To better understand how FEMA has to adapt to a world where climate change is supercharging natural disasters. I called up the guy who used to run it.

Craig Fugate: My name is Craig Fugate. I currently work in the private sector doing a lot of advising, but I served as the FEMA administrator from 2009 until the end of the Obama administration in 2017.

Lizzie O’Leary: Craig is pretty widely recognized as the person who turned the agency around after its disastrous response to Hurricane Katrina. Some people might assume that when there’s an emergency like the floods in Montana, the federal government just shows up. That’s not actually how it works. I asked Craig to do a little FEMA one on one.

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Craig Fugate: FEMA doesn’t step in until a governor has requested from the president a disaster declaration. And part of that request, the governor certifies in writing that the disaster exceeds the capability of the state to manage in most cases. What that refers to is lack of insurance and FEMA being asked to support a state financially for the extraordinary costs.

Lizzie O’Leary: In disasters that I have covered. I think often you see people not fully understand what FEMA helps with, what they don’t help with, what you got to show. How does that process work?

Craig Fugate: Well, it goes back to the origination of the Stafford Act, which is the legislation that FEMA operates disastrous under the Stafford Act. Congress did not intend for it to be the primary response to disasters. It was based upon not duplication of benefits. The simplest thing is, if you’re getting money from somewhere else, you shouldn’t be getting money from FEMA. So if you’ve got insurance. Then you shouldn’t have to go. And again, when we say female, let’s be clear about this. This is the federal taxpayer. This you and me. You shouldn’t be going to us to pay for something if you already had insurance for it.

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Craig Fugate: Right. That’s the idea of not duplication of benefits. If FEMA is allowed to provide assistance where there is a lack of insurance or the assurance that you cover all the losses. And this is, to a certain degree, what happened in Montana. You know, most people said, well, I had insurance. Why was FEMA helping people? They had insurance. Well, it was a flood. And what we unfortunately find out after these events is most of the folks that have homes and they have homeowner’s insurance don’t have flood insurance. And so when they have a damage due to floods, we see large numbers of homeowners without flood insurance and therefore FEMA would provide some assistance. And the assistance is based upon this idea that it shouldn’t just be, you know, everybody’s going to get the same amount. It should be based upon the need and the impacts.

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Lizzie O’Leary: The money has very specific eligibility requirements, like showing a deed that says you do in fact own a property. Only then can you get your money. And often, residents are surprised by how little FEMA pays out compared with the cost of a lot of disasters.

Craig Fugate: Is not designed to make people whole. They’ll see that the maximum amount from the the program that FEMA rises to individual assistance for families and individuals is around $35,000. Average person gets far less than that. And it’s by household, not poor adult in the household.

Lizzie O’Leary: Right.

Craig Fugate: So it’s a very limited program. It’s not designed to do a full recovery and it is woefully inadequate for families trying to recover from a flood if they’re dependent upon a FEMA grant trying to make all the repairs.

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Lizzie O’Leary: Well, you’re sort of getting to where I was going next, which is how we should make sense of what’s happening in Montana, because you have, you know, a local spokesman for FEMA essentially saying, look, you’ve got to manage your own recovery if you’re.

Craig Fugate: Waiting for the federal government or somebody else to help you. You know, that help may or may not come, and I’m not sure when it will come.

Lizzie O’Leary: And you have residents who said, I have my house in an area that had never flooded before that did not seem to be in historical floodplain. Why in the world would I have flood insurance? How are some people supposed to to make sense of that scenario?

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Craig Fugate: Well, it’s not easy. And what happened in Montana is happening all over the country. And increasingly we’re seeing this as we’re seeing the results of climate change, more extreme rainfall events, heavy rain events, historical rain events, record setting rain events is causing flooding in areas that have never flooded before.

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Craig Fugate: And too often and I really go back to, you know, within government, this is one of the things that we did was we were trying to identify the higher risk areas and Congress put a requirement on there. If you live in a high risk area for flooding, you needed to purchase flood insurance. It’s called mandatory purchase in those special flood risk areas were identified in FEMA maps that are called flood insurance rate maps. And somehow the bureaucracy of the terminology got translated into from what the public heard is those are flood zones and those are flood maps. If I don’t live in that flood zone, I don’t have a flood risk and I don’t have to buy flood insurance. And that’s not what it meant.

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Craig Fugate: And I think this is a problem. We have not really communicated to people that those maps or insurance rate maps, they’re not indicating where it will flood or not flood. It’s just the risk is higher in those areas. And Congress requires you to have a federally backed mortgage. You must buy flood insurance for the duration of mortgage. It was never the intent to say people outside of that didn’t need to buy flood insurance or that they weren’t at flood risk. It was to convey the higher risk and to protect the federally backed mortgages.

Craig Fugate: And so we’ve got. Entire swaths of the country where people think or have been told or have heard. They don’t live in a flood zone and they don’t need flood insurance. And what it’s done is it’s resulted in large numbers of people that are not insured against one of the fastest growing risks that we’re seeing as a result of climate change.

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Lizzie O’Leary: Well, I guess the question is, though, it feels like even if people were to get flood insurance, that that risk is increasing so much. Right. There’s a U.N. report showing that climate change is driving a five driven a five fold increase in weather related disasters in the past 50 years. And so I wonder if even those steps of you’ve got to have coverage, you have to recognize that water is a threat, cannot even keep up.

Craig Fugate: Well, from the standpoint of the National Flood Insurance Program, the answer is yes, because they’re backed by Congress. And Congress has provided the funding to that program when they’ve had payouts in excess of what they’re able to generate. And that’s a long going separate story. But the bottom line is damages due to rising water, which is the term they use to describe a flood is excluded. And almost everybody’s homeowner policy, unless you have flood insurance and pretty much there are very few places that you can credibly say don’t have a flood risk right now.

Lizzie O’Leary: Pretty much the only game in town or only option with a reasonable price to buy flood insurance is the National Flood Insurance Program.

Craig Fugate: And because over a long period of time, starting back in the sixties, as insurers got out of the flood insurance business, the federal government got in. We’re only now starting to see the private sector get back and I would say very gingerly into flood insurance. But as long as Congress authorizes the National Flood Insurance Program, we do have a federal program to fill the gap for flood risk.

Lizzie O’Leary: Even though it’s in the red and has been repeatedly.

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Craig Fugate: Well, last time I checked, the federal deficit has been in the red and we still keep functioning. So as long as Congress will continue to appropriate funds to make up the shortfalls, then of all the things that are out there, it’s the one thing that’s available right now.

Lizzie O’Leary: When we come back, why FEMA has an equity problem and how it’s trying to fix it. In April, FEMA changed the way it quantified risk for the first time in 50 years under a plan called risk 2.0. The agency altered how premiums for flood insurance are set, pricing them on a much more individual level.

Craig Fugate: FEMA’s moving in the direction of trying to price the risk by household versus just buy areas to better reflect the risk to the home and steps people have taken to mitigate that. So that’s one step. The second thing that I think FEMA’s been doing for a long time, and we saw in the last couple of budget cycles a big increases in what they call the pre-disaster mitigation firms. They call it now building resilient infrastructure in communities. But is the idea of literally taking over $1,000,000,000 and putting grants out to state and local governments to start looking at how they can reduce the impacts of natural hazards before they occur?

Craig Fugate: People always look to FEMA like, well, FEMA is not the answer in many cases. Congress needs to act. FEMA has its authorities and it has its funding. And Congress says what you can do with it. But we see other competing programs more than competing complementary programs like HUD, Community BLOCK and Development Grants. They provide, in some cases, after very significant disasters, our community block grant dollars for disasters.

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Lizzie O’Leary: That was something I saw happen in Puerto Rico when I covered the aftermath of Hurricane Maria. BLOCK Grants were also given to local governments in Texas after Hurricane Harvey.

Craig Fugate: The problem is, these are what I call one off. It’s not a standard program. To a certain degree, it’s not even authorized. Every time they do it, they have to start from scratch with rules. It delays the money getting out there. It usually takes 2 to 3 years for that money to actually make it to the states, much less to homeowners. And that’s a long time if you’ve got a home that’s been flooded trying to make repairs.

Lizzie O’Leary: There is another key issue here. You might have noticed that both Craig and I have been talking a lot about homeowners and FEMA’s programs are generally directed at them. But a storm or a flood doesn’t care if you own or rent. And renters are even more vulnerable to the economic upheaval that can come after a disaster.

Craig Fugate: Renters are caught in this dynamic of they’re dependent upon the people they rent from, from having the insurance, making the repairs, and be able to get back into that. We’re seeing a crisis and just rental rates going up. And what tends to happen in rental properties after disasters, either they don’t get rebuilt because the owners didn’t have insurance or they just sell the land and they get redeveloped to something else. Or when they rebuild it and repair it, they’re now pricing it to the new value and it’s pricing people out. So we’re seeing of all of the groups that are more adversely affected and in many cases not able to stay or return to their communities after flood, are the renters that are being driven out? When we see these type of losses and what gets built back is generally not what you would consider affordable rental properties.

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Lizzie O’Leary: In New Orleans. In the decade after Katrina. Rents jumped by 33%. The national average for that time was just 6%. After a disaster, runners are often left to fend for themselves.

Craig Fugate: If you look at the FEMA programs, even the HUD programs, they tend to be biased towards homeowners. Renters get limited assistance. They’ll get short duration rental assistance. But there’s nothing really addressing the longer term issue as rents go up. How do people stay in their communities for affordable properties when they can’t afford the new cost?

Lizzie O’Leary: Well, how do they?

Craig Fugate: They move. I met with the CEO Waffle House about a year after Michael hit, and he was going down visiting his stores. He was telling me one of the challenges they have is their associates, what they call their employees. Some are. We’re driving them. We’re on our way to work at Waffle House because there’s nothing in the immediate area they could rent. And those are kind of things that the data keeps piling up.

Craig Fugate: You look at Lake Charles, Louisiana. I think they’ve been hit by three hurricanes. We talked to the workers there. And again, these are your what I would call the service industry, the non skilled workforce. They’re being pushed out because what’s getting rebuilt is much better than what they were renting. And that reflects the price of those rental properties are going beyond what they can pay. We are seeing a migration of renters being pushed out of communities and are either having to face driving longer distances to get to their jobs or they’re relocating. And now you’re starting to see the secondary effects of the workforce being impacted and the unavailability of workers. Now, this is on top of COVID and what we’ve seen in great resignation and trouble getting workers. Now, imagine that you’re in a community that you’re facing affordable housing as one of your challenges to recruiting and retaining workers.

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Lizzie O’Leary: Craig says FEMA’s aware that it has an equity problem and that marginalized communities have long been left out of the rebuilding process. He argues that that is starting to change.

Craig Fugate: Well, one step President Biden took was he asked all the agencies to go back through their programs and identify the biases and try to identify why we’re seeing the biases. And we already know on the Top End that for FEMA, it’s homeownership. Mm hmm. Is who’s going to get the most money so that it excludes renters. But even within homeownership, there was I ran into this in the administration, and we had to kept doing these workarounds. If you go into a lot of communities, particularly historically African-American communities, and this is true in the Deep South where I’m from. People didn’t always go down to the courthouse to record the changes as members of the Family Dot. They didn’t go to attorneys and do formal estate.

Lizzie O’Leary: Right. This is I got the house from my grandma who got it from her grandma. And we all know that.

Craig Fugate: So you have a disaster and they go apply for assistance and FEMA goes.

Craig Fugate: Why are you the owner of the hall? Well, yeah. Where’s your fridge? What do you mean? Where’s your deed? You know, we went. We went and query the courthouse. There’s no record of you owning this hall. It’s somebody in the past. We don’t know if you’re legitimately here and in the effort of stamping out fraud, which became a big political issue after Hurricane Katrina. If you can’t prove you’re the homeowner, you can’t get assistance. We’re talking amounts under $35,000. If there’s fraud, we’ll give the justice to prosecute. But they’ve been living there. They got, you know, phone bills. They’ve got power bills. You know, their car registered their driver’s license, their their voter registration is there. This is not an indictment of FEMA. This is just within the federal government. You don’t get rewarded for taking risk. And playing it safe is usually the best bet if you’re in civil service.

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Craig Fugate: The program is supposed to be equal to all, yet the way it’s administered in many cases creates inequities. And I think the FEMA team are really using this executive order to the president to get some of the root causes to eliminate. But it’s still going to be based upon primary assistance is to homeownership, less assistance to renters and no assistance to businesses with what they consider somebody who leases or rents their home. And we know that a lot of rental properties are not that conglomerates, they’re not investment firms. They’re people that maybe retired, moved to a retirement community, but kept their home for income. They don’t have a lot of resources. And when that home gets flooded, they don’t have insurance, they can’t fix it, so they can’t keep renting it. And they end up either have to sell it at a loss or put a lot of money into it, make repairs, and now they’re going have to raise rents to cover that because it’s their income source.

Lizzie O’Leary: The idea of managed retreat, a whole community says, all right, we are not going to rebuild here. We’re going somewhere else. It happened after Superstorm Sandy in some places, but what do you think?

Craig Fugate: It actually started as far back as 1993 and the big Midwestern floods. For a time, director James Lee Witt, FEMA, began working with communities and said, you know, stop putting it back in the river, plan to flood out again. Why don’t we take the whole town and move it up on that hill? Again, these were small numbers, but it demonstrated that FEMA did have that ability. Florida we’ve had some communities from the eighties and nineties that flooded routinely, that we went in, bottomed out, moved them. And even though we’ve had significant floods since, we didn’t find those homes. So it is something that can be done.

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Craig Fugate: But there’s also the challenges you run into. One is the historical context. We have historical communities that if we don’t rebuild, we lose that air. And so there’s a lot of pressure to rebuild. Some industries are very dependent upon very vulnerable coastal areas that again, workforce and housing are key. And a lot of local governments have tremendous pressure to keep communities where they’re at. But we’re seeing even in the state of Louisiana.

Lizzie O’Leary: I was going to say you’re describing the state of Louisiana.

Craig Fugate: The Governor, Edwards has worked with some of the communities and they made a decision on one of the tribal areas. They had basically a sea level rise and repetitive flooding, made the agreement to relocate the whole community. Another place is, I think, going to be accelerate even more is going to be in Alaska. And the challenge in Alaska is a lot of these communities that need to relocate won’t necessarily be from a federally declared disaster of permafrost and erosion of coastlines. We have seen communities in Alaska having to relocate and the question is going to be, how do we pay for that? And not all of these events are triggering federal disasters where you at least have some of the Stafford Act funding to do this, and primarily the buyout programs all around flooding and not erosion.

Craig Fugate: So that’s another kind of a mismatch between what the flood insurance program has historically looked at as far as buyout relocations versus some things which may be less of flood, but still involving water. And how does that equate? And again, what’s the best federal program? Because some of these things are not an acute disaster. It’s over a period of time. It’s to the families involved. The homeowners involved are the communities. It’s a disaster, but it’s not something that generally the Stafford Act was designed around.

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Lizzie O’Leary: Thinking about this kind of zooming out a little bit. You’re making me think I’ve covered a lot of disasters. People always complain about FEMA. But one thing that seems notable now, it’s not that the complaint isn’t FEMA’s doing a bad job in my town or FEMA isn’t helping me. It’s maybe FEMA has so much to deal with that it can’t meet this need or that the need is beyond the scope of what FEMA is supposed to do. Does does FEMA need to change its mission or is there. I don’t know. Some other agencies, some other plan that needs to happen.

Craig Fugate: I think the first step is we’ve got to admit the system isn’t designed for the frequency and severity of climate induced weather related disasters. And there are lobbyists, a lot of climate met. And I’m like record setting weather events that are occurring on a monthly basis cannot be ignored. And if nothing else, whether you believe in climate change or not, if we’re having this many record setting weather events that’s causing massive damages. The one thing we should understand is what we built for in the past isn’t working today. And we’ve got to do something different.

Lizzie O’Leary: Craig Fugate, thank you so much for your time.

Craig Fugate: Thanks for having me.

Lizzie O’Leary: Craig Fugate is the former FEMA administrator under President Obama. All right. That is it for the show today. TBD is produced by Evan Campbell. Our show is edited by Tori Bosch. Joanne Levine is the executive producer for what next? Alicia montgomery is vice president of Audio for Slate. TBD is part of the larger what next family, and we’re also part of Future Tense, a partnership of Slate, Arizona State University and New America. We will be back on Sunday with another episode. I’m Lizzie O’Leary. Thanks for listening.