Hurricane Ian is the latest devastating hurricane to confirm that coastal areas are failing to keep rebuilt or new development out of highly vulnerable areas.
Federal and state taxpayers have spent billions of dollars over the past four decades pumping up beaches in front of coastal properties in what are known as beach nourishment projects. In Florida alone, almost $3 billion in public funds has been spent just to keep beaches in front of investment homes and oceanfront infrastructure. Studies in Florida have shown that these beach projects increase oceanfront development. Government spending is incentivizing this expansion into danger zones — a classic example of moral hazard, in which there is no reason to protect against risk when the government or federally subsidized flood insurance is there to pick up the tab.