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Coastal Development Subsidies

April 1, 2001 | By Jim Lively
and Patty Cantrell
Great Lakes Bulletin News Service


Michigan's Great Lake shoreline is subject to extreme, unpredictable fluctuations in lake levels and to storm surges.

In 1972-73, and again in 1985-1986, record high lake levels caused millions of dollars of damage to shoreline property, especially in the town of Luna Pier on the Lake Erie shoreline. Federal taxpayers helped pay to rebuild homes in the same flood-prone locations under the National Flood Insurance Program, (NFIP), a unit of the Federal Emergency Management Agency.

The 29-year-old National Flood Insurance Program has become a major incentive for shoreline development, even though its intention was actually to discourage people from living in areas vulnerable to flooding, overflow of tidal waters, mud slides and the collapse of land. ***

The Coastal Barrier Resource System was created in 1982 with support from President Reagan and Secretary of the Interior James Watt. The CBRS prohibits federal funding of new development (roads, bridges, sewers, waterlines, and housing) in specified coastal areas that are prone to erosion and flooding. The prohibition also prevents federal spending on individual flood insurance policies.

In 1990, Congress added 32,000 acres of coastline along the Great Lakes to the CBRS, including some in Michigan.

Recent Action:

The U.S. Army Corps of Engineers recently reported that 1997 levels for the Great Lakes may reach 1985's record highs.

Taxpayer Concerns:

• The National Flood Insurance Program forces taxpayers to take risks some private insurers will not take.

• Coastal flood insurance premiums do not cover actual risks. Citing 1989 testimony by the administrator of the Federal Insurance Administration, the Coast Alliance reported, "An average federal flood insurance policy along the eroding coast costs $1,000 per year. ... This amounts to a subsidy of at least $10,000 per policy in the erosion zone."

• The NFIP's financial safety net promotes shoreline development in treacherous areas. The number of households located in flood hazard areas nationwide has increased 40% since the creation of the program.

• Federal subsidies for coastal area development -- including roads and sewers -- average $82,000 per acre, according to the Department of Interior. The Coastal Barrier Resource System prevents this expenditure in designated areas.

Local Concerns:

• Some residents express concerns that federal subsidies undermine Michigan's coastal and wetland protection programs.

• Residents also believe the federal subsidies promote development activities that conflict with local goals.

Environmental Concerns:

• Environmental groups argue that shoreline development is the chief cause of coastal pollution, degrades sensitive and vital ecosystems, and diminishes open space and public access to the coast. $

Green Scissors Contacts: Scott McEwen, Tip of the Mitt Watershed Council, 616/347-1181; Beth Millemann, Coast Alliance, 202/546- 9554.

Pro-Spending Contacts: Mark Stevens, Federal Emergency Management Agency, 202/646-3969; Don G. Bennett, Luna Pier, 313/848-6495.

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