I know I keep coming back and back to this topic, but the latest from Governor Cuomo confirms all my worst fears about upcoming Hurricane Sandy giveaways. Thomas Kaplan has the story in yesterday's New York Times.
With both houses of Congress having passed the $51 billion Sandy relief bill, Cuomo aides met with Federal officials in Washington on Friday to present plans for use of some large part of that money for "buyouts" of people whose homes were damaged.
For the 10,000 or so homes in the 100-year flood plain that were substantially damaged by Hurricane Sandy, Mr. Cuomo would offer owners the pre-storm full market value of their houses. Homeowners who chose to relocate within their home county would receive a 5 percent bonus above the market value, as part of a government effort to encourage them to stay nearby. State officials said they were planning for the possibility that 10 to 15 percent of those eligible would take the buyout.
Residents of more vulnerable areas would receive a further enticement: they would be allowed to sell their homes even if the homes suffered little, or possibly even no, damage from the hurricane, and the state would pay them an additional 10 percent bonus, above market value, to sweeten the deal.
In a few dozen blocks located in areas of extreme risk, the state would offer another 10 percent bonus if every homeowner on the block agreed to sell. Local officials would be expected to determine how best to use the new open space, though they would not be allowed to build on it.
Or, to put it in simple terms, if you didn't buy the flood insurance you get a far, far better deal than if you did buy the insurance. For those who don't know, all the Federal flood insurance you can buy for a 1 - 4 family house is $250,000 for the house and $100,000 for contents; and the premium for that is $3289 per year if you are in Zone A. Well, forget that, you suckers who bought flood insurance, now we're going to pay full pre-flood value of the house plus up to 20% for those who didn't bother to buy the insurance.
And by the way, what is that about "a few dozen blocks located in areas of extreme risk." As far as I know, the entire run of the barrier islands is an "area of extreme risk." New York has 100+ miles of them and New Jersey has another 100+ miles of them, and the rest of the East Coast and Florida and Texas have hundreds and hundreds of more miles of them.
The article suggests that Cuomo says this won't cost all that much because most people will want to rebuild and won't take the buyouts. Well, maybe this time, but once the word of such a program gets out sooner or later every house on the whole coast of the United States is going to get bought out. I just wonder if any of our governing geniuses understand how impossible this is. Cuomo gets to look like a sugar daddy to the beleaguered Staten Islanders for a few moments, and next time around the taxpayers have to buy out the mega-billionaires in East Hampton or Palm Beach.
Meanwhile, suppose your house just burns down. As of today, we still have that old-fashioned rule that you either buy insurance, in which case you get whatever it pays, or you don't, in which case tough luck. And the poor souls in Toledo or Topeka whose houses burn down aren't playing heads-I-win-tails-you-lose with the taxpayers looking to live the good life on the beach for a few years and then get bought out at a premium when the flood comes. The press should be all over Cuomo with the mindlessness of this. Are they? Well, here is the lead editorial from this morning's New York Post. "We'll have to see the details, but the governor's plan strikes us as an excellent way to save lives and dollars." And the Post is usually at least somewhat sensible on issues of government spending. Is there no hope?