The risk factor in land use planning plays out in many ways and floodplains are a good example. Some say that the National Flood Insurance Plan (NFIP) actually encourages - or at least doesn't discourage strongly enough, building in floodplains.
It definitely doesn't discourage it enough. Really shouldn't have gotten in the business of having a NFIP.
This varies wildly among counties/cities across the US. While there are minimum standards for participation in the NFIP local land use planning and enforcement can be strict or barely existing. And in southern states where there is a strong land owner rights philosophy many folks just ignore the rules and there is not a robust regulatory structure.
Enforcement is strict or barely existing based on how much interest the NFIP takes. You're generally not going to see a known, floodprone area get a lot of leeway from NFIP.
People don't want to hear "you can't build here, it's not safe". But -- when the flood comes and they have no flood insurance they are begging for government intrusion.
Interestingly, about 6 years ago Congress actually stepped in and amended the NFIP and required risk-based fees from home-owners. Thus, if you lived in a more risky environment, say coastal NC, then you would pay more for insurance. Except when home owners really squawked about no longer getting subsidized rates in FL and other SE coastal states - those senators when back, and yes, changed the rules back. Too classic.
Well, to be a little more nuanced, NFIP/FEMA put out BFE's and told people sure, go ahead and build here, just build higher than BFE. Then they raised BFE in a lot of places by as much as 4 or 5 feet. Then they said, hey, a lot of you are now 2 feet below BFE, your new flood insurance will be about 1/27th of the cost of your coverage annually. And then the people flipped out because their house that had flooded once in 70 years would now cost $9000 per year to insure for flood. And
THEN (this is probably the important part), the banks said, "wow. Kind of funny that you just spent a trillion dollars to bail us out just to have us go under because the NFIP has lost $25B over it's four decades of existence, which is roughly what you spend each year on farm subsidies. At that point, most of the reforms were rolled back.
Again, I think it probably would have been better to not have a federal flood program to begin with (although maybe if we'd just end up doing bailouts with grant money anyway this has actually reduced the cost), but it was absolutely asinine to try to change it where in a way that would cause millions of people to get foreclosed on. It wasn't going to be politically feasible to cause the people who had been flooded once in 70 years that they have records to be foreclosed on, much less the people that hadn't been flooded at all.
