When U.S. homeowners buy subsidized flood insurance from the Federal Emergency Management Agency, they make a commitment to build back better after flood disasters, even if it costs them. FEMA’s notorious 50 percent rule stipulates that if a home in a flood zone suffers damages worth more than half its value, it must be torn down and rebuilt so it’s elevated above flood level. This can cost homeowners hundreds of thousands of dollars, but it prevents the American public from footing the bill for the repeated destruction of vulnerable homes — at least in theory.
Enforcement of the 50 percent rule largely falls to local officials in flood-damaged regions, who are charged with ensuring that their constituents aren’t rebuilding in flood zones. In exchange for this diligence, the federal government subsidizes low-cost flood insurance for homes in…