Private Sector Land Market Decision Agents as Targets of Flood Plain Policy

Abstract

This article examines the influence of floodplain land use policy on land market decisions of three private sector decision makers-owners of vacant land, developers, and building owners. It is based on a mail survey of 312 such decision makers in 10 cities across the United States. Our findings imply that floodplain programs, with their emphasis on floodproofing, have a significant effect on the extent to which new structures built in the floodplain are protected from future flood damage, but less effect on decisions to buy vacant land, develop property, or occupy structures in floodplains in the first place. The findings also imply that effective floodplain programs must target builders and developers and owners of vacant land because their decisions come earlier in the rural-to-urban land conversion process and they are more likely to avoid the hazard or take mitigation actions in response to information, incentives and regulations. Nevertheless, policy should also target the consumer, emphasizing insurance and awareness of the risks of flood damage, something that current policy does not do adequately.