The cost of stilts

I borrowed this post from Hypothetical Bias (the cromulent economics blog). It illustrates why people will always live in dangerous areas and, when there, won't self protect themselves and ... if you read the whole NYTimes article from awhile ago... how local governments are co-dependent on this behavior.

From the NYTimes, Residents Fight Shift in Zoning for Gulf Coast:

Standing on the slab that was once her Gulf Coast retirement home, [name withheld from this blog] has a clear vision of her own Hurricane Katrina counterpunch: a new seaside estate, with a wraparound veranda, a sunroom and a small wading pool out front.

Central to this rebuilding plan is [name withheld] intention to ignore a plea from the Federal Emergency Management Agency that her new home be elevated on stilts.

"At my age, I don't want to have to go up steps," said [name withheld], 69, a retired middle school teacher. "I want to be able to walk in at ground level."

...

Raising a new house off the ground to comply with the proposed FEMA standards would cost $2,000 to $30,000 depending on the value of the house and the type of foundation required to meet the potential flood intensity.

For a $300,000 homeowner in the 100 year floodplain, the annual benefit of the stilts is $3000. At a 10% discount rate in perpetuity, the present value of the benefits is $30,000. At the upper end of the stilt cost range the benefits are equal to the costs. Decreasing the cost of stilts, increasing the value of the home or decreasing the discount rate would make the stilts cost-effective. These all seem to be reasonable adjustments to make (at the upper end of the stilt cost range).

Unless you consider the cost of the wear and tear on your knees.

Each resident that chooses not to build on stilts should be forced to watch The Weather Channel's Storm Stories at least once.

From the NYTimes, Residents Fight Shift in Zoning for Gulf Coast:

Standing on the slab that was once her Gulf Coast retirement home, [name withheld from this blog] has a clear vision of her own Hurricane Katrina counterpunch: a new seaside estate, with a wraparound veranda, a sunroom and a small wading pool out front.

Central to this rebuilding plan is [name withheld] intention to ignore a plea from the Federal Emergency Management Agency that her new home be elevated on stilts.

"At my age, I don't want to have to go up steps," said [name withheld], 69, a retired middle school teacher. "I want to be able to walk in at ground level."

...

Raising a new house off the ground to comply with the proposed FEMA standards would cost $2,000 to $30,000 depending on the value of the house and the type of foundation required to meet the potential flood intensity.

For a $300,000 homeowner in the 100 year floodplain, the annual benefit of the stilts is $3000. At a 10% discount rate in perpetuity, the present value of the benefits is $30,000. At the upper end of the stilt cost range the benefits are equal to the costs. Decreasing the cost of stilts, increasing the value of the home or decreasing the discount rate would make the stilts cost-effective. These all seem to be reasonable adjustments to make (at the upper end of the stilt cost range).

Unless you consider the cost of the wear and tear on your knees.

Each resident that chooses not to build on stilts should be forced to watch The Weather Channel's Storm Stories at least once.