Tuesday, August 21, 2012

All up in the Kool-Aid...

When I was a kid in South Florida, rockin' out to Rage Against the Machine and suffering the atrocities of authoritarian governance by persons over 30, I learned an expression: "All up in the Kool-Aid and you don't even know what flavor it is."  The expression suggests, that while one has become a participant in a situation or debate he has missed the context and matter being discussed.  Hence, his tongue is stained purple but couldn't tell you if he was slurping up cherry, orange, or grape.

The expression has served me well over the years. In my studies of science policy and politics, it seems to be fitting to many policy issues where interest groups seeks to frame a debate that enables them to put their sticky fingers into a pot that originally had nothing to do with them.  Generally, this serves to complicate matters and slow, if not halt, the democratic process of decision making.

Which brings me to advocacy groups, like ClimateWire, that like to stomp their feet and point fingers at Citizens Property Insurance Corporation on behalf of the private insurance industry and climate change. Let me just say, "You're all up in the Kool-Aid and you don't know what flavor it is."  But perhaps with that stained mouth grin, it need not matter.  The sugary liquid smells like money and like flies at a picnic, they're all over it.

Today, ClimateWire, a purveyor of information on "the debate over climate policy and its effects on business, the environment and society" put out an article commemorating 20 yrs since Hurricane Andrew.  The majority of the article demonstrates the very soul of Florida's hurricane insurance woes, conflicting feelings about the traditional means of creating wealth in Florida- building and land development.  That is, the debate about windstorm rates is actually a debate about Florida's future direction in producing wealth.  Hence, David Hart, the executive VP of the Florida Chamber of Commerce, argued that the Citizens' Board should be allowed to raise rates in order "[t]o secure Florida's future" in whichever direction it is that he perceives to be desirable.

ClimateWire also demonstrates that hurricane risk alone does not sway building trends leading the III's president, Robert Hartwig to proclaim, "Andrew has had basically zero effect in terms of diminishing demand for at-risk property." ClimateWire claims that the reason for this is historically "low" insurance rates.  And today, these rates are provided by Citizens and therefore Citizens is a problem... and a threat to the environment.

But here is where they miss the Kool-Aid flavor, there is no reason to believe that Andrew or any other hurricane would encourage changes in land development or that it should.  Feelings about risk are largely subjective and Floridians seem to sit comfortably with the chance of hurricane landfalls.  Florida has had devastating hurricanes since before it was known to the spanish as La Florida. Yet, here we are, several million people later on a heavily metropolitan peninsula.

As well, since Andrew, insurance rates have become "permanently higher."  Between 2000 and 2010, Florida exhibited over 50% increase in "burdened" households, about a 13% decrease in homeownership between 2005 and 2010, and a nearly 18% vacancy rate in 2010.  But the number of housing units in the state steadily increased (data here).  And extravagant developments are continuously being planned.  However they are not being sold to Floridians but to foreign investors who pay cash (see the FT here and here and the following link).  The Miami Association of Realtors claims that international clients bought about 60 percent of existing houses and condos and 90 percent of newly built homes.

Land development policy sways building trends.  Rate policy does not.  Florida's land development policy has long been to build, rebuild, and build some more.  We may come to debate as to whether or not Florida's land development policy is still a good one.  But, to use rate policy as a means to influence building policy is not only ineffective but against publicly held values and public policy of providing affordable insurance and affordable housing.  And to argue that Florida's windstorm rate policy or Citizens has any relation to climate change is to miss the context and heart of the 20 year running rancorous and truly difficult debate about how best to manage the state's insurance regime and its future.

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