Communities are critical in setting standards, said Sathe. Federal standards are unlikely anytime soon, while local communities have immediate control over such basic factors as building codes, permitting, and enforcement. This is one of the ways in which something nebulous and fuzzy like social capital and community engagement has a real effect, said Sathe. Local communities also can deal with the realities of retrofits. For example, an improvement costing a couple of thousand dollars may not sound like a lot, but in New Orleans many people live from paycheck to paycheck and could not afford such an improvement. Banks may be able to finance such an improvement, but people in strained circumstances do not necessarily have the credit to qualify for financing. One way to finance such improvements might be through monthly charges such as those for utilities. Localities are well positioned to price capital improvements and have a vested interest in providing such improvements competitively.
ADDING ACCOUNTABILITY TO AVAILABILITY AND AFFORDABILITY
Later in the workshop, Michael Chaney, the insurance commissioner for the state of Mississippi, also addressed issues associated with insurance and building codes. All of the states along the Gulf Coast face a similar challenge, he said. Homeowners and business owners need insurance that is available, affordable, and accountable. “I say ‘accountable’ because it means if you have a valid claim, then the claim will be paid in the context of catastrophic events, whether hurricanes, earthquakes, or whatever.”
Most people in Louisiana and Mississippi are experiencing sticker shock in buying insurance, and “there is no silver bullet to solve the problem.” If people build along the coastline, they have to build to a high standard, said Chaney. Roofs need to withstand category 4 hurricane winds. The frame of a house needs to be attached to a conventional foundation or slab with metal straps. Shutters, windows, and doors need to be reinforced.
Mitigation also means not building in a floodplain. That is a problem for New Orleans, Chaney acknowledged, but proper land use generally means not building in wetlands.
Building codes also need to be enforced. Chaney is in an unusual position because he became state insurance commissioner after helping to write a new building code law for the state, so he became responsible for enforcing his own law. One response has been to train building inspectors in the enhanced codes adopted in the state. Compliance rates are about 30 percent for the state, and compliance is mandatory in the five counties closest to the Gulf. “You have stronger building codes and you enforce them—it’s that simple.” When complaints about enforcement arise, Chaney points out the many steps the state can take to ensure adherence to codes. “You enforce the code and you reduce your risk. And you try to price the risk to the premium that you’ve got to pay to have insurance.”