This is a tough one since anyone with an ounce of empathy has to feel for those who are flooded out in Houston.
Some folks had flood insurance through the government (a program that we have argued should be ended) but others have nothing. Homeowners insurance generally does not cover flood damage. These people are in a bind, and probably out of luck.
As aid money flows into Houston it would be unwise to use that money to rebuild in areas prone to flooding. It’s not a good use of resources. As soon as a house is rebuilt in a flood zone the clock starts ticking again. It is only a matter of time before another flood comes. Then we will have to do this all over again.
We need to examine the flood insurance program and our approaches to flood aid. Re-re-rebuilding structures in flood prone areas is just not smart. And it is expensive for the taxpayer.
“You could basically argue that people who live in these … live there at your own risk,” the chairman and CEO of Starwood Capital said on CNBC’s “Squawk Box.” “The people who live in the mountains of Denver — should they be paying through their tax dollars for relief to people whose homes got wiped out” in hurricanes Irma and Harvey?
Sternlicht stressed he wasn’t saying homeowners shouldn’t receive humanitarian aid. “[But] the private [insurance] market should be able to work this out,” he argued, as opposed to the government’s National Flood Insurance Program. Starwood Capital, a global investment firm specializing in real estate, has $55 billion in assets under management.