Incentivizing Inaction: Federal Aid, the Local Economy, and Floodplain Development
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Purpose: Scholars have suggested that federal disaster relief in the U.S. may have the unintended consequence of incentivizing the neglect of hazard mitigation at the local level by allowing local jurisdictions to shift the costs of disaster to the federal government. The purpose of this study is to evaluate the impact of federal aid on the local implementation of restrictions on development in hazardous areas, while controlling for other key local economic barriers to this mitigation type. Method: Forty-seven cities in Texas participating in the Community Rating System program were selected for this study. Data on land area outside of the floodplain, receipt of federal public assistance aid, and reliance on property tax revenue was collected for each city and analyzed using multiple regression. Results: The findings did not support an impact on local floodplain development restrictions as a result of federal aid, reliance on property tax revenue, or land outside the floodplain. Comments: In contrast with findings by other scholars, Texas cities did not appear to base their decisions to restrict development in hazardous areas on availability of federal aid. This suggests that federal aid is not causing local governments to balance cost and risk in a way that would lead them to ignore mitigation aimed at restricting development of the floodplain.