By Chase Johnson*
Discussions of wealth inequality and of natural hazards and disasters occupy a significant portion of our national discourse.[i] This is not without good reason; independent of one another, they represent considerable and pressing challenges.[ii] Moreover, these challenges do not exist independent of each other; rather, as natural hazards and disasters become increasingly common, “natural hazard damages […] play an important, growing, and largely hidden role, especially along the lines of race, education, and homeownership,” in exacerbating wealth inequality.[iii] Thoroughly considering such an expansive dynamic seems more appropriate for a dissertation than for a blog post, so this post focuses on the finding that “the more FEMA aid a county receives, the more unequal wealth becomes between more and less advantaged residents, holding all else constant, including local hazard damages.”[iv] To further narrow the topic, it specifically focuses on how FEMA’s buyout program exacerbates wealth inequality, and considers how to mitigate the effect of FEMA’s buyout program.
Natural hazards and disasters, in and of themselves, do not increase wealth inequality. However, the resulting assistance is “designed primarily to restore property, or wealth [… which] means that those with more property as well as more income with which to insure it are likely to experience significantly different recoveries than those with less property and income.”[v] Broadly, for those with more wealth before a hazard or disaster, recoveries may include “access to new resources and opportunities,” while for those without or with significantly less wealth beforehand, recoveries are “more likely to trigger financial liabilities.”[vi] Consequently, the federal assistance after disasters and hazards “disproportionately benefit[s] wealthier Americans.”[vii] This benefit disparity cannot be explained away as merely having those who lost more in a disaster or hazard receive more benefits; rather, “even when controlling for local hazard damage, the more FEMA aid areas receive the more polarized wealth becomes across already unequal individuals.”[viii]
In 1974, Congress enacted the Robert T. Stafford Disaster Relief and Emergency Assistance Act (the Stafford Act), thereby creating the Hazard Mitigation Grant Program.[ix] Under this Act, “The President may contribute up to 75 percent of the cost of hazard mitigation measures which the President has determined are cost-effective and which substantially reduce the risk of future damage, hardship, loss or suffering in any area affected by a natural disaster.”[x] FEMA then created 44 C.F.R. §206.430 – §206.4440 to “provide guidance on the administration of hazard mitigation grants made under” the Stafford Act.[xi] Of these regulations, §206.433(a) and §206.434(c)(5) are of particular interest here; §206.433(a) asserts that “The State will be the Grantee to which funds are awarded and will be accountable for the use of those funds.”[xii] With the state as the Grantee, “while FEMA pays 75 percent of the cost to buy out homes in disaster-prone areas, states and localities decide where they want those buyouts to occur.”[xiii] §206.434(c)(5) defines, as a factor of eligibility for the Hazard Mitigation Program Grant, that projects must be “cost-effective and substantially reduce the risk of future damage, hardship, loss, or suffering resulting from a major disaster.”[xiv] From these regulations, states and localities end up allocating Federal disaster aid “based on a cost-benefit calculation meant to minimize taxpayer risk. That means money is not necessarily doled out to those who need it most but rather to those whose property is worth more—and to those who own property in the first place.”[xv]
In Disaster Law and Equality, Daniel A. Farber considers environmental justice as a potential model for addressing disaster inequality.[xvi] In doing so, he references President Clinton’s Executive Order 12,898, Federal Actions to Address Environmental in Minority Populations and Low-Income Populations, which “provided that each federal agency ‘shall make achieving environmental justice part of its mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of its programs, policies, and activities on minority populations and low-income populations.’”[xvii] Executive Order 12,898’s requirement that each agency pursue environmental justice could readily be recreated with the emphasis placed on addressing disaster inequality.
Such a solution faces two obvious issues. First, such an executive order must be made by the President, with its issuance hinging on the President’s assent. Moreover, even if a president agreed to issue such an executive order, Executive Order 12,898 does not appear to have been effective, with Farber stating that “[i]n any event, the EPA so far has not pursued environmental justice issues with much enthusiasm.”[xviii] This second problem reflects the significance of the relevant agency’s determination to effectuate such an executive order.
In response to the first issue: such an executive order will have to wait for a receptive administration. That likely means waiting until at least one of the following scenarios occurs: either a new administration, with ideology and policy committed to addressing economic inequality and an awareness of disaster inequality, takes office; or the political calculus changes drastically enough to compel an otherwise unreceptive administration to address disaster inequality. In response to the second issue: another executive order from President Clinton, Executive Order, 12,866, Regulatory Planning and Review presents a possible tool for increasing agency enthusiasm. This order empowers the Office of Information and Regulatory Affairs (OIRA), with Section 4 specifically enabling a planning mechanism to “promote the President’s priorities.”[xix] If a President identified addressing disaster inequality as a priority, then “[i]f the Administrator of OIRA believes that a planned regulatory action may be inconsistent with” that priority, the Administrator can trigger further review the regulation,[xx] thereby providing a mechanism for motivating agency alignment with presidential priorities.
*Chase Johnson is an AssociateEditor on MJEAL. They can be reached via email at email@example.com.
[i] Junia Howell, Damages Done: The Longitudinal Impacts of Natural Hazards on Wealth Inequality in the United States, Social Problems, Aug. 14, 2018, at 448, 451.
[ii] Howell, at 449.
[iii] Howell, at 464.
[iv] Howell, at 461.
[v] Howell, at 452
[vii] Rebecca Hersher, How Federal Disaster Money Favors the Rich, NPR, (March 5, 2019), https://www.npr.org/2019/03/05/688786177/how-federal-disaster-money-favors-the-rich.
[viii] Howell, at 464
[ix] 42 U.S.C. 5170(c).
[xi] 44 C.F.R. §206.430.
[xiii] Rebecca Hersher, How Federal Disaster Money Favors the Rich, NPR, (March 5, 2019), https://www.npr.org/2019/03/05/688786177/how-federal-disaster-money-favors-the-rich.
[xiv] 44 C.F.R. §206.434(c)(5)
[xv] Robert Benincasa, Search The Thousands of Disaster Buyouts FEMA Didn’t Want You To See, NPR, (March 5, 2019), https://www.npr.org/2019/03/05/696995788/search-the-thousands-of-disaster-buyouts-fema-didnt-want-you-to-see.
[xvi] Farber, 308.
[xvii] Daniel A. Farber, Disaster Law and Inequality, 25 Law and Ineq. 297, 311-312 (2007).
[xviii] Farber, at 312.
[xix] Exec. Order No. 12,866 §4.
[xx] Exec. Order No. 12,866 §4(c)(5).