Property Rights and Flooding, Part 3

For the past 2 days I have examined the principle of “first come, first served” and its application to land use and flooding. My examples involved relatively simple situations, in which the number of property owners was limited and easily identified. Today I will begin to look at how this would apply to a more complex situation—flooding in Houston.

To set the context, this discussion was originally motivated by the efforts of the Harris County Flood Control District (HCFCD) to purchase homes along Hunting Bayou for the purpose of widening the bayou. Many home owners are reluctant to sell. When I challenged this, a reader asked why the rights of a few—the reluctant home owners—should supersede the rights of the many—those whose homes will be protected from future flooding.

Despite appearances, and the wording of my reader’s questions, there is no conflict between the rights of the respective property owners. Rights pertain to action—the freedom to act without interference from others. Only the use of force can prevent an individual from acting as he chooses; it is only through the use of force that an individual’s rights can be violated.

The reluctant home owners are not using force. They are simply refusing to provide their consent. They are not compelling those who might benefit from the HCFCD project to stay in their home, nor are they prohibiting those potential beneficiaries from taking other actions to protect their property. In the absence of force, it is a gross misrepresentation (to be kind) to claim that the reluctant home owners are violating anyone’s rights.

HCFCD however, is violating the rights of taxpayers throughout its jurisdiction. Those taxpayers are forced to pay for HCFCD projects, regardless of their individual judgment, consent, or potential benefits. And, while it is unclear how HCFCD will proceed if the reluctant home owners continue to refuse to sell their homes, the use of eminent domain to seize those properties is likely. In short, it is a government agency that is engaged in the violation of rights, not the home owners.

Flood control is not a proper function of government. HCFCD should be abolished. Any flood control efforts should be undertaken by private individuals and businesses. Further, those who take actions that damage the property of others should be held accountable.

As discussed yesterday, if an individual develops his land in such a way that it will cause bayous to fill more rapidly, and thus flood homes, then he must take efforts to prevent this from occurring. He must build retention ponds, decrease the size of his development, or take other actions to mitigate the damage. If his efforts are insufficient, then he would be responsible for the resulting damages.

Some may find this problematic. The developer could complete his project, collect his money, and ride off into the sunset long before damages occur. The damaged parties may find it difficult, if not impossible, to sue the developer. If we drop the context, this would certainly seem to create an unjust situation.

A responsible business does not invest millions of dollars into a project without giving considerable thought to the consequences. A responsible developer would not buy land, clear it, build infrastructure, and attempt to sell that land without identifying and addressing potential liabilities. If he did not do so, the market would devalue his development and he would have difficulty selling the land to builders. In addition, he may find it impossible to purchase insurance.

In this context, insurance companies play an unheralded role. Because an insurance company must pay when damages occur, they take great strides to reduce the likelihood of damages. The insurance company’s desire to profit—to collect premiums and not pay claims—will motivate it to require the developer to take reasonable efforts to mitigate the possibility of future damages. The insurance company would refuse to insure a project that stood a strong likelihood of massive future claims.

This does not mean that the developer or the insurance company must be omniscient or infallible. This is an impossible standard. It does mean that they must examine the known facts and judge them accordingly. Despite the best efforts of these businesses, flooding may still occur. But the same is true of our current rights-violating system.

The principle of “first come, first served” provides us with clear guidelines in regard to new development. But what of existing development? What of areas that are heavily developed and prone to flooding, such as neighborhoods around White Oak Bayou, Braes Bayou, and Hunting Bayou? Can we apply the principle of “first come, first served” to these situations? This will be my topic for tomorrow.