The Feds acting in a sensible way is practically an oxymoron. But I think the tendency of people to aggregate around large cities has major causes other than Interstate highways. People like the large number of services you can get in a big city, even if they don't like to live right in the city.
A different aspect of encouraging people to live in dangerous areas is federal flood insurance subsidies. It's been a while since I've looked into the issue, so I don't recall whether the subsidy is direct or regulatory, but either way people get to live in flood-prone areas for less than it would cost them otherwise, so the stay-away economic signal that a disaster-prone area would otherwise have is muted. In many of these areas it's well-to-do people with beachfront property who get the subsidy.
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zvi and
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Date: 2006-06-03 11:18 am (UTC)A different aspect of encouraging people to live in dangerous areas is federal flood insurance subsidies. It's been a while since I've looked into the issue, so I don't recall whether the subsidy is direct or regulatory, but either way people get to live in flood-prone areas for less than it would cost them otherwise, so the stay-away economic signal that a disaster-prone area would otherwise have is muted. In many of these areas it's well-to-do people with beachfront property who get the subsidy.