The National Flood Insurance Reform Act (NFIRA) was passed into law on September 23, 1994. Section 577 of NFIRA required that the Federal Emergency Management Agency (FEMA) conduct an “Evaluation of Erosion Hazards” study that examines the economic impact of erosion and erosion mapping on coastal communities, and on the National Flood Insurance Program (NFIP). The purpose of the study is to determine whether erosion hazard areas should be mapped for risk delineation, floodplain management, and the establishment of flood insurance risk classifications that more directly reflect the effects of long-term erosion in the NFIP premium rates.

FEMA conducted the study in two phases. The first phase required that FEMA map erosion hazard areas in 27 coastal counties distributed among 18 states. The second phase focused on the economic impacts of erosion. In order to conduct the first phase of the study, FEMA enlisted the aid of Coastal Zone Management programs to conduct erosion hazard analyses and mapping for the 27 coastal counties. The second “economic impact” phase of the study was contracted to the H. John Heinz Center for Science, Economics and the Environment, and was completed in April, 2000.

Some important findings of the study are that: (1) assuming no additional beach nourishment or structural protection, roughly 1,500 homes and the land on which they are built will be lost to erosion each year; (2) the cost of identifying, mapping, and disseminating information on the erosion hazards is about $44 million, and (3) about 87,000 homes are located within the 60-year erosion hazard area. Of these structures, 61% are located along the Atlantic Coast; 15% are located along the Gulf of Mexico; 5% are located along the Pacific Coast; and 18% are located along the Great Lakes.

The report makes two recommendations: they are that FEMA should develop erosion hazard maps that display the location and extent of coastal areas subject to erosion, and that FEMA should include the cost of expected erosion losses when setting flood insurance rates along the coast. FEMA has formed an internal working group to investigate the recommendations and policy options proposed by the Heinz Center. In addition, FEMA is developing (following a Congressional directive) a national plan to develop erosion hazard maps.