Joel Kotkin is an Irvine Senior Fellow at the New America Foundation and is the author of The City: A Global History (Modern Library, 2005). In this Opinion Journal op-ed, he compares the disparate preparations of New Orleans and Houston to the two recent hurricanes, and makes several useful recommendations regarding planning for natural disasters and development of urban areas on the Gulf Coast, including the following:

[The Gulf Coast region], with the notable exception of New Orleans, is one of the fastest growing in the U.S. Its relatively low costs and balmy climate have turned it into the “opportunity coast.” Yet clearly the Gulf’s history has shown that ignoring nature has its perils. Few now remember Indianola, south of Houston. Until it was wiped out by hurricanes, first in 1875 and then again in 1886, it was Texas’s second-largest port. Today, most of that city lies under water.

The other, better-known case, is Galveston. Before a 1900 hurricane–which took 6,000 lives–it was the premier port and commercial center on the Texas coast. After the hurricane, the flow of commerce shifted inexorably to inland Houston, which was, and remains, better protected from the Gulf’s annual tantrums. Such lessons should guide development along the Gulf in the coming years. For one thing, it may make sense to use marketplace mechanisms — in the form of insurance premiums — to let developers accurately assess the risk of new development. After all, federal assistance may be limited in the future. Some places may need to be abandoned. Whole towns already have been demolished for safety reasons in parts of the Mississippi flood plain as have homes in some of the riskier parts of east Texas. Programs to buy houses from existing residents, move towns to higher ground and create new greenbelts, will benefit the environment–not to mention the taxpayers–by relieving them of the burden of subsidizing repeatedly flooded areas.
A less extreme but equally sensible course can be applied throughout the Gulf region by steering new development–through either environmental or insurance restrictions–further out into the interior.
More broadly, as a nation, we may want to consider ways to encourage greater development further inland. Americans have been crowding into the coasts for generations, even though one of our great assets is the broad interior hinterland. Our continued population growth — from 310 million now to 400 million by 2050 — may make repopulating the hinterlands more economically viable. Instead of offering “homesteads” or funds for repeated rebuildings on the crowded, and sometimes dangerous, coasts — particularly in below-sea-level New Orleans — it might make more sense to encourage settlement and investment deeper into our nation’s interior.
This was the essence of much of 19th-century federal policy, which gave incentives for canals and railroads, as well as providing cheap or free land on the Plains. This could also bring new life to parts of country that have been losing jobs and people for a generation, but may now be ready for revival. With the Internet and small-jet travel, some of these areas, such as the Dakotas, are already showing signs of becoming more competitive in the national and global economy. It is a trend worth boosting, and may come to be the most attractive strategic lesson to emerge from Katrina and Rita.

Read the entire piece. Mr. Kotkin makes a valid point, which is that the federal policy promoting development of coastal areas — accomplished through such mechanisms as federal subsidies of flood insurance and related federal bailouts of storm-ravaged areas — distorts rational economic decision-making. Let’s rebuild New Orleans, but on a rational basis and without the distorted decisions that often result from the incentive to grab well-intended but counterproductive federal handouts.