99% Invisible - Not Built For This #3: The Price is Wrong

Episode Date: August 27, 2024

Insurance companies are not climate activists, but they know more about climate risk than just about anyone. And as storms get more extreme and unpredictable a lot of insurers are running the numbers on Florida and realizing that the math just isn’t working anymore. For decades, low cost insurance helped mask the risks of living in some of the riskiest parts of the country. However a climate correction is now underway. Prices are skyrocketing. And on America’s riskiest peninsula, residents are beginning to feel climate change where it hurts—in their bank accounts.Not Built For This is a 6-part mini-series from 99% Invisible, with new episodes on Tuesdays and Fridays in the 99% Invisible feed. Listen wherever you get your podcasts. Subscribe to SiriusXM Podcasts+ on Apple Podcasts to listen to ad-free new episodes and get exclusive access to bonus content.

This is episode three of Not Built For This. The price is wrong. And now your hostess on The Price is Right, here she is Arlene Pramson. Hi. Welcome to The Price is Right. Well, Bill Coleridge- The earliest seasons of The Price is Right had a wide range of prizes. There was, of course, your standard game show fare,

things like cars, jewelry, furniture. But some items were more outlandish. So just look over to the left for the first item to go up for bids on The Price is Right. A submarine. Oh! This is from an episode that ran back in 1961. All four contestants are laughing as this submersible appears stage left.

It looks like a life-sized version of something you'd pull out of the bottom of a cereal box. Not exactly sea-worthy. Alrighty. Well now, Mrs. Patrick, we're going to start with you, and you got an airplane last week. Let's see if you can go underwater this week. The minimum will be $100. I think I'll be started at $100.

All right. What do you say, Mr. Talmad? Mrs. Patrick missed out on that submarine, but the last prize of the day was something that all of the contestants seemed genuinely excited about. A home in Florida. A home in Cape Coral, Florida. The living room is spacious, light and airy,

with a sliding glass wall that leads to a screened sun porch. The guessing went on for a few rounds, and eventually the contestants narrowed in on a number. $15,070, and the winner is Mrs. Patrick. When Mrs. Patrick won her home in Cape Coral, the city wasn't even fully built yet. The developers were still in the process of converting miles of swamp and coastal wetlands into a middle-class paradise,

a kind of coastal Leavitt town, where even a schoolteacher could afford to live the Florida dream. Getting here is only the beginning of all the fun and excitement. Wait until you see what's been planned for you once you arrive at Cave Coral. The city is located in southwest Florida,

right where the mouth of the Caloosahatchee River empties into the Gulf of Mexico. And the founders had big plans for the community, not just a subdivision or a small town, but a whole city with canals running through residents' backyards. So many canals that in magazines and radio ads, Cape Coral billed itself as a waterfront wonderland.

Even that home on the Price is Right was a marketing tool. Just one of the many ways the developers tried to reach cold, stricken northerners and retirees who were ready for the good life. For a long time, the promise of balmy winters and cheap housing drew families to Florida, including mine. Jason DeLeon is a 99PI producer and our resident Florida man. Growing up, my parents were in the real estate business, as was my brother, some cousins, and lots of close friends too. Which is very Florida.

So from a young age, I got to see up close how this alchemy of water and sun captivated people. But the Florida Dream is not what it used to be. As you hear this, the state is in the middle of one of the most dangerous hurricane seasons it's ever faced. That's because the seas around Florida are really hot. And that's fueling more intense storms, increasing the potential for destruction. The Florida coast has already been battered by one massive storm this summer, and the worst weeks of hurricane season are still to come.

And all across the state, Floridians are starting to really feel the cost of living on America's riskiest peninsula. Because climate change isn't only generating harsher weather, it's hitting people's bank accounts. For years, the cost of owning a home in Florida has been going up. But nowhere has that change been more dramatic than in the price people are paying for insurance. Insurance companies are not climate activists, but they might know more about climate risk than just about anyone. And as the storms get more extreme and unpredictable, a lot of insurers are running the numbers on Florida and realizing that the math just isn't working anymore.

For decades, low-cost insurance helped mask the risks of living on the coasts of southwest Florida. However, right now a climate correction is underway. Prices are skyrocketing, and in this new financial reality, residents of Cape Coral are realizing that their waterfront wonderland was just not built for this. I'm Emmett Fitzgerald. Jason, we'll take it from here. The story of Cape Coral's insurance crisis really begins with the founders of the city, a pair of hucksters named Jack and Leonard Rosen.

The Rosens were two brothers from Baltimore, self-made, tough. I mean, I admire their story. This is Jason Vuek, the historian who grew up in a town north of Cape Coral. Jason wrote about the Rosen brothers in his book, The Swamp Peddlers. They relied on each other. They fought with each other. They hated each other, but they loved each other as only brothers could. And they grew up. They were both carnival barkers. Like literal carnival barkers.

Step right up. Jack Rosen was the youngest, the big picture operations type. In the various businesses he had with his brother, he was often behind the scenes running the show. Because Leonard, he was a born salesman. A complete and total extrovert who was loud and brash, the kind of guy who was known to show up to board meetings wearing sneakers and tennis shorts. Even if Leonard was kind of a lot to be around, he had a way of drawing people in, a trait that carried over into the Rosen's first major business success in the early 1950s. They sold many gallons of a shampoo mixed in a bathtub

with lanolin. Charles Antel's Lanolin Shampoo. Yes, ladies, a luxurious lanolin lab of shampoo created by Charles Antel to bring a new glamour, a clean, rich softness to your hair. You know, lanolin comes from wool and it's supposed to have illust you know, lustrative power. I don't know what it does, but it doesn't do much.

And it'd say things like, you've ever seen a bald sheep? No. Lanolin. And they made millions. With all the money they made selling this ludicrous hair stuff, the Rosens wanted to strike out on a new venture. Leonard had arthritis, and he heard that the climate down in Florida could be good for him.

And it was on a trip down to the Sunshine State, he noticed something new was afoot in the real estate market. People weren't just dropping in for vacation anymore. They were buying. And so the brothers looked at each other and asked, Why are we selling shampoo for a dollar a bottle when Americans are paying a thousand a lot to move to Florida? And so they moved to Florida. They specifically went to Florida to find land to sell because they were they were getting out of the shampoo business with the money they had made and they were going to go to Florida and they were going for the gold.

In 1957, Jack and Leonard Rosen purchased the first few acres of what would become Cape Coral. For generations, this bit of land on Florida's Gulf Coast belonged to the native Colusa. They built homes and other structures atop these giant shell mounds, which kept them high and dry during the wet season. But when the Rosen showed up in the 1950s, this land was mostly uninhabited swamp — a place that even locals only visited briefly to hunt deer and wild hogs. You know, it was marshy and mangrovey. You know, the mangrove mud, you know, you walk by mangroves, you put your shoe in the mud, you don't get it back. Right? I mean, this is stinky, tough.

It's beautiful Florida nature, but it's not a place that's, you know, you want to hang out much. Still, the Rosens paid no attention to that. And really, neither did anyone else. Local and state officials did nothing to prevent development in these dubious and sometimes dangerous areas. In fact, it was the total opposite. They rolled out the red carpet to developers who vowed to drain these swamps and build

the next suburban paradise. There were no laws about development on county land in Florida. You could build whatever. You could build the Taj Mahal in 1957 without a permit. Nobody would stop you. In fact, they were thrilled that somebody would build out there. The Rosens created a company called Golf American to purchase and develop Cape Coral. And to get the land high enough to reasonably put a house on,

they elevated it five and a half feet above sea level, which is not a lot. I mean, I'm 5'7 on a good day. Still, getting these houses above the water required a ton of manpower and big machinery. Getting these houses above the water required a ton of manpower and big machinery. Down by the Caloosahatchee River, massive draglines and dredges carved the path inland, creating miles and miles worth of canals. Aerial photos of all these waterways snaking through residents' backyards would soon wind up on postcards and in magazines. But they weren't just for show, because the canals are also how the Rosens created the actual land that they would eventually build houses on.

As the dredges work their way through this swampy terrain, they dump all that dirt from the bottom of the river in giant piles alongside it. And because all that crud from the riverbed is free, the Rosens simply graded these piles of muck and voila, land. And so this isn't beach sand that you're pulling up. It smells. It's horrible. Flies. You know, the dead shells, the dead sea crabs, the dead vegetation.

And it was just some of the descriptions from Cape Coral in the early days. It was kind of biblical. Some of the descriptions from Cape Coral in the early days, it was kind of biblical. Developments like Cape Coral destroyed mangroves and paved over wetlands, areas that naturally absorb floodwaters and reduce storm surges. Experts call this land a hurricane buffer zone. But the Rosans and developers all over Florida were tearing these environments apart and building homes there instead. Residential lots in Golf American's new city were sold on installments, $20 down and $20 a month.

In some of the earliest layouts, you can see tens of thousands of home sites color-coded as tiny, equally sized rectangles. color-coded as tiny, equally sized rectangles. At first, Golf American didn't even bother to include space in the plans for a school or a grocery store. They wanted to squeeze as many lots as they could out of this swamp. And as it turns out, there was a real appetite for what they were selling.

We were motivating people to leave their home up north and come down here and live with us. So we didn't tell no lies, we didn't even stretch the truth. This is Joseph Razo, a salesman at Golf American. In an old recording, Joseph spoke about his time at the company selling this new city on the water. When he first arrived, Cape Coral was actually hit by a massive hurricane, ripping roofs off houses and flooding some roads and homes.

But he says that didn't stop the company from forging ahead. The very next day we sold a couple houses and we sold lots of land with the people that came here. Like I said, the people that came down believed in the things we told them. And they believed and they bought it. Golf American's marketing was unlike anything Florida had ever seen. At one point, the company spent more money advertising the Florida lifestyle than the state of Florida did. They hired teams to travel the Northeast and the Midwest.

At local hotels, they'd offer customers free chicken dinners and show them a movie about Cape Coral. Sometimes salespeople would close the deal by the end of the night. And for anyone who still needed a little convincing, Golf American booked them on an all-expense paid trip down to their waterfront wonderland. We used to bring them here by air, by bus, by train, by boat, anywhere that we could bring them here, we brought them here. So it would fly you in and you'd bring your kids and you would stay in their clutches,

so in their hotel, within their bus route, and they had you captive. Gloria Razo Tate is Joseph Razo's daughter. She was just nine years old when the family moved to Cape Coral. And when her dad joined the sales team, she got a job of her own, too. It was just a little more informal. And my sister and I were babysitters. So we would take the kids and say, you would take the kids, the people who came. Yes. Who came on the flying by and take them to the beach.

And, you know, they would be in love with this place. We want to move here. We want to move here. We fed them breakfast. We fed them lunch. We fed them dinner. Prime rib. Never cheap.

I was so sick of prime rib, you couldn't believe it. Once the deal closed, a Gulf American pilot would fly you up into Cessna to show you your slice of paradise. From the sky, customers would see this Pac-Man-like maze of canals and houses. By the late 1960s, Golf American had sold so many lots, it was sometimes hard to tell a customer just which piece of land was theirs. And the pilot has a bag of flour or sugar, and he leans out the window and he goes, your lot is right there.

And he drops the bag and the bag lands on the ground and goes, boof. This pluffle widened, who knows where it went and who knows where that land was. I mean, let's be honest, a lot of people had no clue what they were buying in Florida. But, you know, that's the way it rolled. Jack and Leonard Rosen started out like a lot of other Florida developers, trying to spit shine some swampy land to sell to a bunch of dopes up north. And the plan? It worked. Lots of people started moving to their city.

Between 1970 and 1980, the population of Cape Coral tripled to over 30,000. And as time went on, the land just kept filling in. Today, more than 200,000 people call the city home. But Cape Coral has a problem. One that stems from its original sin. The whole premise of the city was to use canals to put as many single-family homes on the water as they possibly could. Today, it has over 400 miles worth of canals, the most of any city anywhere in the world. However, as the seas rise and storms get worse and worse, what used to be

Cape Coral's biggest asset has turned into its biggest liability. You know, when do these canal front properties that weren't really smart to build in the beginning, now they're downright dangerous to live on? Some huge number of Cape Coral is flood prone as we speak. A recent study suggests that nearly 90% of properties in Cape Coral are at risk of flooding. That's more than 110,000 homes, the most of any city in Florida. The development of all this swampy land was risky even before the effects of climate change became super clear.

But at the same time the Razzos and the Rosens were selling the city, there was another development happening. This time in the insurance market. And it would make it harder for newcomers to really understand the true risks of living in Cape Coral. After the break, how we all ended up paying for the Florida dream. In the 1950s, America was in the middle of the post-war housing boom, and lots of construction was happening. It just wasn't always in the safest places.

That was especially true in Florida, where the Rosens were dredging and filling swamps at warp speed. Those types of changes to the landscape come back to haunt communities because the water still comes and still needs somewhere to go. This is Carolyn Kuski. She studies policy and climate risk at the Environmental Defense Fund. Carolyn says that communities that build themselves on top of wetlands, unsurprisingly, have a greater chance of flooding. And for a long time, if residents wanted to insure against that risk, they couldn't.

No private companies wanted to sell flood insurance because a big flood could bankrupt and actually had bankrupted a lot of insurers. So the cost of helping homeowners rebuild after a flood increasingly fell to the federal government, which found itself paying out loads of money in disaster aid. And there's start being conversations that disaster aid is getting to be pretty pricey for the federal government and insurance would be a way to help spread the cost, but also to encourage better development in our floodplains. And so the sort of national conversation around a potential flood insurance program begins

in the 50s and 60s and then is finally adopted in 1968. The National Flood Insurance Program, or the NFIP, is an insurance program run by the federal government. And one of its main goals was to discourage people from buying in places they probably shouldn't. Residents who purchase flood insurance policies are having to see the cost of risk when they make those premium payments. And the thought is that that is then going to encourage people to be more careful about moving into incredibly risky areas. FEMA, who runs the NFIP, knew it needed a critical mass

of customers to make the program work. Insurance, after all, is a numbers game. The more people you get inside the program, the more you can spread out the cost of a disaster. But at least initially, communities weren't like, hell yeah, a flood insurance. Because as it turns out, it's really hard to get people to buy a thing for something that might happen at some point in the future. So to get homeowners into the program, the federal government did two things.

First, they mandated that if you have a mortgage on a house in a high-risk flood zone, you had to buy flood insurance. Which, you know, that makes good sense. And crucially, they also offered residents living in flood-prone communities a subsidy, or what's essentially a discount. Giving people the benefits of flood insurance, but at a cheaper rate than the actual risk they faced. And so this discount is built into flood insurance prices from the beginning. And the thought was it would phase out quickly as homes turned over, newer homes were built,

and it's supposed to be eliminated if there's major retrofits or anything. And it turned out to be just really sticky. At least early on, there were some good reasons for the discount. FEMA didn't want to punish residents who had already purchased homes in a flood zone, even before the program existed. So the discount was a tool to help ease people in. And it was supposed to eventually go away, but it just never did. And there are other ways the flood insurance program

has underpriced risk. For one, FEMA has historically used flood maps to price premiums, but those maps are notoriously outdated and often fail to accurately identify flood prone areas. So over the years, lots of people with significant flood risk were shown on the map as living in a pretty safe area.

And they ended up getting cheaper rates because of it. The current system greatly underprices flood insurance, which is why it's so great for those of us who buy flood insurance. We think it's great. Bill Spikowski is a city planner who lives just outside of Cape Coral. I think I pay $700 a year for my house. $700 a year for flood insurance. Even Bill acknowledges that this is a bargain.

He says the flood insurance program holds a lot of power over this part of the country. In Cape Coral alone, there are over 27,000 flood insurance policies through the NFIP. And for decades, lots of residents have been getting a pretty sweet deal because flood insurance was just cheaper than it should have been, particularly for the wealthiest homeowners. FEMA knows that its rates have been a problem.

It's just that any time they try to correct them, everyone revolts. As soon as the new insurance rates come out, citizens call their congressmen and the congressmen being elected officials, scream and yell, how could you do this? And they roll it back. The reason FEMA wants to raise rates is because the program runs at a massive deficit to the tune of some $20 billion. So as disasters keep piling on, the program has to borrow from us taxpayers to help pay its obligations. And the NFIP hasn't just been a boon to Florida homeowners, but for local governments who

want to see their cities grow. Local governments have a bit of a perverse incentive to allow excessive development in risky areas because they get the property tax revenue from it. But when those homes are damaged, the local government doesn't pay any of the costs of those damages. So they just get the nice benefits in the safe years and don't have to deal with it. When it floods, it's not their problem. It's on the owner or the federal government. In theory, the NFIP was supposed to act as a disincentive, a tool that would make living in the floodplains pricey and even steer some residents outside of a flood zone.

But in reality, it hasn't worked out that way. The flood insurance program didn't rein in risky development. The discounted policies blinded people to the amount of risk they were actually taking on, which gave people an incentive to move into risky places like Cape Coral. After all, who wouldn't want their Florida dream subsidized by the federal government? Would Cape Coral exist as it is today had there not been a federal program as a backstop to cover against flood loss? Um, I don't... That's a good question.

This is Wyatt Daltry. In addition to being on the planning team for Cape Coral, he's also the city's floodplain manager. I spoke to Wyatt a few months back in a small conference room down in Cape Coral City Hall. As far as the NFIP is concerned, I think we would still exist. I spoke to Wyatt a few months back in a small conference room down in Cape Coral City Hall. As far as the NFIP is concerned, I think we would still exist. I don't think we would be as large. So to some degree, it incentivized a growth in the series.

I think it helped supercharge the growth we've seen in Southwest Florida. The flood insurance program was created to fill a gap left by the private market. And today, a similar dynamic is playing out on the state level with homeowners insurance. A policy that's completely separate from flood insurance and one that's required by lenders on all mortgages. So it affects even more people. Companies that sell homeowners insurance are starting to get really freaked out about climate change. And these businesses are deciding that some places have become so risky that they're effectively uninsurable. So rather than stick around and lose money, lots of companies are choosing to abandon the riskiest locations.

And just like with flood insurance, as those private companies leave, the state has had to step in, creating and expanding their own home insurance programs. 30 odd states now have a state-run program, including California, which is dramatically expanding that program right now to protect the state's economy and protect that growth that's so vital to the economy. A.B.

Rahm Lustgarten is a climate reporter at ProPublica. He says that these state-run home insurance programs act as a backstop, helping to keep lots of at-risk communities financially viable, which is a good thing. But they're also kind of obscuring and uncomfortable truth. Because when the private market says a place is uninsurable, that's a warning sign to everyone living in the area. This place is dangerous. But the state programs send a different message.

They tell you this place is okay, or at least okay enough. And that's sort of the paradox. So we have these systems that have blinded people to risk and encouraged us all to live in very vulnerable places. And so many people have done that, that now we do have a very genuine need to protect some of those people. So on the one hand, as places all around the country face more and more severe climate threats, it's probably not a great idea to keep encouraging people to live in risky areas. But on the other hand, there already are a lot of people in those places. And if the state or the federal government refuse to step in when the private companies

flee, lots of people might be left without any insurance options at all. I own a home in California. I'm petrified of losing my insurance of the prospect of that. So I don't want to see my insurance go away. And if it were to go away, I don't want to see my state offered backstop go away because without it, I don't know what I would do. State-run home insurance programs and low-cost flood insurance have helped protect what is for most people, their most valuable asset.

But they've also compounded a similar problem. They've made it harder for people to really consider the perils of living in a place like Cape Coral. But the risks were always there and they recently became plain for everyone to see. I'm looking for orange car. I see it. It's late August 2023, and I just pulled into a driveway where I'm greeted by Marion Morris. Hello. Hi, Jason.

Yes, yes, yes, yes. You hear my baby? I hear the dogs. Marion lives in Cape Coral with her husband Lloyd and a handful of pets. On the day I visit, the heat index is right around 110, and a classic five o'clock storm is brewing outside. So to get out of this soupy mess,

we move all the pleasantries into Marion's kitchen. There, she offers me some water, and I see a cat poke its head out from down the hall. On a table, Marion points to a very sweet family photo. That was me, believe it or not. That's you right there? Yeah, that's me and that's me. That's my husband. Look what age does to you. Guess what, you're not going to be so cute when you get older. Marion is in her 70s and recently retired. She moved to Cape Coral after her aunt passed away and left her this house.

It's a classic mid-century Florida ranch. Single story with a carport on the side and a lanai in the back. It's actually one of Golf American's original homes. But not just any of the original homes. A home in Florida! That's our home. Oh. Yeah. She lives in the place that was given away on the Price is Right all those years ago.

Oh my God. There it is. Look. I played Mary in the clip you heard earlier on my phone while we huddled around her kitchen table. Did you know? So you didn't know any of that history of the Price is Right? No, and I don't think my aunt did either.

This was 61 or 62. I can't believe it, Price is Right? Marion was born in Ohio, and she first started coming down to Cape Coral in the 70s. That's when her aunt bought the place. I used to drive down here three, four times a year for vacation. To come down and see my aunt and uncle. And how were those vacations? How were they?

Hot as heck. As the years went on, Marion couldn't help but notice all the changes that were happening in the city. More canals, more roads, and lots more people. Every time I came down, I said, oh my God, one of these days God's going to get mad and just bring a big wave and just wash it all away because they kept building and building and building and building. They took beautiful land and just destroyed it.

And that biblical wave that Marian was worried about, it finally came. In September 2022, Hurricane Ian made landfall not too far from Cape Coral. I mean, when it hits the fan, it hits the fan. So this is the first time the water ever came into the house. There's a saying that getting hit by a hurricane is a little like getting run over by a turtle. The days in the lead up to the storm are long. Everyone knows the latest forecast because everywhere you go, there's at least one TV tuned to the local news. You watch as the cone of uncertainty narrows.

You go to Publix. You fill up your car. The storm spins in the opposite direction the clock ticks. You prepare on the off chance that it could be you, but no one ever feels ready when it is. Outside, it came all the way up to the bottom of the windows. To the bottom of the windows. Yeah. And it looked like a little mini tsunami running down the street. So the next thing you know this was also…

You were here the entire time. Well, when you have three cats and two dogs, it's not likely you can run anywhere. Hurricane Ian was the strongest storm the area had ever seen, and one of the worst in the history of the country. It brought not only wind gusts of 140 miles per hour, but a massive storm surge. The Kalushahatchee River overflowed its banks, and so did lots of canals in the city. It was a worst-case scenario. A massive, slow-moving, rain-heavy storm.

In parts of Cape Coral, high water marks were close to nine feet. When we started flooding, I picked up one dog, he picked up the other, and we put him on our tall dressers we had. And I'm sitting there on the one dresser of the chest and looking outside, and suddenly the shed that we had there, I watched the air just blow it apart from the inside out. It just went poof. It was horrible. The floodwater stayed in Marion's home overnight and receded by morning. When it was all said and done, she had two inches of mud to dig out of the house.

She sifted through what could and couldn't be saved, furniture she inherited from her aunt, old remembrances. Anything waterlogged sat at the end of her driveway. We had trash piled up, seven, eight feet tall down around here. All you could see is mounds and mounds of stuff. Together, Marion and Lloyd restored kitchen cabinets, broke down old walls, and put in new floors, work they largely did with their own hands

and with their own money. We didn't have flood insurance. A lot of stuff came out of our pocket. It hit my, a lot of our savings. It really did. It did big time. I won't go into numbers and stuff, but it knocked us on our butt. Marion didn't have flood insurance in part because of some really big changes that the

federal government made to the National Flood Insurance Program. Just a few months before Hurricane Ian, FEMA finally decided to correct the premiums. So now a lot of residents are discovering what it looks like when the price matches the risk. Here's Carolyn Kuski again. FIMO is under pricing risk. And when you start accounting for it, premiums have to go up. And if you're going to have risk-based rates at a property level, they are going to be expensive in high risk areas, like along the Gulf Coast.

And the Gulf Coast is the area where we're seeing the biggest price increases. The NFIP's new pricing model is called Risk Rating 2.0. I know, it sounds a little dystopian. Risk Rating 2.0 more accurately prices the risk of each individual home, almost like a private insurer would. And Carolyn says that one of the counties experiencing the biggest rate hikes in Florida is Lee County,

where Cape Coral is located. The median premium under risk rating 2.0 is going to go up more than 250 percent. FEMA created a glide path for longtime policyholders that gradually increases rates over time. But for residents who just saw their city flood and now want a new flood policy, they're going to have to pay the full, more expensive rate. And some of the people that I spoke with say that 250% actually underestimates the changes they've been seeing. I called last year to see how much it would cost us to get flood insurance.

They wanted $7,000. Marion Morris was among the first citizens whose flood insurance rates skyrocketed. When she called to ask about a policy, it was the month before Ian. Some longtime residents used to pay $500 or $600 for flood insurance every year. But Marion's $7,000 quote would have meant an extra $500 or $600 coming out of her pocket every month. For two seniors on a fixed income, they just couldn't swing it. So they didn't have flood insurance for one of the worst floods ever. They had to rebuild their home with their own money, and they still don't have insurance

to protect them from the next flood. When I spoke to Marion, she sounded defeated by the whole thing. The recovery, the financial gymnastics, the anxiety of summer, it's all just been too much. I'm just going to have to put it in God's hands. If it floods, it's not going to do me any good. You know, there's nothing I can do. You know, grin and bear it.

That's all. That's what we do. Everyone's having insurance issues. And insurance has become a nightmare in Florida all the way around. Again, Gloria Razo Tate, the daughter of Joseph Razo, who worked for the Rosens at Golf American. In addition to being one of the first residents of Cape Coral, Gloria has made a name for herself in the city. She's the owner of Razo Realty and has continued the tradition of her father, selling the Florida dream.

Back when Hurricane Ian hit, Gloria was also on the city council, representing the oldest part of the city and the one most affected by the hurricane. I mean, it's a year later and people are still not satisfied with their claims or still working through it. Gloria tells me that insurance, almost more than anything, has people reconsidering moving to Cape Coral. As a realtor selling property, I just shudder when I have to tell someone that they need flood insurance and where it's going to go.

Have you seen that influence people in making decisions? Absolutely. Absolutely. Gloria worries that because risk rating 2.0 is so aggressive, eventually FEMA will place the entire city in a flood zone, which could dramatically increase the number of people with mortgages who'd have to purchase very expensive flood insurance. And Florida's state-run home insurance program, they're planning to increase rates too.

Not exactly because of climate reasons, I don't know if you've heard, but the governor isn't really about that, but because he wants more people buying private insurance and getting off of the state's back. All of the experts that I spoke with for this story say that one of the first steps in untangling

this insurance problem is to eventually price insurance accurately so that it reflects the amount of risk a homeowner is really facing. And that is starting to happen. It's just the way it's happening, it makes it almost impossible for people like Marion and Gloria, residents with roots in Cape Coral, who built a life here precisely because of its affordability. And that's one of the main criticisms of Risk Rating 2.0, that this new policy is going to hurt places like Cape Coral disproportionately, especially the working class people who live

there. And it has. But that's also because that's kind of the point. It's supposed to hurt. In that respect, the 2.0 and the FEMA maps and all of that, they are here to protect us. It's just they weren't here at the beginning. And the retrofit can bankrupt most people.

The retrofit is painful. The retrofit is painful, yeah. Gloria tells me that since the hurricane, people have had to make some really hard choices about where they live. Including her. Because Ian destroyed her home too. I had almost four feet of water in my home. A sewer line break.

I had a 62-year-old tree that fell in the middle of my house and that was that. I was in shock. So it took me a few days to actually wrap myself around it, what had happened. And meanwhile, I was on the city council responsible for an entire city, also a realtor trying to find people housing and it was a nightmare come true. In the aftermath of Ian, Gloria wanted nothing more than to rebuild her home. But it was right on the coast and subject to something called the 50% rule. The 50% rule is yet another FEMA regulation that made life after the storm harder for residents.

The idea is that any home in a high-risk flood zone that's damaged by more than half of its value needs to get rebuilt up to the latest building codes. Which for older homes in Cape Coral like Gloria's, more often than not means elevating the whole house a few feet. The rule is in place to force communities in risky areas to build back better. The rule is in place to force communities in risky areas to build back better, so that the next time another hurricane comes around, the home has a better chance at surviving the storm. Here's Wyatt Daltrey again, Cape Coral's floodplain manager. No one likes the rule. We understand it.

It's a good rule, just a rule that no one likes. After the storm, Wyatt's job only got harder. He spent months sending out letters to people to tell them their homes were too badly damaged and that if they wanted to rebuild them, they'd need to elevate the entire house. An extremely expensive proposition. He spent hours on the phone getting yelled at. It's hard telling people, you know, well, you've had this tragedy occur to your home.

Now we're like compounding that by saying, well, you're going to have to make a very important decision. What I find so interesting about the 50% rule is that it gets to the heart of attention in how we respond to climate change. Of course, we want public policy to encourage citizens to build back with the future in mind. We want a government that for once is being proactive instead of reactive to what's happening in our new climate. But we also want a government that takes care of its people.

And the 50 percent rule shows how after a storm, it's hard to do both of those things at the same time. Bill Spikowski, the local city planner, told me that long term thinking around Southwest Florida is hard and damn near impossible after a storm. Understandably, people just want to get back into their homes. So when you get a letter from Wyatt saying you need to do X and Y and Z. Nobody can hear that as a good thing. They can only hear that as the government stomping on us.

How did you hear that as someone who lives in this area? I feel it both ways. So I'm often on the person trying to answer the question, what do we do about climate change? But I've also personally been through two really, really bad hurricanes, and I have friends and neighbors, lots of them, who've been through this. And I'm just completely torn, because I think, you know, like, both are true, yet how can both be true?

How can it both be the right thing and completely the wrong thing? Do you make this easier on the citizens of your community, or do you take the big picture view that everybody should rebuild the pyre because the waters are coming up? Do you make this easier on the citizens of your community, or do you take the big picture view that everybody should rebuild the pyre because the waters are coming up? For people like Gloria, the 50% rule is what stood between her and rebuilding her home. The last place she ever lived with her husband. One of the first quarter acre lots the Rosen brothers ever built. To her, it was a home with a lot of personal history

and history to the city, even if it was only slightly above sea level. Still, Gloria knew elevating the house was just one of a seemingly endless number of things the home needed to be lived in again. New walls, new floors, new everything. I took it down to the studs and then I just sold it for land value. Gloria told me that she wanted to rebuild the right way,

getting the home up to the proper building standards. But after the storm, she looked around the city and saw lots of people who had a massive amount of damage just putting their homes back together again. 50% rule be damned. Did you elevate? No. Did you do this? No. Where are your permits? I didn't get them. And lots of homes in these areas are being fixed and rebuilt and they're not going to be insurable. A few months ago, FEMA actually put out a statement saying that a bunch of residents in Cape Coral violated some floodplain regulations, including the 50 percent rule.

The city did push back, but unless it somehow addresses the problems FEMA found, flood insurance could get even more expensive for all of the residents of Cape Coral. flood insurance could get even more expensive for all of the residents of Cape Coral. Bill says that as insurance prices keep creeping up, an interesting phenomenon is taking shape in some of the riskiest parts of southwest Florida. It's not just the poor and the working class who are forgoing coverage, but increasingly rich folks are opting out too. Which if you're wealthy, you can self-insure, which means really having no insurance. After Hurricane Ian, lots of big corporate money moved into the places that were the

most severely hit and bought homes in cash, which means they don't have to have flood insurance or really any insurance at all. They can just take the gamble and hope that maybe FEMA comes in on the back end to help them out when the next storm rolls through. So what you have is people of means moving in and swooping in in these areas that have been hit by disasters because they're the only ones who can afford to do it. And that's just going to be getting worse and worse.

You see that happening here? Absolutely, it's already happening here. worse. You see that happening here? Absolutely. It's already happening here. This past February, on my last drive through the city, I took a trip down to Cape Coral's most southern point, where the Rosens first broke ground nearly 70 years ago. I just when I drove through here in August, it was not this packed. There's just a lot of people here now. It was an absolutely gorgeous day. A real reminder of why around here, it's so easy to forget the last storm.

On one road down by the water, construction crews were hard at work on nearly every home, still rebuilding from Hurricane Ian almost two years later. A lot of places still under construction, some new construction going on. I took this drive because I wanted to see Gloria Razotate's old home, the one she had to gut and sell after four feet of river destroyed it, the place where she lived for 27 years before a wall of water took it all away. So this is Gloria's old home. Used to be a tree in the middle no longer, but it looks like it's been touched up, redone.

The home looked new, and notably, it had not been elevated. Still flat as a pancake on the same ground, Golf American dredged out of the depths of the river a few feet away. Later, while digging through some public records, I saw that Gloria's home was actually purchased by an LLC, one of those investors who swooped in, using the storm as an excuse for a good deal. I drove in a loop around Gloria's old block, counted seven homes

listed for sale on her street alone, with I'm sure a lot more to come. I exit the loop and I'm back out on the main road. I think about the Florida that I grew up in and the one that I'm driving through, and I can't help but feel that we're approaching the end of an era, a time when we manipulated enough land and finances to make a place like this make sense. Because on this one block, in this one corner of the city where the Florida Dream started, it didn't look like paradise. It looked like a relic. As if I was already seeing it in the past tense.

Next time on Not Built For This… Flood risk is increasing all across the country as the climate changes and people continue to move into flood-prone areas. That line of risk is going to be growing for our lifetimes and our children's lifetimes. We have locked into warming and sea level rise that's going to continue. We don't have good policy answers yet for how to handle that. But more and more, policymakers are coming around to the idea that we might need to start abandoning some of the most risky places altogether, and get the people living there out of harm's way.

Which is a lot easier said than done. We don't know how to equitably unbuild in high-risk areas, and I think this is going to be our problem for decades. In our next episode, we head to southwest Louisiana to see what it looks like to unbuild a flood-prone neighborhood and the bittersweet, painful process known as managed retreat.

I said, well, it's like a bulldozer to go straight through right now, pull it right out. I don't care. There's no emotional attachment to the house anymore. This episode of Not Built For This was reported and produced by Jason DeLeon and me, Emmett Fitzgerald, along with producers Sophie Coddner and managing editor Delaney Hall. Further invaluable editing from Christopher Johnson, Joe Rosenberg, Kelly Prime, and of course our captain Roman Mars. Mix and sound design by Martín González. Theme

and original music by George Langford from Actual Magic, with additional music by Swan Rayall. Fact-checking by Graham Haysha. Series art by Aaron Nestor. A very special thanks to Deborah Hendricks at the University of Florida's Samuel Proctor Oral History Program, and to David Dodrill, who interviewed and recorded

a lot of the former employees at Gulf American. His book, Selling the Dream, offers the most comprehensive set of first-person accounts from early residents of Cape Coral. Another big thanks to everyone who spoke with us for this story and specifically Jason Pym, Cheryl Anderson, Max Forgey, Joseph and Paul Bonasia, Wayne Daltrey, and Craig Pittman. Not Built for This is a six part series from 99% Invisible. New episodes will be coming to you in the 99PI feed on Tuesdays and Fridays, wherever you get your podcasts.

Kathy Tu is our executive producer. Kirk Holstead is our digital director. The rest of the 99PI team includes Chris Perube, Vivian Lay, Lasha Madon, Gabriela Gladney, Jacob Maldonado-Medina, and Nina Potuck. The 99% Invisible logo was created by Stefan Lawrence. We are a part of the Stitcher and SiriusXM podcast family. You can find 99% Invisible on all the usual social media sites, as well as our new Discord

server. There's a link to that, as well as every episode of 99PI and Not Built For This, at 99pi.org.