Improving Affordability Through Smart Disaster Mitigation and Informed Development.
Families, businesses, and taxpayers across the United States are facing rising disaster costs and increasing insurance premiums. As extreme weather and disaster losses grow, strengthening preparedness before disasters occur is one of the most effective ways to reduce losses, protect households, and support more stable insurance markets over time. Evidence consistently shows that investments in mitigation reduce disaster damage, lower recovery costs, and ultimately save taxpayers money.¹ Locating new development outside of risky areas is also critical to ensure efforts to address issues like housing affordability do not inadvertently put people and infrastructure at risk.
Policies that promote stronger homes, smarter land use, and pre-disaster preparedness can reduce risk, protect property, and improve insurance affordability. Congress has an opportunity to advance bipartisan solutions that help communities invest in mitigation and informed development before disasters strike, responsibly addressing the affordability crisis and delivering long-term taxpayer savings.
Why Mitigation and Informed Development Matter for Affordability.
Pre-disaster mitigation investments provide significant returns. Post-storm research from FEMA and many states shows mitigation costs are often far lower than the disaster losses these projects help to avoid, even after a single extreme event, and that the returns of mitigation projects become even more significant over the lifetime of a project.² These savings can translate into reduced federal disaster spending, lower rebuilding costs for families, and support for more stable insurance markets, particularly where mitigation is verified and risk is meaningfully reduced. For example, FEMA’s Community Rating System provides flood insurance discounts of up to 45 percent for households in communities that adopt stronger proactive flood mitigation measures, directly addressing affordability by lowering the cost of homeownership for participating residents.³ In fact, the National Institute of Building Sciences (NIBS) estimates that more than one-third of the economic benefits from federal mitigation grants come from avoided property damage, helping households avoid costly repairs and rebuilding after disasters.4
Programs that strengthen homes and infrastructure also demonstrate real-world risk-reduction benefits and, in some cases, can improve insurance availability and affordability. Alabama’s FORTIFIED roof program, for example, helps homeowners install stronger roofs designed to withstand severe storms and has helped reduce damage and insurance losses in participating communities.5
The most effective way to mitigate future disaster risk is to avoid locating new development in vulnerable areas. For example, while limited housing availability is a major contributor to current affordability challenges, increasing housing stock through risky development will only exacerbate affordability issues due to the unavoidable costs of living in hazardous areas with mounting extreme weather and disaster risk. It is critical that Congress support updated risk information and advance policies to support smarter land use. Doing so will help ensure communities address housing affordability and other development needs without inadvertently putting people and infrastructure at greater risk.
Congressional Priorities to Improve Affordability.
- Support mitigation incentives for homeowners.
Congress should pass the Disaster Mitigation and Tax Parity Act of 2025 (S.336/H.R.1849) to ensure that payments from state mitigation programs, including grants for stronger roofs or wildfire hardening, are not treated as taxable income. This will encourage greater participation in risk reduction programs. - Expand tax-advantaged savings for disaster resilience.
The READY Accounts Act (H.R.440) would create tax-advantaged accounts that allow homeowners to save for mitigation improvements, such as impact-resistant windows, roof strengthening, and elevation projects. These investments help households reduce risk before disasters occur and can lower long-term recovery costs. - Strengthen federal pre-disaster mitigation investments.
The Building Resilience and Stronger Communities Act (S.3403) would expand federal support for hazard mitigation projects and increase cost-sharing for smaller resilience investments. Increasing access to pre-disaster mitigation funding can help communities address risk earlier, reducing disaster losses and improving long-term affordability. - Investing in Community Resilience Act.
The Investing in Community Resilience Act (S.372) would empower FEMA to create financial incentives for communities to proactively invest in preparedness measures and informed land use decision-making. Such efforts are critical to ensure communities take steps to mitigate risk before disasters strike and avoid locating new development in risky areas that will increase costs for homeowners, communities, and taxpayers.
The Bottom Line.
Investing in mitigation and informed development is one of the most effective ways to reduce disaster losses, protect taxpayers, and improve insurance affordability. Smart, bipartisan policies that support stronger homes, wise development decisions, resilient infrastructure, and proactive preparedness can lower disaster costs, avoid putting people at risk, and, when paired with risk-based pricing and sound land-use decisions, help support more stable insurance markets for communities across the country.