> It’s simplistic to cite flood risk as a reason not to build somewhere.

I didn't say people shouldn't build in Houston. I proposed a framework under which the economic incentives would presumably provide improved signals about whether building/living in Houston was a better idea than doing so elsewhere: require developments built in areas that can make federal flood insurance claims to pay something into the risk pool. Developers and potential residents can decide if the rest is worth it.

Costs like plowing snow or risks like earthquakes and wildfire risks seem to be covered by local taxes and/or private insurance. If the savings Houston achieves from having no need for them really do outweigh the problems of flood risk -- as your comment seems to suggest -- then presumably Houston would remain an economically appealing place to live even after my proposed change.

Presumably the same thing happens with the Netherlands and the Dutch bear the economic costs knowing it's worth it.