Property insurance rates are an effective deterrent, if allowed to function. It's FedGov that offers subsidized volcano insurance.https://twitter.com/matthew_d_green/status/906681123794800642 …
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Conceit of that tweet is that one man can grasp aggregate risk (like "live volcano") better than...well, everybody. Read yr damn Hayek.
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You honestly don't think that people themselves (and other involved parties) won't underestimate/otherwise ignore risk and just self-insure?
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Compare the (comparatively functional) wind insurance market to NFIP. Tornado alley sparsely populated, flood plains are grossly overbuilt.
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It doesn't help to speak of 'underestimat(ing) risk' w/o understanding how risk estimates actually get transmitted -- via insurance prices.
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Some people will always make bad bets. Our politicized/"democratic" flood insurance program makes the problem vastly worse.
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But in a competitive market, people making bad bets drive a race-to-the-bottom.
End of conversation
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That said, there *are* ways to build in such areas and not have your house washed away, or drown. But you can't do it with a city.
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Yeah, and a healthy property insurance market takes care of that, too. "Do XYZ or we don't underwrite you, do ABC and get 20% off your rate"
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It's not just us, though. People are living on the flanks of Vesuvius again, in huge numbers. With no way to evacuate, really, at *all*.
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If the risks were priced into the rates correctly, you'd have fewer people living in the most dangerous zones, thus less to evacuate.
End of conversation
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But muh national homeownership rate! (Aka muh real estate commissions + muh mortgage fees etc.)
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. Banned in Sweden. SubGenius, Zhuangist, white-hat troll. Defrocked mathematician. Brain problems.