Trump Executive Order Repealing Regulations Could Impact Harvey Rebuild

S&P Global Market Intelligence
Written By: David Hood
S&P Global Market Intelligence
Written By: David Hood

Two weeks before Hurricane Harvey made its first landfall in Texas, President Donald Trump signed an executive order repealing Obama-era regulations aimed at mitigating the effects of weather-related catastrophes. That decision could have major ramifications on how the region recovers and rebuilds.

Chad Berginnis, executive director of the Association of State Floodplain Managers said in an interview that while Harvey was not on the radar when Trump issued the executive order, the decision still came at an "interesting" time. Even without the storm, Congress following its summer recess was always likely to turn its attention to reauthorizing the National Flood Insurance Program, which is set to expire Sept. 30.

"I think one of the more interesting discussions is not NFIP in particular, but it's this whole flood management piece," Berginnis said. "And Congress can have a role in this. Are we going to have any decent standards for federal investments for rebuilding and ensure taxpayer funds are spent wisely?"

Berginnis said the repeal rolls back requirements for cities like Houston to standards set in 1977, which meet the "bare minimum" of NFIP flood mitigation standards. Trump's executive order was designed to curb approval times for infrastructure projects delayed by permit processes. Near the end of the order's text is a section that "revokes" Obama's order, called the New Federal Flood Risk Management Standard, which would have raised the height levels of certain roads and improved flood mitigation standards for buildings and other infrastructure in flood-prone areas.

In a research note, Berginnis wrote that the standard would apply to federal actions such as grants used for repair and redevelopment after a natural disaster. Obama's order would have required the rebuilding process to use data and methods informed by climate science to mitigate future catastrophic floods, and mandated that buildings be built several feet above flooding threshold elevations.

Ian Adams, associate vice president of state affairs at think tank R Street Institute, said in an interview that Trump's order will allow the federal government to approve rebuilding development in places and types that are fundamentally not sustainable "given the changes our climate is experiencing."

"It's terrible timing and it's sort of interesting because the [executive order] hasn't really come into full effect," Adams said. "But the rollback could not have come at a worse time simply because Houston will be rebuilt, will have all kinds of repairs that are ultimately going to be made by the city, and those activities are going to be undertaken without regard for what is only an intensifying risk."

Even with the executive order on the books, new legislation could be written to strengthen building standards, Berginnis said. Congress could use a short-term supplemental funding bill aimed at providing immediate relief to Harvey-affected residents as a way to do just that, he said.

The supplement, he said, is likely to come when Congress returns from its month-long August recess.

Trump said at an Aug. 28 news conference that he expects an appropriations supplemental relief bill in the "billions of dollars" will happen "very quickly," although the White House has yet to submit a formal spending request.

Adams said that it is unlikely that Trump would take back his executive order and expressed doubt Congress would try to reinstate it and still avoid a presidential veto.

"I think our bed is sort of made at this point, and now we're going to have the unfortunate and soggy experience of laying in it," he said.