American Subsidy Law in a World of Changed Weather Patterns

This Article considers the extent to which governments in the United States, faced with escalating costs of weather-induced disasters, can refuse, restrict, or eliminate subsidies that encourage persons to locate or remain in harm’s way, without triggering the Takings Clause or other forms of liability. In most scenarios, the law unequivocally permits governments broad freedom to refuse, restrict, or cease subsidization. The policy issues are more variegated—claims of reliance on subsidy-induced encouragement, or the plight of being in the wrong place at the wrong time, are not fatuous, nor is the risk of housing price instability if subsidies are withdrawn in risk-prone areas too precipitously. Also, to be sure, there are income inequality effects that enter the equation, which often fall along racial lines. Other than recognizing their presence, these policy concerns are sufficiently complex and important to require separate treatment.  It is incontrovertible that the harm being wrought by extreme weather events is immense and increasing: the weather impacts of climate change are being felt ever more often, and the cost of relief after such major events continues to reach new plateaus, now often in the billions of dollars spent after a single storm or wildfire. Continuing subsidies that encourage locating in risky places in their current form ignores the loss of weather and climate stationarity: weather extremes are greater at both the wet and dry ends of the spectrum, and the period between new record extremes in localities around the nation is declining. Changed conditions require changed assessments of safety and risk, and action based on those reassessments. More simply, encouraging continued or increasingly dense settlement in risky areas is irrational, whereas providing subsidies in the form of assistance to extreme weather victims is humane and has long been the norm in this nation. A great deal of support for the claims just set out was excellently marshalled by Professor Nevitt in his recent Article entitled, “Destroy, Rebuild, Repeat: How to Break the Climate Disaster Cycle.” The bulk of that information will not be repeated. Instead, the focus here is on one aspect of his proposal to end that cycle—"suspending” (his term) what this Article identifies as “subsidies” that encourage people to live in too risky locales. On that narrower topic, Professor Nevitt raised as a potential concern legally compelled compensation that might attend the suspension of rescue efforts, ceasing repair and maintenance of municipal services in those areas, and mandating the discontinuation of utility connections. On that specific point, while there may be some state-level laws that compel provision to too risky areas of some services, the general rule is that no such duties exist, and the discontinuation of subsidies is not a taking of property. The law is quite well settled that the government has no legal duty to subsidize in the first place. In fact, the precedents are reasonably clear that governments do not violate the Takings Clause or other constitutional requirements by withdrawing subsidies, leaving governments largely free to do so without liability unless the government explicitly agrees that a subsidy will be maintained via contract or legislation. Even then, past legislative enactments can be repealed or modified. This Article will examine the very narrow circumstances in which takings claims may require compensation when subsidies that encourage location in too risky locales are refused, reduced, or eliminated.