EP 1165-2-1
30 Jul 99
of the flood plain will attempt to maximize returns, and take actions
with full knowledge of the flood hazard unless constrained by laws or
policies as mentioned above. Benefits and costs are evaluated under
prices existing at the time of submission of the report to HQUSACE.
b. Flood Damage Reduction Benefits. NED benefits are
categorized according to their effect as inundation reduction
benefits, intensification benefits, or location benefits. Inundation
reduction benefit is the value of reducing or modifying the flood
losses to the economic activity using the flood plain without any
plan. Inundation reduction benefits are usually measured as the
reduction in the amount of flood damages or related costs (those which
would be voluntarily undertaken by economically rational individuals
to reduce damages). Intensification benefit is the value of more
intensive use of the land (e.g., a shift from lower to higher value
crops or higher crop yields). Location benefit is the value of making
flood plain land available for a new economic use (e.g., where a shift
from agricultural to industrial use occurs).
c. Benefits from Evacuation or Relocation. NED benefits
resulting from evacuation and relocation plans consist of: benefits
from the new use of the flood plain; reduction of externalized flood
damages (damages absorbed by non-flood plain occupants); and benefits
accruing to off-flood-plain properties adjacent to open space. In
addition, non-monetary values such as increases in significant
environmental outputs on the evacuated flood-prone lands may be
considered in establishing justification for evacuation and relocation
plans.
d. Land Development Benefits. Land development, as used here
for policy purposes, is defined as the conversion of primarily vacant
land (land without significant structural improvements) to more
valuable (economically defined) use as a result of a flood damage
reduction project. Benefits for land development are usually
categorized as "location" benefits and are equivalent to the net
change in land value. An example would be the conversion of farmland
to residential land as a result of provision of flood protection.
Land development does not include cases where land use is the same
with or without the flood damage reduction project but would be used
more intensively (intensification). It also does not include cases
where land use would change without the project and project benefits
are achieved through savings in future flood proofing costs or
prevention of damages to future development. The following general
policy principles apply to the consideration of land development
benefits at structural flood damage reduction projects.
(1) Project or separable increments of projects that achieve
only land development (location) benefits do not address the prioity
purpose of flood damage reduction and, therefore, have a low budget
priority. Federal participation in these projects or separable
increments will not be recommended.
(2) The NED plan will be formulated to protect existing
development and vacant property that is interspersed with existing
development. All project benefits, including land development
benefits for interspersed vacant property, will be included for
project formulation and justification. The NED plan may also provide
protection of vacant property that is not interspersed with existing
development if it can be demonstrated that the vacant property would
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