Coastal Barrier Improvement (CBI) Act

The Coastal Barrier Improvement Act is federal legislation enacted in 1990 in the United States to renew the 1982 Coastal Barrier Resources Act (CBRA). Under the Coastal Barrier Improvement Act (CBIA), federal disaster relief and federal flood insurance are not available in high-risk, storm-prone coastal areas and barrier islands. A property constructed before the CBIA may still be eligible for federal disaster relief and federal flood insurance, but if it is substantially improved or damaged, these benefits will no longer be available.

The CBRA is a piece of legislation signed by President Reagan in the early 1980s to create a disincentive to further development of the environmentally sensitive coastlines that make up the Coastal Barrier Resources System (CBRS). The U.S. Department of Fish and Wildlife Service decides what areas belong to the CBRS.

In these areas, the CBRA eliminated two federal government subsidies: flood insurance from the National Flood Insurance Program and disaster relief after destructive coastal storms. The CBRA was both an environmental initiative to preserve coastal areas and their fish and wildlife and a practical initiative to prevent residential and commercial development in storm-prone areas. Not only are these areas at high risk of storm damage, but by leaving them undeveloped, they can help protect more inland areas against storm-induced high winds and tides by acting as a barrier.

Further, the law is supposed to prevent taxpayers from funding excessive risk-taking by property owners who choose to live or build in high-risk coastal areas, to discourage people from living in areas where they might be killed by severe storms, and to protect fish, wildlife and other features of the natural environment in coastal areas. A building must have been under construction before November 16, 1990 and not substantially improved or damaged since then to be eligible for NFIP flood insurance and FEMA disaster assistance. Federal funds also can’t be used to create or restore infrastructure, such as roads and causeways, in these areas.

Private insurers may choose not to offer flood insurance in these areas, either, because of the high risk they present. If the property is in an area designated as being at high risk for floods according to federal flood maps, it may be difficult, if not impossible, to take out a mortgage to buy the property since lenders require flood insurance on such properties.