• With: Michael Brown

    This is a rush transcript from "Your World," May 16, 2014. This copy may not be in its final form and may be updated.

    NEIL CAVUTO, HOST: Well, now to former FEMA Director Michael Brown, who lived in Tornado Alley, in fire zones, and you name it. He says it's really not realistic to tell people not to live in these areas.

    So, Michael, I would raise with you what Jay did. Have them pay more for the privilege. What do you think?

    MICHAEL BROWN, FORMER FEDERAL EMERGENCY MANAGEMENT AGENCY DIRECTOR: Well, Neil, first of all, people already do that.

    If you live in one of these high-risk areas, you're already paying a higher insurance premium for living in that area. But the idea that somehow the government or -- I guess it would have to be the government -- tell you where you can live and not live just eviscerates the concept of private property. And I don't think we want to go that far.

    But let's stop and think about...

    CAVUTO: But what -- but think about it, though, Michael. If the flip side is that, as the government, i.e., us, the taxpayers...

    BROWN: Right.

    CAVUTO: ... we have to shell out dough for these people who either have to rebuild or change or modernize, what is wrong with that?

    BROWN: Well, we already pay taxes for fire departments and police departments and flood mitigation. We already do that.

    So what is the difference between the risk of a fire in a forest area vs. the risk of a fire in a track subdivision, where if one house catches fire, you may have the entire subdivision catch fire? Those embedded costs for a fire department already exist.

    But I'm always fascinated with this idea that somehow people should live where there's no risk. Let's just think about this: floods, hurricanes, hurricanes, floods, Tornado Alley, forest fires, dust, drought. There's no place we can live, Neil, in these United States of America where Mother Nature, and for that matter our urban way of living, doesn't create some kind of risk.

    So, yes, you and I need to figure out a way individually to mitigate our risk. But I'm always worried about these concepts that says, look, people have to pay higher taxes for something they're already paying for.

    CAVUTO: No, no. I see your point, Michael.

    (CROSSTALK)

    CAVUTO: But, now, of course, you went to Katrina and that nightmare. And I always think that if you build the same type of homes in the same type of dangerous areas -- now, I know in some -- where there are a lot of tornadoes -- almost nothing is tornado-resistant and all of that, but we try to make them at least stronger, we try to make them at least better able to buffet whatever disaster comes its way.

    BROWN: Yes.

    CAVUTO: Now, there's -- in the face of 70-mile-an-hour Santa Ana winds, I don't know if anything works.

    But don't you think that's a strategy that, if you are going to live in these areas, build better for them?

    BROWN: Absolutely.

    Yes, we saw that in Florida. In 2004, one of the things the Florida legislature did was they increased the stringency of building codes for people that were going to live in Hurricane Alley. And we saw the actual effects of those, where one school that was not retrofitted or rebuilt properly was torn up.

    CAVUTO: Right. Right.

    BROWN: Another one looked really good.

    So there are things you can do that you can create incentives for. Insurance companies can require this. Building codes can require this. But I'm just always worried about the -- the generally broad idea that somehow living in these areas somehow we have got to now say either you can't do that or if you do that, we mandate four, five or six things.

    Let's instead let the silent and kind of quiet hand of the marketplace take care of it. Insurance rates, property taxes, all of those things will fix this stuff if we just recognize that.

    CAVUTO: All right. Not bad advice.

    Michael Brown, always a pleasure. Thank you.

    BROWN: Thank you, Neil.

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