From Bloomberg:

National groups were less enthusiastic. R.J. Lehmann, director of insurance policy at the R Street Institute, a Washington-based think tank that advocates free-market solutions to climate change, said the change would dim the financial signals warning people not to live in flood-prone areas.

“It’s a convoluted way to accomplish the goal of encouraging mitigation,” Lehmann said. “I just would be more comfortable with a direct means-tested subsidy for those who need help affording improvements, rather than mucking around with the tax code.”

Other states could follow, he said. “It wouldn’t surprise me if it caught on, given rising concern about flood risk.”