Evidence since 2021 shows U.S. governments have begun to restrict or effectively prohibit new home construction in some of the highest‑risk fire and flood zones, explicitly to avoid unsustainable public disaster and insurance costs, though these moves are still limited and contested.

Key points:

• State‑level prohibition trend in high‑risk flood (hurricane) zones – Vermont:

  • Vermont’s 2024 Flood Safety Act (Act 121) creates the state’s first statewide system to regulate new development in river corridors—the areas where the most destructive flooding and erosion occur. The law gives the Department of Environmental Conservation authority over all development in mapped river corridors and is explicitly aimed at stopping new buildings in the most hazardous areas, rather than repeatedly paying to rebuild them.(rivernetwork.org)
  • Coverage of the bill notes that it is “time to stop building new structures” in these corridors and that the policy is intended to reduce flood damages and the huge costs of disaster recovery for taxpayers.(vermontpublic.org) This directly matches the rationale in the prediction (government cannot keep underwriting repeated losses).
  • Vermont Public’s legislative wrap‑ups emphasize that the Act will limit or restrict new construction in river corridors statewide starting in the next few years, representing a structural shift away from allowing new homes in some of the most at‑risk flood (and hurricane‑exposed) areas.(vermontpublic.org)

• Local and federal‑linked rules already effectively banning new housing in core floodplains, now being tightened:

  • Even before 2021, many communities participating in FEMA’s National Flood Insurance Program already had regulations where new development is effectively banned in the 100‑year floodplain to remain eligible for federal insurance; local officials in Royalton, Vermont describe such pre‑existing rules as already “effectively” banning new development in those mapped areas and were pushing to extend those prohibitions to a wider 500‑year floodplain and river corridors to reduce future damage and secure higher disaster‑aid reimbursements.(vermontpublic.org) That is precisely a government response to the cost of repeated losses.

• Fire zones: emerging prohibitions on added housing in extreme‑risk burn scars:

  • After catastrophic Los Angeles wildfires, California Gov. Gavin Newsom issued an executive order (July 2025) granting local governments in LA County authority to suspend or restrict SB 9 housing development (lot splits and duplexes) in very high fire hazard burn‑scar zones such as the Palisades, Malibu, and parts of Altadena. The order includes a pause on SB 9 projects and lets localities designate where such housing “is or isn’t allowed” to ensure fire‑resilient recovery.(gov.ca.gov)
  • Using that authority, Los Angeles Mayor Karen Bass issued an emergency order that prohibits the city from accepting or processing any new SB 9 applications within the Palisades Fire area’s Very High Fire Hazard Severity Zone, explicitly citing evacuation gridlock and safety concerns in this extreme‑risk zone.(cbsnews.com) While single replacement homes are still allowed, this is a concrete example of U.S. governments beginning to say "you can’t add more homes here" in the highest‑risk wildfire areas.

• Motivation is explicitly about public and taxpayer cost, not just safety:

  • Discussion around the Flood Safety Act repeatedly frames unchecked development in river corridors as imposing “mountain costs associated with flood recovery” on taxpayers and emphasizes that preventing building in these areas is more cost‑effective than continually rebuilding.(vermontpublic.org) This is directly aligned with the podcast’s logic about the public sector no longer being able to underwrite these risks indefinitely.

• Counter‑evidence: bans are still narrow, and risky building continues elsewhere:

  • At the same time, investigations in Texas and elsewhere show thousands of new homes continue to be built in floodplains even after major disasters like Hurricane Harvey, highlighting that many jurisdictions still permit extensive construction in high‑risk zones.(texasstandard.org) In wildfire areas, most policy response is still focused on hardening codes and defensible space requirements rather than blanket no‑build zones.

Taken together, there is now clear, documentable evidence that some U.S. state and local governments have begun to prohibit or sharply restrict new residential construction in specific, clearly defined high‑risk fire and flood zones, motivated in part by the unsustainable public cost of repeatedly rebuilding them. That matches the core of Jason’s prediction, even though the shift is geographically limited and far from universal.