Pardon my ignorance, but is stupidity the only reason people live in disaster-prone areas? Specifically, when you are talking about housing developments in the flood-prone part of a large city such as Dallas (and perhaps in rural areas too), isn't this where the cost of housing is lowest and therefore more likely to be populated by the people who can't afford to live somewhere else? And isn't it often the minority populations who historically were confined to these kind of undesirable areas and can still make up the majority of residents now? People may be perfectly aware that they are living in the swampy part of town, just like they realize their neighborhood doesn't have good schools, but can they necessarily improve their situation? This seems like an Economic Justice issue to me if the federal, state, and local government decide that not fixing infrastructure is worth the risk. Do they value the life of these groups on the lower end of the sliding scale of worth?
I think the better long-term fix is to agree as a society to restrict development (and redevelopment) in fire-prone, mudslide-prone, hurricane and flood-prone areas (look at Point Bolivar after Ike and Bastrop after this summer's fires). It tends to have a greater impact on just the people whose homes are destroyed (like all of the taxpayer money going to assist them). But God forbid we tell anyone what to do in Texas.