Sandy will turn out to be much worse than Katrina in terms of economic and personal dislocation after hitting dead-on the U.S.’s most important gateway city. And the storm’s fury is just another reminder of what’s in store for coastal real estate in coming decades—likely more destruction and devastation. I say this as an owner of a beach house on Long Island’s south shore that sits barely 300 yards from the ocean.

Drawn to the water’s edge, we’ve built homes, hotels, resorts and other businesses in places posing increasing danger. Fly over Florida and you get a bird’s eye view of how development has clustered along the attractive coastlines. Seven years after Katrina’s costly lesson, the Gulf Coast has been re-largely rebuilt despite what happened. Now in New York we see areas previously thought out of harm’s way to be highly vulnerable—like the hospital row along First Avenue near the East River and the entire financial district for that matter. People had scoffed at Al Gore’s film, which predicted severe flooding of lower Manhattan caused by rising oceans and ever less freakish severe storms. But can they afford to scoff anymore?

As the clean-up proceeds, talk builds of restoring life back to normal helped by federal aid and federally subsidized flood insurance payouts. Governor Cuomo wants multi-billion dollar sea barriers to protect lower Manhattan—more largesse from Washington please. The region will probably enjoy an employment boost from all the contract work needed to renovate and rebuild, providing a small silver lining. In a few years, if we escape other storms, complacency will set back in.

But at some point, real estate located near shorelines becomes too fraught with costs unless owners are willing to take on the risks themselves. What is now highly valued, will become much more of a gamble especially if owners cannot get bailed out. Dare I suggest that our budget cutters in Congress put the flood insurance program high on their list to avoid the fiscal cliff and sequestration? That may be too much to ask since so many districts and states contain property in or near flood plains—and I include places located along major rivers in the country’s interior. But do we really want to encourage rebuilding communities that could be wiped out again in the not so distant future?

What is certain—New York City cannot afford to see its subways and tunnels flood out again. Irene, last year’s tropical storm, came close to causing chaos, and now just a year later, Sandy did the trick. The city had a near miss and suffered a direct hit in just 14 months, and to my knowledge had never come close to such a disaster previously. Could you imagine if a storm like Sandy actually made land fall any closer to the five boroughs? And can we downplay that possibility now?

Dutch style sea barriers will cost multi-billions of dollars while the area’s ageing roads, bridges, tunnels and subways are already in need of extremely expensive overhauls. And oh yes, we are about to enter that post-election period when we realize there is just not enough money to go around for everything we need and everything that’s been promised without a big tax hike (which is coming in some form anyway).

And by the way—I was just dumb lucky… My house was unscathed, while neighbors flooded out.