My thoughts were a policy that some governments have adopted:
On flood prone areas - a one time buyout offer from the government, who then levels the buildings and lets the property do what it may. This has been done along some river flood areas in NJ. If the people don't take the buyout - they are on their own the next time it floods. In some cases people are allowed to continue to live on the property with a lifetime lease from the government. They are responsible for all the costs of maintaining the property, and insuring against liability, but if the home is damaged beyond a certain point, the lease is terminated and the government can level the property.
Turns out that this is actually economically sensible - the cost of buying and removing the risky property from the market is less then repeatedly helping assist the owners in rebuilding it.
Seems a logical policy to follow, and I'd like to see it offered with the current damaged properties in NJ. Unfortunately - a lot of people won't accept it, but in that case it must be clear the government isn't going to continue assisting them in rebuilding in a location where the same scenerio plays out time after time. I was looking at the government photos (before/after) of the NJ coast, and in many cases where flooding occurred before is exactly where it happened this time. Inlets between the coastal bays/rivers and the ocean have opened in much the same spots - then been filled in and rebuilt on - many times even in my lifetime.
That's one solution. Problem is - much of the damage seen from Sandy is in locations where there have been houses for well over 100 years - that survived this long without damage or flooding. What to do in these cases? Dunno. If you accept that some form of climate change is occurring and these sort of storms are going to become more frequent then the choice may be to improve coastal storm protection, lessen the population density, build smarter, or choose to do nothing and let the free market select what happens. Usually the latter is what happens, with the result that we continue along the same path that got us where we are today. It's probably the most attractive for local politicians because no politician wants to be known as the one who reduced the value of the area they are elected from. It might actually take a politician concerned with what's right rather then what will get them re-elected for this to happen, so I don't really expect that to ever happen.