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The weakening of Irene from a Category 3 hurricane to a tropical storm resulted in less damage in New York City (NYC) than initially was anticipated. It is widely recognized that the storm surge and associated flooding could have been much more severe. In a recent study, we showed that a direct hit to the city from a hurricane may expose an enormous number of people to flooding. A major hurricane has the potential to cause large-scale damage in NYC. The city's resilience to flooding can be increased by improving and integrating flood insurance, flood zoning, and building code policies.
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Aerts et al. (2012) studied this question.
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