Well if Houstonians should not be allowed to build in flood plains then should Californians be not allowed to build in “smog traps” (inversion layer basins) or wild fire areas? Let’s take Amsterdam which has dikes to prevent the flooding; or take Palm Springs/Coachella Valley, California that has “dry” flood channels that sit dormant almost always except for the rare flash flood event. Not all of Houston is a flood zone. Perhaps it needs to invest in a giant grid of flood channels to take rain water to the sea quickly. Just as smog aggregates in inversion layer basins in Los Angeles, flood waters aggregate in impervious clay soils of Houston. But then everyone should have to pay for such a flood channel grid not just the insured because there is no way to mitigate the effects of flood without passing it to one’s neighbors.
That's actually not true. Let's say you have 10,000 square feet of property. If there's a foot of rain, that's 10k cubic feet of water to pass on. But if there was a property tax or other incentive you could build a 50 by 10 by 10 dry reservoir and keep half of it. Retaining 1/2 your water is more than enough, even 1/4 would be enough.
There would be some details to resolve like how to build a deep sunken patio and keep it dry, or a deep natural area with plants that survive underwater or dry.