People buying those houses? It's a human nature thing. People just don't prepare for everything that might happen. If they're in a flood plain, they probably have insurance. They trust their government to provide these basic services, while they spend money on all sorts of stuff the gov shouldn't be doing.
What's mind-boggling is that CA is one of the enviro-whacko states. They're concerned about climate change, but weren't concerned about keeping dams safe? Does not compute.
They want the dams to *go away* - they just drained and removed the Hetch Hetchee dam out there.