I understand your argument, but you can't compare floods to the birthday problem. Unlike randomly-sampled people's birthdays, floods in US cities are not independent random variables.
For instance, chances of 500-year floods in two Texas cities is not 1 out of 500*500 in a year. If they're geographically similar and physically close, it should be closer to 1 out of 500.
In 2 Texas cities, sure, but in every U.S. city? There are going to be several that end up getting a few 500-year floods... and several others that don't flood as expected in several 1000 years.
For instance, chances of 500-year floods in two Texas cities is not 1 out of 500*500 in a year. If they're geographically similar and physically close, it should be closer to 1 out of 500.