FEMA Common Sense and Cost Effectiveness Act of 2011 - Amends the Robert T. Stafford Disaster Relief and Emergency Assistance Act and the National Flood Insurance Act of 1968 to authorize the construction and maintenance of levees on property acquired under the Federal Emergency Management Agency's (FEMA's) hazard mitigation grant programs, including: (1) a levee that is federally owned and operated; (2) a permanent levee that is federally constructed and nonfederally operated and maintained; (3) a levee that is federally constructed as a nonpermanent levee, that a nonfederal entity desires to operate and maintain as a permanent levee, and the owners of which are participating in, or, in a specified period after the date on which the levee is constructed, will begin participating in, the emergency response to natural disasters program; and (4) a nonfederal levee the owners of which are participating in the program.
Authorizes an application to construct or maintain a levee on acquired lands to be denied if the levee poses a significant threat of harm to downstream communities.