By Charlie Ban
NACo Staff Writer
Efforts to adjust recent federal flood insurance policy got a boost from one of the Biggert-Waters Act’s sponsors, who said she was committed to fixing the act’s unintended consequences. Meanwhile, a coalition of governments and businesses are asking President Obama to delay parts of the policy’s implementation.
Rep. Maxine Waters (D-Calif.) said she was outraged at the resulting flood insurance premiums following implementation of the Biggert-Waters Act.
“Since the law was enacted, we have seen a slew of confusion in FEMA mapping,” she said in a Sept. 30 statement. “With…rate increases approaching, time is running out.”
The act sought to shore up the finances of the government’s National Flood Insurance Program, which has been deeply in debt for eight years. That meant three significant changes to insurance premiums were put in place, including the removal of the grandfathered status for many properties, revised flood mapping that only recognizes mediation efforts by the Army Corps of Engineers and updated actuarial tables, released in early September.
Residential and commercial property owners are seeing dramatic increases in flood insurance premiums that are bringing their financial stability into question. Some increases are well more than 1,000 percent.
“Many families now face increased costs that will make homeownership so expensive that many would be forced from their homes or find it impossible to sell,” Waters said. “Increased costs of this magnitude might kick off a similar cycle of stagnant home sales and depressed home values that was one of the leading drivers of the recent recession.”
Waters, the ranking member of the House Committee on Financial Services, scheduled a committee hearing on the act for Oct. 9, but it was cancelled because of the federal government shutdown, and had yet to be rescheduled as of Oct. 17, the day the government reopened.
“The shutdown ending is a major boost to having this reviewed soon,” said Caitlin Berni, senior policy associate at Greater New Orleans, Inc. which operates the Coalition for Sustainable Flood Insurance.
The coalition is sending a letter to President Obama Oct. 23, which as of Oct. 18 had almost 100 organizations signed on. It requests that he delay the act’s implementation for the following structures:
- commercial buildings completed before the first flood plain mapping
- non-primary residences, such as rental houses, and
- homes purchased after enactment of the Biggert-Waters Act of 2012.
The letter also requests Obama delay the phasing out of grandfathering until the congressionally mandated FEMA affordability study is completed and its recommendations are considered by Congress.
“We understand and support the intent of the Biggert-Waters Act, but unintended consequences of the reforms threaten to harm the very people the program was designed to protect,” the letter says. “This drastic increase in premiums will cause property values and assessments to drop, bank mortgages to go into default, local tax bases to erode, and economies to be eviscerated.