Mitch Traphagen File Photo
By KEVIN BRADY
A hard-fought battle to give relief to homeowners facing massive rate hikes in their federal flood insurance appears headed to the floor of the U.S. House of Representatives this week.
The new bill, which enjoys bipartisan support in Congress, would ease premium increases for primary residences and allow homeowners to pass on federally subsidized, below-market rates to anyone buying their home.
The proposed bill would also be retroactive to Oct. 1, 2013, when the new rates went into effect and would protect existing properties from premium increases when an area’s flood risk is remapped.
Second homes and businesses in flood-prone areas may still face flood insurance increases under the new bill, which is expected to be finalized this week. If the bill passes, a joint House-Senate committee will try to come up with compromise legislation, which President Obama is expected to sign. The Senate passed a bill last month to delay flood insurance rate increases.
“We are finally coming to the point at which we can grant homeowners and businesses some relief from the huge, gargantuan — sometimes tenfold — increases in flood insurance premiums,” said Sen. Bill Nelson (D-Florida).
Waterfront communities from New Jersey to Louisiana have enjoyed subsidized flood insurance through the National Flood Insurance Program since the 1960s. Of the NFIP’s 5.6 million policyholders, 1.1 million are subsidized. Florida, with 2 million policies, is the program’s largest customer.
With the NFIP $24 billion in the red after losses from Hurricane Katrina and other devastating storms and floods, Congress passed the Flood Insurance Reform Act of 2012 in an attempt to restore solvency to the program with insurance rates that more accurately reflect the risk of living in a flood-prone area. As a result, rates jumped dramatically for some homeowners last October.
The flood insurance rate hikes — 600 percent for one Apollo Beach home was not atypical under the new rate scheme — were repeated across the country in waterfront communities from Louisiana to Florida, and created a massive outcry from homeowners.
Rep. Kathy Castor, a Tampa Democrat whose waterfront district includes Riverview, Apollo Beach and Ruskin as well as Tampa and the southern tip of St. Petersburg, has been lobbying her House colleagues since November on the issue. Earlier this month, Castor pushed for a vote on the Senate bill only to be stymied by GOP leaders.
Castor said last week, “The unreasonable flood insurance increases are harmful particularly to middle-class families across the Tampa Bay area; however, this is a national issue.”
The new House bill was drafted by Rep. Michael Grimm, a New York Republican whose Staten Island district is still recovering from last year’s Superstorm Sandy, and House leaders are now backing a vote on the issue.
“This will ensure the resurgence of a viable housing market in our coastal communities, and bring much-needed confidence and security to the countless homeowners still struggling to rebuild their lives and finances,” Grimm said last week.
Flood insurance rate hikes, and uncertainty over whether Congress will act to delay or repeal them, has chilled the market for homes in flood-prone areas, especially Florida, and has united Democrats and Republicans from waterfront states.
