Castor backing measure to delay flood insurance rate hikes
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
By KEVIN BRADY
Congress is moving to give at least some relief to homeowners facing massive rate hikes in their federal flood insurance rates.
Language to delay some of the increases triggered by changes to the flood insurance program is part of a $1.1 trillion 2014 Omnibus Appropriations Act passed Jan. 14.
With Democrats and Republicans agreeing to the appropriations act, supporters hope a majority of lawmakers from both sides of the aisle will support the measure.
The Act would stop enforcement until October of higher premiums on homeowners who would see them under new flood maps. The Federal Emergency Management Agency (FEMA), which is overseeing the implementation of the higher rates, would also have 60 days to provide Congress with a report on ways to keep rates more affordable, according to the Act.
“During the delay, FEMA and Congress need to go back to the drawing board for a permanent fix to ensure that our neighbors and small business owners do not suffer unconscionable increases,” said Congresswoman Kathy Castor Jan. 14.
The Democrat’s waterfront district includes Riverview, Apollo Beach and Ruskin as well as Tampa and the southern tip of St. Petersburg.
“The Act would immediately halt increases for existing homeowners and help approximately 2 million Florida families through fiscal year 2014,” said Castor, who has been pushing Congress to address the issue since last November and co-sponsored a bipartisan bill to address skyrocketing rate hikes last year. “I urge my colleagues in Congress to support the legislation and provide a lifeline to millions of our neighbors right away.”
Thousands of Hillsborough County homeowners and businesses currently pay subsidized flood insurance rates through the National Flood Insurance Program (NFIP).
Flood insurance rate hikes, and uncertainty over whether Congress will act to delay or repeal them, has cast a pall over the market for homes in flood-prone areas, said Amy Soto, a Riverview Realtor who has been buying and selling homes in South County for 13 years.
Soto said homeowners and Realtors would welcome any action to decrease the amount of the rate hikes “but it would still leave the uncertainty” over substantial rate hikes in the future.
“As a buyer, if I knew there was a temporary delay in rate increases, I don’t know that I would still buy that home because I don’t know what’s coming in the future. It may make the home affordable right this second but it doesn’t make it affordable for the long term.”
With the NFIP $24 billion in the red after losses from Hurricane Katrina and other devastating floods, Congress passed the Flood Insurance Reform Act of 2012 in an attempt to restore solvency to the program with insurance rates more reflective of the risk of living on the water.
As a result of the 2012 law, rates jumped dramatically for some homeowners last October. Businesses and vacation homes in areas prone to flooding would all see their subsidized insurance rates phased out over time under the law. Single-family homeowners keep their federally subsidized rates under the 2012 law; however, that subsidy does not apply to anyone who wants to buy their home.
Of the NFIP’s 5.6 million policy holders, 1.1 million are subsidized, according to FEMA. Florida is the program’s largest customer with 2 million policies. Of those, 270,000 are subsidized by the federal government. Around five percent of subsidized property holders — those covering non-primary residences, businesses, and severe repetitive loss properties — saw immediate increases in their premiums under the 2012 law.
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.
Local Realtors also criticized the rate hikes, saying it would hurt Florida’s real estate market, which was starting to show signs of recovery after years of falling prices and foreclosure rates among the highest in the nation.
The real estate market needs to see the issue resolved, Soto said.
“Everyone that I have been dealing with is staying away from homes that would require flood insurance.”
For more information on changes to NFIP flood insurance rates, see FEMA’s web page on the subject: www.fema.gov/flood-insurance-reform-act-2012.