Spending bill delays map-related flood insurance hikes

Action halts FEMA program funding until Oct. 1

cschelle@bradenton.comJanuary 15, 2014 

Rep. Vern Buchanan, R-Sarasota, pushed a bill that delayed some hikes in flood insurance premiums. President Obama signed the measure into law on March 21, 2013. ASSOCIATED PRESS PHOTO

WASHINGTON -- Homeowners worried new federal flood maps will increase their flood insurance premiums received short-term relief Monday from a federal spending bill.

But other changes to the federal flood insurance program, including higher premiums on businesses, vacation homes and frequently flooded properties, remain in place, as will a new rule blocking homeowners from passing insurance subsidies on to homebuyers.

The provision is authored by Louisiana lawmakers and political rivals -- Democrat Sen. Mary Landrieu and GOP Rep. Bill Cassidy -- and comes as the Senate is poised to debate much broader relief to homeowners facing higher premiums. Cassidy is vying for the GOP nod to take on Landrieu this year.

The move comes as the federal government is beginning to implement a significant overhaul of the much-criticized program. The overhaul, passed in 2012 with sweeping support from liberals and Tea Party conservatives, caused panic in places such as Staten Island, N.Y., and the New Jersey coast and in flood-prone areas of Louisiana, Mississippi and Florida, where higher rates threaten to push people out of their homes.

"Hundreds of thousands of Floridians are experiencing

untenable rate increases that threaten to wash away property values and push people out of their homes," said Rep. Vern Buchanan, R-Sarasota, who co-chairs Florida's congressional delegation. "This bill will provide immediate relief for most policyholders while providing time for Congress to work on a permanent solution that reforms the nation's flood insurance program."

Buchanan, who had back surgery on a herniated disc this week, will be unable to travel to vote on the bill, said spokesman Max Goodman.

The practical effect of the Cassidy-Landrieu provision is relatively limited and can be added to the spending bill only because it does not increase the budget deficit. It blocks the Federal Emergency Management Agency from increasing premiums on homes not in a flood zone but deemed to be flood prone under new FEMA maps. That program is set to start Oct. 1, and the bill would prevent FEMA from funding it until then.

FEMA has already agreed to delay higher premiums in response to criticism new flood maps didn't take into account long-standing locally built levees and other flood mitigation and the fact premium increases are unaffordable in many cases.

Manatee County flood maps are being revised and will take effect March 17 putting some homes below flood elevations.

A broader federal bill will be debated later this month in the Senate to delay 2012 reforms four years, a step critics say guts the reform because the 2012 law expires in 2017.

Ardent supporters of delaying the premium increases include conservative Republicans from Southern states, where the new rules have sent some home values plummeting through uncertainty over insurance rates and because subsidized rates can't be passed along to homebuyers. New flood maps threaten to saddle some homeowners now paying a few hundred dollars a year with annual premiums of more than $20,000.

The spending bill allows more time to work on a permanent fix, Goodman said, but because the spending bill expires Sept. 30 at the end of the fiscal year, Congress still has work to do on flood-map related increases and Biggert-Waters-related increases.

"It gives Congress some breathing room, so nobody needs to be worried going to their mailbox saying their premiums are jacked up until Oct. 1," Goodman said, adding Buchanan will continue to push for an affordability study to show how much policyholders will be affected.

That's why Buchanan and other Florida leaders such as Sen. Bill Nelson, R-Orlando, continue to work on a broader flood insurance bill.

"Congress, it seems, is finally hearing the pleas of some of the homeowners," Nelson said in a statement. "This is only a partial solution and there is still work to be done."

Skyrocketing premiums hit particularly hard in Florida, which holds 37 percent of the nation's 5.6 million flood policies. Manatee County has the 10th-most policies in Florida.

The spending bill would delay new higher rates for homeowners when flood maps are updated. People with second homes or whose property has repeatedly flooded would still have to pay the higher premiums, which are scheduled to rise 25 percent a year until they reflect the true risk of flooding.

"During the delay, the Federal Emergency Management Agency 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 Rep. Kathy Castor, D-St. Petersburg, in a statement.

The 2012 law protects subsidies for people who receive them if their houses hadn't recently flooded, but does not allow them to pass the subsidies on to a homebuyer. This led to a severe slowdown in many housing markets, according to real estate experts. The broader legislation would allow owners to transfer the subsidy when selling their home, thereby propping up home values.

The underlying $1.1 trillion spending bill is set Wednesday for a House vote and Senate approval later in the week.

-- Andrew Taylor of the Associated Press contributed to this report.

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