Congress continues to grapple with flood insurance

Herald/Times Tallahassee BureauJanuary 17, 2014 

As Congress continues to struggle over resolving the flood insurance rate hike crisis that threatens thousands of Florida families, Rep. Joe Garcia, D-Miami, introduced legislation Thursday to delay the proposed rate increases for at least five years.

The bill is an effort to expand beyond the partial delay in flood rate increases included in a massive spending bill sent to the president Thursday. Under that proposal, FEMA would delay rate increases for some property owners who were expecting rate increases beginning this fall because of new flood maps. It didn't address properties already hit by huge increases.

The proposal by Garcia faces an uphill battle.

House Speaker John Boehner said the GOP-controlled House is "not going to do that" when asked about the legislation aimed at delay

ing the 2012 flood insurance fix. He did say he's willing to consider more modest, unspecified changes to the flood program.

The temporary fix was tucked into the $1.1 trillion spending proposal pending before Congress, but it does not apply to properties already hit with higher insurance bills as a result of the Biggert-Waters Flood Insurance Reform Act of 2012, which attempted to end subsidized insurance rates for homeowners covered by the National Flood Insurance Program.

The Biggert-Waters Act requires homeowners to pay premiums commensurate with their true flood risk and requires FEMA to update flood maps across the country.

But the rate increases, some of which took effect in October, have since sent a chill through Florida's housing market, particularly in coastal counties with older homes that until now had the benefit of deeply subsidized premiums.

More than 268,000 Florida policyholders are expected to be hit with rate increases of between 20 to 400 percent under the act. Others are allowed to keep their subsidies but can't pass them on when selling their homes.

Garcia's proposal, which has the support of a handful of Florida Democrats, applies to all property owners covered by the National Florida Insurance Program, and provides the greatest relief to those hardest hit -- including an estimated 47,000 in Miami-Dade County, 11,000 in Monroe County, 50,000 in Pinellas and 14,000 in Hillsborough.

Garcia's bill also establishes a tax credit of up to $7,500 for homeowners who pay to raise their homes above the flood plain and conduct other flood mitigation efforts. It also authorizes FEMA to study the effects of the NFIP reforms and removes the current cap on the cost of that study.

"The impact of Biggert-Waters upon South Florida has been alarming and unacceptable," Garcia said in a statement. "I have had constituents see their insurance premiums jump from $2,000 to $49,000."

A more modest proposal to delay the rate impact for two years is getting traction in the Senate, where Florida Sen. Bill Nelson, R-Orlando, has been instrumental in pushing it.

But opposition to the delay has also been strong among environmental and free-market groups.

"Homeowners hit by insurance rate increases are understandably upset and calling for action from their senators. But continuing to subsidize flood insurance through the NFIP is not the answer, especially in the face of growing flood risks from sea level rise," the Union of Concerned Scientists said in a statement.

On the other side of the equation is Florida Gov. Rick Scott, who wants a delay in the flood insurance rate hikes because of their impact on the housing market.

He sent a letter to President Barack Obama this week asking to talk with the president to urge him to use his executive authority to delay the implementation of the rate increases.

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