National Resources Defense Council Calls For Re-Evaluation of Flooding Costs

In a blog post included in the NRDC’s series regarding the 1-year anniversary of Superstorm Sandy, Rob Moore, a Senior Policy Analyst, calls for a change in the way American manages its risk of flooding. Moore argues there are two major problems with FEMA’s supervision of the National Flood Insurance Program, which will compound to leave the NFIP $25 to $30 billion in debt once all claims from Sandy are paid out.

The first problem, Moore says, is FEMA’s failure to keep flood maps up-to-date, leaving a wide area susceptible to flooding and the area’s residents with a false sense of security. The area that was actually flooded by Sandy’s storm surge far exceeded the area FEMA’s flood maps indicated was at risk. This leads to a lack of preparation; without knowing they’re at risk, homeowners don’t prepare for a flood. The National Oceanic and Atmospheric Administration recently published a report that found similar flood could occur in Lower Manhattan and Sandy Hook, New Jersey every 20-25 years, or more frequently if deep cuts aren’t made to climate pollution. If emissions aren’t reduced, sea levels will likely rise, upward of 6 feet, leading to Sandy-like flooding every one to two years. If flooding frequency increases that significantly, it’s critical for homeowners and local officials to know where to expect it.

The second problem is that too many property owners receive a large federal subsidy to purchase flood insurance, incentivizing the owners to continue living in flood prone areas Moore argues. Flood insurance prices do not currently reflect the true risk of flooding. In the counties most heavily impacted in New York and New Jersey, 34% of flood insurance policy holders received subsidized rates. In the Atlantic City area, 44% of policies received taxpayer subsidies. These subsidies enable people to live in flood-prone areas at the taxpayer’s expense. As climate change leads to more frequent and severe storms, the cost to taxpayers will become unaffordable.

In response to these concerns, FEMA has updated its flood risk maps, showing more people at greater risk of flooding. While the old maps showed 35,500 buildings in the floodplain in New York City, the updated maps show a large floodplain including 67,700 buildings. Additionally, the Biggert-Waters Flood Insurance Reform Act of 2012 is moving to phase out subsidies for properties that are second homes, businesses, or have been heavily damaged by flooding in the past. While he believes these changes are for the better, Moore argues these approaches are insufficient to keep pace with the anticipated one to two foot rise in sea levels in New York and New Jersey by the year 2050.

Township officials in North Middletown met last week to encourage residents to contact their state and federal representatives to voice concern about upcoming flood insurance rate increases. The officials warned homeowners they could be facing premium increases up to 100 percent if they don’t raise their homes, despite the homes not flooding during Superstorm Sandy. Committeeman Anthony Fiore railed against the program during the meeting, calling the program “a national Ponzi scheme” and the rate increases “ridiculous.” Fiore said he could understand rate increases for homes that suffered flood damage, but opposed the premium increases for 1,400 North Middletown homeowners who saw no rising water during Sandy or Hurricane Irene because of the town’s flood control systems.

Although the residents may not have seen rising water, the FEMA decertified the flood systems in 2009, leading to a higher flood map elevation for North Middletown homes. Nevertheless, the Township officials have been contacting state officials, including Gov. Chris Christie, and Congressman Frank Pallone to push for changes to the Biggert-Waters legislation. The Township would like to pass a resolution proposing a flood insurance rate freeze for properties not affected by Sandy, allow private carriers to compete with the national program, and encourage state action to block the legislation from going into effect. The resolution would be circulated to other municipalities in New Jersey, as well as New York and Mississippi, and other affected areas. Fiores anticipates the resolution should be drafted within the next two weeks.