With flood insurance rates — and homeowner outrage — continuing to rise in Florida, Louisiana and other states, the Senate on Thursday passed a bill that would block parts of a law that forced the increases.
The 67 to 32 vote represented a triumph of bipartisanship from a diverse coalition of states, and advocates expressed optimism it would build momentum.
But significant challenges remain.
“Now the question is, what happens down there?” Florida Sen. Bill Nelson said, speaking from the Senate floor during debate Wednesday and motioning to the House, where GOP leaders have said they will not take up the bill as written.
Nelson, who helped shape the legislation, spoke of “huge, gargantuan” rate increases homeowners have experienced in the past year as the 2012 Bigger-Waters Flood Insurance Reform Act went into effect.
The law mandated higher premiums to match true flood risk. Starting Oct. 1 it began phasing out over five years subsidies for owners of homes built before the flood map program began. Buyers of homes sold after July 2012 lose the subsidy immediately.
Though they overwhelmingly approved the changes in 2012, lawmakers are now trying to reverse the changes, blaming FEMA for moving too fast with new flood maps and not studying the affordability of new rates.
Chastened from stories from angry constituents, lawmakers rallied around legislation and on Thursday had assembled a strong enough coalition to defeat several amendments that altered the bill.
As approved, the Senate bill would delay major changes for four years and is retroactive to the 2012 law going into effect last October.
Florida has more subsidized flood insurance policies facing sharp rate hikes than anywhere in the country — 50,000 in Pinellas County and more than 14,000 in Hillsborough — and some homeowners are seeing annual increases of $2,000 to $10,000 or more
The changes are also being felt sharply in Louisiana, New York, New Jersey and a number of other states.
Opponents, including conservative interest groups, say the reforms under the 2012 law are necessary to ease the deficit-strapped National Flood Insurance Program, to end government subsidies and to discourage building in risky areas. Private insurers also have a stake in the debate, contending subsidized flood rates prevent competition.
The White House this week found itself in an unusual alliance with conservatives in saying the bill would undo attempts to stabilize the flood insurance program, which is $24 billion in debt, in large part because of Hurricane Katrina and Superstorm Sandy. But the administration stopped short of threatening a veto.
“The program is basically bankrupt and only operating by the grace of the American taxpayers,” Sen. Richard Shelby, R-Ala, said in debate Wednesday. “Essentially it was flawed from the beginning when it was created in 1968.” He accused sponsors of trying to kill any reforms.
“I believe people in America deserve to know the cost and risk of where they live,” he added.
“This is, in essence, an entitlement program,” said Sen. Bob Corker, R-Tenn.
Sen. Robert Menendez, D-N.J., countered that the bill does not apply to second and vacation home or those facing repeated flooding. Sen. Charles Schumer, D-N.Y., threatened that FEMA would take “nonsensical” flood mapping to other states.
The arguments now move to the House. A bill matching the Senate’s has more than 180 sponsors but Republican leaders, including House Speaker John Boehner and Rep. Jeb Hensarling of Texas, chairman of the Financial Services Committee, have vowed not to take it up.
The bill is also competing with other legislation that provides a less sweeping rollback of the 2012 law.
Advocates from Pinellas County, which has more subsidized insurance policies than any county in the nation, went to Washington this month to lobby the state delegation and will return next month to target a broader audience.
“We are going to be assertive in telling the true story for Florida — that this is affecting real people, middle-income people and ordinary folks, many of whom do not even have waterfront access or views,” said Wendy Nero, a Pinellas County government official who is working with the coalition.
Florida’s Democratic members of the House wrote a letter to Boehner on Wednesday saying they were “very concerned” about his comments last week about not taking up the Senate bill. (Boehner did say the House would look at “alternative ideas” that “both help homeowners and protect taxpayers.”)
“Listen to the families, small business owners, Realtors, chambers of commerce and retirees across America who agree that the Homeowner Flood Insurance Affordability Act of 2013 is the right approach,” the letter read.
A review of Pinellas County Property Appraiser data indicates the median value of affected homes that could lose their flood subsidies, some of them immediately, is $132,000.
The new rates have already hurt home sales in flood-zone neighborhoods such as Shore Acres, the Pinellas beaches and inland St. Petersburg have plunged to the slowest pace in years, according to Realtor data analyzed by the Tampa Bay Times.
Source: Tampa Bay Times (Jan 30, 2014)