As Cassidy, Landrieu fight for credit on flood insurance, who deserves it?
8th July 2013 · 0 Comments
By Christopher Tidmore
An interesting political dance has occurred in Washington between Louisiana’s Republican and Democratic Congressional delegations, as they face off on a dispute upon which all of them completely agree. And, due to their partisan infighting, allies of Landrieu and Cassidy might be missing a chance to fundamentally create a new form of comprehensive federal disaster re-insurance. That’s the argument of the man most responsible for constructing the bipartisan coalition to stop massive insurance rate hikes, Jefferson Parish President John Young.
The effort over the last two months to stop massive flood insurance premium increases under the Biggert-Waters Act—which threaten to forcibly depopulate much of coastal Louisiana—was hardly controversial from a partisan standpoint, at least for our local representatives. Who, however, would claim credit for “saving communities” and by arresting the insurance rate jumps has turned into quite a battle for praise between supporters of Congressman Bill Cassidy and those of U.S. Senator Mary Landrieu.
Each side believes that the next year’s U.S. Senate race, and hence which party will control the federal upper house, rides upon which Louisianan is viewed as the most sympathetic to the endangered homeowner’s plight. The irony is that the one local politician, who deserves most of the acclaim for constructing the coalition to arrest the premium increases, has refused to play this game, and because of his decision to not fight for a piece of the spotlight, the Biggert-Water Act might actually be successfully amended to stop the flood insurance increases.
Jefferson Parish President John Young has received the fewest plaudits in the mainstream media for saving entire communities below the flood elevation levels, almost none in point of fact. Yet local Democratic and Republican leaders acknowledge that it was he who managed to put the often squabbling parish presidents and local officials into a lobbying force when Pennsylvania Senator Pat Toomy blocked a Landrieu amendment to the 2012 Biggert-Waters Act.
The legislation, which reauthorized and made substantive changes to the National Flood Insurance Program (NFIP), phases out grandfathering and subsidized flood insurance rates. This termination out of the grandfather clause will result in properties that were legally built according to all applicable codes at that time now being considered out of compliance. For some families, flood insurance premiums would jump to more than $28,000 per year, even though their homes have never flooded.
Young put the political muscle behind Greater New Orleans Inc. President Michael Hecht’s effort to have a unified front of Parish Presidents and local leaders . Young engineered a joint letter to Congress and a high profile, bipartisan gathering of eight parish presidents and the local Congressional delegation to protest Biggert-Waters’ logic. They cited the unfair provision of the 2012 Act, mandates that solely consider base flood elevation and levees with more than 100-year protection when factoring coverage. To ignore the presence of pumping stations and whether the homes regularly even flood as a factor in calculating actuarial rates for flood insurance struck the political leaders as insane.
In an interview with The Louisiana Weekly, Hecht spread around the praise to the many Presidents, Republican and Democrat, white and Black. He heartily acknowledged, though, that without Young, a former Maritime Attorney who understood the depth of the insurance implications, and his ability to articulate the dangers in bipartisan, as well as political terms, passage of an amendment to Biggert-Waters might not be possible.
Young’s refusal to claim any position of primacy in a coalition including such disparate voices as African-American St. John Parish President Natalie Robottom, a long-time Democratic activist and Landrieu supporter, along side of Caucasian St. Tammany President Pat Brister, a former Chairwoman of the State Republican Party and a Cassidy supporter, played a key role in the progress so far. Very unlike his fellow politicians, Young’s constant refusal to take praise for his work, was born of a legitimate worry—according to senior sources close to the Parish President—that if one person, or one party seemed to be pushing a change to Biggert-Waters, the bipartisan coalition he constructed would fall apart. “Getting something done on this is more important than one person,” Young responded to The Louisiana Weekly’s queries as to why he has kept such a low profile.
As he explained, “Reform of Biggert-Waters is critical. Entire communities could be wiped away, and this is not just about Louisiana or Gulf Coast. Fifty percent of the nation lives near a coastline. If you include rivers and lakes, the number jumps to eighty percent.” By applying the logic of Biggert-Waters, most of the residents of the nation could see massive increases in flood insurance, even if their homes have never flooded.
Thanks to mortgage regulations that require flood coverage for a loan, that could lead to a cascade effect of personal bankruptcies and entire communities where homes become worthless for resale. And, not just in the Gulf Coast region. “This is as much about New York as it is New Orleans.” Parts of Gotham’s boroughs lie below the new FEMA basic flood elevations—as do many communities up the East Coast and throughout the Great Lakes regions where one rarely thinks that flood waters pose a danger.
Infighting between supporters of Mary Landrieu and Bill Cassidy over a measure of agreement between the two candidates could endanger a chance to block the increase, Young warned, and it may already be killing the chance for a greater coverage reform the Parish President has long sought. “What we need is not just flood insurance. We need to look at federal disaster insurance.”
With the tornados in Oklahoma, wind damage from Hurricane Sandy, and rising Earthquake activity on the West Coast, Young believes there is a narrow window to creating a massive national reinsurance program on the model of the federal terrorism insurance program. It would encompass all forms of disaster, man-made and natural, including flood insurance. This national disaster insurance could, and probably would, take the form of re-insurance, providing a federal guarantee to sums above $5 billion, so as to keep rates at affordable and constant prices across the country, regardless of where one lives.
“With the recent disasters, there is bipartisan support for such an idea, but we are missing a chance,” on it, he stated, for the same reasons that agreement of keeping flood insurance rates affordable now faces a political impasse between nominal allies.
In his comments to The Weekly, Michael Hecht pondered why levees of 100-year protection are completely ignored as if they do not exist, and these other realities were “not part of the legislation.”
“New FEMA maps, however, which outline base flood elevation changes, do not currently recognize protection offered by unaccredited (less than 100-year protection) levees, or other elements (e.g., pumps) at all. In this sense, they are less than holistic and incomplete. We are requesting that FEMA work with local stakeholders to continue to develop and refine maps to accurately reflect flood risk in each affected community by taking into account non-accredited levees and other features that afford flood protection.”
If the current homes are not grandfathered in at affordable rates, he pleaded, their resale value fall to zero. And, a worse fate awaits individuals who currently pay mortgages, if they find the insurance rate hikes too high to pay. “If a homeowner who is required to have flood insurance allows his policy to lapse, he is considered in default of his mortgage. This will then affect the banks, too.”
Mortgage defaults and massive flood insurance rate hikes in coastal Louisiana could cause a chain reaction, explained Hecht. In fifteen years, “Communities facing these exorbitant rates will be depopulated. As will all of coastal and riverine America,” he warned. “The community of southern Louisiana supports a sustainable, fiscally responsible National Flood Insurance Program that protects the businesses and homeowners who built according to code and have followed all applicable laws. However, changes made to the NFIP in the Biggert-Waters Act of 2012 threaten to harm the very citizens the program was designed to protect.”
It’s the same worry that John Young has, but in the pursuit of votes for November 2014, credit has become a high stakes game. One of the architects of the GOP effort to reclaim the U.S. Senate told this newspaper privately, “The road to the majority goes through Jefferson Parish.” And much of coastal Louisiana.
Put another way, suburban and coastal Louisiana have transformed into Republican stalwarts in the last four decades, supporting the GOP in state and federal elections, save for candidates with one name: Landrieu.
Mary Landrieu survived three close Senatorial elections through the loyalty of GOP crossover voters in Jefferson, Terrebonne, Lafourche, and Plaquemines. Without them, her often one to two percent margin of victories would have reversed to Woody Jenkins, Suzie Terrell, or John Kennedy respectively.
As these are the areas of Landrieu’s base most affected by the flood rate increases, she and Cassidy both have political reasons to claim credit, and the man who unified his fellow coastal leaders to stop the rate hikes, has legitimate reason to worry. It led one of his fellow Parish Presidents to muse, as long as she was not quoted by name, “I wish John were running instead of either of them. He just wants to get this reform done. He doesn’t care who gets the credit.”
This article originally published in the July 8, 2013 print edition of The Louisiana Weekly newspaper.