Coastal La. faces depopulation over flood insure hikes
28th May 2013 · 0 Comments
By Christopher Tidmore
Robert and Lisa Taylor of Des Allemands, Louisiana will see their flood insurance premiums go from just under $700 per year to over $28,000 next year if the 2012 Biggert-Waters Act is allowed to stay in force. And, they are not alone.
Residents of the coastal Gulf South may find insurance increases so extreme that they will lose their homes, thanks to this piece of federal legislation. The Act proves so harmful, that David Vitter and Mary Landrieu, rarely U.S. Senatorial allies, teamed together to pass an amendment to the flood control legislation that would delay the increases for five years. It seemed ready to pass by bipartisan unanimous consent. Then, one of Vitter’s GOP allies Sen. Pat Toomy of Pennsylvania unilaterally blocked the amendment.
The move brought a bipartisan group of parish presidents to the Taylor household on Friday, May 17, to protest Toomy’s obstruction. The Parish leaders supported Landrieu’s effort to delay implementation of Biggert-Waters, a move which Toomy called a useless federal subsidy of flood insurance.
In an interview with The Louisiana Weekly, the principal organizer of the gathering at Casa Taylor, Greater New Orleans Inc. President Michael Hecht, said of Toomy’s accusation, “No, it is not fair criticism. These exorbitant rate increases are affecting properties have never flooded and were built in accordance with all FEMA required elevations and applicable codes at that time and are now to be considered out of compliance, through no fault of their own, due to new flood mapping. Toomey’s criticism implies that the federal government is cutting checks to flood insurance policy holders, which is not the case. And just last year, Pennsylvania, the state Senator Toomey represents, had more claims and payouts than the five Gulf Coast states combined.”
“The people and businesses of South Louisiana support 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,” Hecht continued. “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.”
And, it’s not just a catastrophic rate hike for the communities along the Gulf of Mexico, Hecht emphasized , “This is a problem facing coastal and riverine areas across America. It could affect all 50 states. We are working with our Louisiana Congressional delegation, FEMA, and NFIP to change problematic portions of the Biggert-Water Act to keep flood insurance affordable.”
The Biggert-Waters Act of 2012, which reauthorized and made substantive changes to the National Flood Insurance Program (NFIP), phases out grandfathering and subsidized flood insurance rates. This phase out of grandfathering will result in properties that were legally built according to all applicable codes at that time now being considered out of compliance.
Hecht, along with the Parish Presidents who gathered at the Taylor home, expressed confusion at the Act’s logic. Essentially, Biggert-Waters counts only base flood elevation and levees with more than 100-year protection. Neither the presence of pumping stations nor whether the homes regularly even flood are not even allowed to be a factor in calculating actuarial rates for flood insurance. And, levees of 100-year protection are completely ignored as if they do not exist. Baffled, Hecht pondered why these 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.”
Despite the defeat of Landrieu’s and Vitter’s amendment to delay implementation for five years, the assembled group of business and parish leaders pledged to work closely with the Louisiana Congressional delegation in another effort to amend and/or delay implementation of Biggert-Waters.
And the local delegation seems universally onboard, regardless of party. Congressman Bill Cassidy, Landrieu’s likely Republican opponent for the U.S. Senate in 2014, announced on May 17 the formation of the Congressional Home Protection Caucus, which he will co-chair with Democratic Congressman Cedric Richmond, as well as Senator David Vitter. The Congressional Home Protection Caucus is designed to be a platform to engage FEMA and NFIP in its rulemaking process and ensure the agency is working with locals in establishing accurate Flood Insurance Rate Maps. Congressman Steve Scalise and Congressman Rodney Alexander are also members of the caucus. Congressman Scalise has also spoken directly with FEMA Administrator Craig Fugate on the issues at hand to raise the group’s concerns with him.
In a positive move, Representative Maxine Waters, co-author of the Biggert-Waters Act, said last week that it was not the intent of Congress to impose the types of punitive and unaffordable flood insurance premiums that South Louisiana residents are facing, and that she intends to work with Congress and the Obama Administration to correct the problem.
However, if the Act is not amended, St. Tammany Parish President Pat Brister warned, “The Biggert-Waters Act has the potential to not only burden families with huge flood insurance bills, but it will wreak havoc on the recovering economy. The cost to families will be crippling and the long-term impact will be felt in homes, banks and real estate agencies around the country. The delegation that went to Washington, DC will not stop in their efforts to change the manner in which the National Flood Insurance Program is administered. We will continue to speak loudly and in unison in order to be heard in Washington.”
St. James Parish President Timmy Roussel agreed. “The outcome of the proposed amendment is disappointing after strong efforts were made by Senators Mary Landrieu and David Vitter. We must continue to take a stand to ensure south Louisiana is treated fairly. We cannot fault anyone for taking proactive steps to shield their families and homes from danger. Although it may be an uphill battle, we will continue the fight alongside our allies to gain protection for our parishes.”
Michel Claudet, Terrebonne Parish President, compared Biggert-Waters to the Cajun expulsion. “Many years ago the ancestors in our community were forced out of Nova Scotia and eventually settled in South Louisiana and parts of Terrebonne Parish,” he said. “Unfortunately, our federal government is now doing the same thing to their descendants, the Native American people, and the hard-working people who live in South Louisiana by the implementation of the Biggert-Waters Act. This act as presently written will decimate all of our South Louisiana communities.”
“The efforts of our residents and others around the state and on the east coast, coupled with the fly-in, have opened many eyes to the reality of this situation,” noted St. Charles Parish President V.J. St. Pierre. “I want to thank anyone who has worked on this issue – members of the public especially – and encourage your continued support and action. I will continue to be committed to working with our regional partners to restore grandfathering provisions and reduce flood insurance costs for local residents and businesses.”
“Senator Toomey’s action blocking a vote to amend Biggert-Waters is a minor setback, suggesting that politics is more important than people,” promised Natalie Robottom, St. John the Baptist Parish President. “We disagree and our efforts will not be detoured. The NFIP rate increases will destroy coastal Louisiana, coastal states and all other areas with the potential to flood. We cannot sit back and allow this to happen.”
Jefferson Parish President John Young noted that this legislation might do more to kill the Pelican State than Mother Nature herself. “The unintended consequences of Biggert — Waters 2012, if not amended both administratively and through the legislative process, will have a more devastating impact on coastal communities in Louisiana and throughout the United States than all of the storms and hurricanes we have endured since Hurricane Katrina. We will continue our commitment to ensure our residents have available to them what is fair and reasonable.”
“As this united effort gains momentum, we learn of more and more people from throughout the country objecting to the current provisions of the Biggert-Waters Act,” said Charlotte Randolph, Lafourche Parish President, on a positive note. “It is important to note that the unintended consequences will impact residents along rivers and streams, as well as those in coastal communities. We must insist that Congress consider balancing the budget with better monitoring of all federal programs, not targeting those who have adhered to the NFIP guidelines.”
In fact, after last week’s tornados, there may be a positive silver lining to the delay. The essence of the fight revolves around the fact that flood insurance policies are federally guaranteed. Private sector wind and hail insurance policies are not, and they have also drastically increased since Katrina.
Former Congressman Charlie Melancon had proposed federal re-insurance of those hurricane-based policies in a similar manner as terrorism insurance. He believed there was a coalition in Congress to create such re-insurance, above $5 billion, if both earthquake damage and tornado coverages were included. Up to this point, Congress has seemed to want out of the business of home value guarantees under affordable insurance policy. Now, however, there may be a window of opportunity, Michael Hecht told The Weekly. “National Catastrophe Insurance is an idea that has been proposed in the past, and with the recent tornadoes in Oklahoma, it is a proposal worth revisiting.”
His organization, GNO Inc, has put forward an action plan, working with the Louisiana Congressional delegation to introduce legislation that corrects the problems created by the Biggert-Waters Act. Further, GNO, Inc. and partners are working with FEMA to develop more accurate flood maps. Additionally, the group is reaching out to other affected coastal and riverine areas across the country to educate them on the devastating consequences of this legislation and to form a national coalition to lobby Congress to amend the Biggert-Waters Act. Communities in Florida, New York, Alabama, Mississippi and Texas have already been contacted on this issue.
The May 17 meeting at the Taylor Household followed a May 7-8, GNO, Inc. organized and led a delegation of over 20 parish leaders from across south Louisiana, including eight parish presidents, for a trip to Washington, D.C. to discuss the Biggert-Waters Act of 2012 and new FEMA flood maps and their impacts.
The group met with the Louisiana Congressional delegation, Federal Emergency Management Agency (FEMA), officials from the National Flood Insurance Program (NFIP), and members of the House Financial Services Committee.
This article originally published in the May 27, 2013 print edition of The Louisiana Weekly newspaper.