National Flood Insurance Program
Largely through the efforts of Louisiana’s congressional delegation, the National Flood Insurance Program was spared expiration on May 30 for the eleventh time in two nears, this time through September 2019. Louisiana Senator Bill Cassidy simultaneously circulated among colleagues a letter with bipartisan signatories largely from coastal states calling for replacement of the “ridiculous” piecemeal reauthorization process with long-term reauthorization conditional on significant structural alterations to the program. Senator Cassidy, whose previous 2017 long-term reauthorization proposal stalled due to its inclusion of premium reduction vouchers for low-income enrollees, has become an authority on the issue in the Senate. Senator Cassidy’s letter outlined the following five goals of NFIP reform:
- Ensure the implementation of FEMA’s Risk Rating 2.0 accurately reflects a property’s unique flood risk while not compromising affordability and access to the NFIP. Risk Rating 2.0 will no longer use flood maps and zones to determine a homeowner’s premium rate, but rather a series of models that statistically estimates the risk for water inundation, and historical claims data, along with the replacement cost to rebuild the structure. While FEMA’s stated intent is to provide more accurate and transparent flood insurance pricing, there are significant concerns such a new approach could lead to increased premiums, forcing homeowners to drop coverage, or even worse, lose their home. We saw all too clearly the negative consequences of hiking premiums after the Biggert-Waters Act of 2012 caused costs to skyrocket, hurting policyholders and sending a chill through the real estate market. In addition, there are questions surrounding how FEMA will adjust risk in areas behind levee systems associated with the implementation of Risk Rating 2.0. For these reasons, the statutory cap on premium increases must be significantly lower than current law to ensure price shocks do not occur with implementation of Risk Rating 2.0.
- Affordability for low and middle-income policyholders and funding for mitigation. Even with a lower annual cap on premium increases, flood insurance will still be out of reach for millions of low and middle-income homeowners and renters. Rather than make the program more solvent and accountable to taxpayers, unaffordable premiums threaten to undermine the NFIP and expose taxpayers to additional federal disaster assistance grants for uninsured losses after a disaster. That is why an NFIP reauthorization bill must include a means-tested affordability program for low and middle-income households as well as a robust federal investment in mitigation funding. In addition, providing higher caps for the Increased Cost of Compliance program will help all policyholders lower their premium rates and reduce the collective exposure to flood-related losses.
- Ensure repetitive loss properties have a legitimate opportunity to mitigate prior to flood insurance premium adjustments. According to FEMA, repetitive loss properties account for 1 percent of policies but over 25 percent of flood claims. Mitigating repetitive loss properties through buyouts, elevations or flood proofing will save money for NFIP policyholders and the Federal taxpayer by reducing the number of properties affected by flood damage and disaster assistance needed for repairs. Congress should build upon the 6 percent in Disaster Relief Fund dollars set aside for the Building Resilient Infrastructure and Communities (BRIC) program, as established by the Disaster Recovery and Reform Act, by allocating an additional significant percent toward property-specific mitigation for repetitive loss and Pre-FIRM properties. Every dollar in mitigation yields at least six dollars in reduced future damages, making proactive investments an effort the government cannot afford to neglect.
- Reform the NFIP “Write Your Own” program and claims process to address lessons learned from Superstorm Sandy, the 2016 flooding in Louisiana, and other disasters. The Senate bill should include provisions from Title VI of S. 1313 and Titles III and IV of S. 1368 (115th Congress), which injects fiscal responsibility in the Write Your Own Program, reforms the claims and appeals process and protects policyholders from fraud and other unethical practices by some insurance companies and their contractors. Policyholders have paid premiums for years, many even for decades. They deserve to be treated fairly and have their claims processed quickly so they can recover and get back in their home as soon as possible.
- Improving NFIP solvency by forbearing interest on NFIP’s debt. We appreciate that Congress included $16 billion in debt-forgiveness for the NFIP in 2017 disaster supplemental legislation signed into law by President Trump (P.L. 115-72). However, that did not cover the nearly $25 billion in debt that existed prior to the 2017 hurricanes, of which $10 billion to $13 billion was brought by the failure of federal flood protection structures after Hurricane Katrina. Rather than siphon $400 million from the program every year, which puts the program even further into a hole, Congress should forbear interest on NFIP’s debt, and reallocate that funding toward mitigation, affordability and other efforts to make the NFIP more solvent. We need to ensure that claims are paid with existing resources without the need to further increase already rising premiums on policyholders.
House Speaker Tim Moore has issued plans to reinstate the House Select Committee on Disaster Relief following recent revelations that Governor Roy Cooper’s administration has yet dispersed only one percent of the state’s $236.5 million federal Hurricane Mathew disaster relief allocation, funds which must be released before August 2023. The committee will investigate why state action on county, municipal, and citizen applications for relief has been delayed. State authorities cite as explanatory a cumbersome environmental review process which must be completed for each county prior to disbursement, and a maze of ad hoc federal conditions on the release of aid money to the state.
Both houses of the General Assembly have finalized budget proposals for the next two years, releasing substantially disparate packages that portend a lengthy reconciliation process towards a final budget that Governor Cooper may well veto. Relevant items common to both spending plans but of contrasting appeal to realtors and builders include a 33% reduction in funding for affordable housing and a four-year extension of the Historic Preservation Tax Credit, to which the House version adds an extra $5 million in creditable expenses and a new bonus for renovating properties impacted by natural disaster.
Ban on Oceanfront Pools?
Currituck County Commissioner Paul Beaumont, accompanied by two planning staff members, attempted to manage broad concerns which arose in a May 30 stakeholder meeting on the proposed text amendment establishing a sixty-foot setback for oceanfront accessory structures. Members of the OBAR and OBHBA were conspicuously represented among public attendees, who raised questions about the extent to which existing CAMA regulations already prohibit the erosive building practices at issue, and the projected impact of the proposed footage. County officials were able to provide neither financial impact assessments nor the number of affected properties, but appeared ready to develop that information for a range of possible alternate setback footages from 10ft to 60ft before a second stakeholder meeting takes place.
Outer Banks Regional Hazard Mitigation Plan
A meeting upcoming Thursday June 6 from 1-2 p.m. at the Kill Devil Hills Town Hall will enable Dare County to collect public feedback on 2020 updates to the Outer Banks Regional Hazard Mitigation Plan, a process required to maintain eligibility for FEMA disaster relief assistance.
Proposed Hatteras Village Zoning Change
On Monday, June 10, 2019 the Dare County Planning Board will discuss a zoning text amendment submitted by SAGA Construction to amend the C-2H zoning district to add “mixed use development” to the list of conditional uses and to also amend several dimensional standards of the Dare County Zoning Ordinance in conjunction with the mixed use development. You can view the application submitted to the Planning Board [HERE](https://www.darenc.com/Home/ShowDocument?id=5476). The C-2H zoning district only applies in Hatteras village.
The first step in the process is review by the Planning Board. The Planning Board is required to make a recommendation to the Board of Commissioners on any zoning amendment application. Dare County Planner Donna Creef is recommending that the Planning Board conduct a public hearing on this application. Once the Planning Board has made its recommendation, the item will then move to the Dare County Board of Commissioners for consideration. The entire zoning amendment process takes a few months to complete.
A public comment period is offered at the beginning of each Planning Board meeting and persons may choose to speak on any matter under consideration by the Planning Board. Emails may be submitted for inclusion by June 10th to Dare County Planning Director, Donna Creef at [firstname.lastname@example.org](mailto:email@example.com)
Town of Southern Shores Considers Restricting “Events” in homes to 3 Per Year
The Southern Shores Town Council entertained on June 4 a proposed ordinance imposing various compliance protocols on “gatherings” at residential properties. Originally entertained in 2015 as an experimental means of density regulation following Senate Bill 25’s nullification of municipal ordinances specifying bedroom number, the ordinance was revivified last week to address continuing concerns about excessive traffic, noise, and safety. The ordinance as currently written would prohibit more than three events of 25 or more persons per property per year, exempting “traditional family gatherings”, whose “traditional” feature appears to be event participants’ ownership of the venue. The ordinance’s implications for Southern Shores’ rental market are significant, inasmuch as properties’ use for weddings and other events typically generative of offseason income would be effectively proscribed once the three-event threshold is met. The Town Council voted to return the ordinance to the planning board, with instructions to consider raising both the event attendee number triggering enforcement, and raising or eliminating the three-event cap. It appeared that planning staff will hold a stakeholder meeting with realtors and other stakeholders at a future date to inform revision of the ordinance.
During the second public comment period, OBAR CEO Willo Kelly suggested that the town look at the Town of Duck’s wedding event registration rather than incorporating such significant language restricting events in the town zoning ordinance. The registration addresses safety/parking concerns by requiring that a parking plan be submitted and a contact name included when registering the event. She also cautioned that limiting large gathering events would have a “ripple effect” on other local businesses that rely on the shoulder season business generated by weddings, including property management, homeowners, catering, florists, photographers and more.