Next week’s scheduled changes to the National Flood Insurance Program will significantly impact Coastal Georgia property owners, federal officials told more than 200 attendees Wednesday night at Tybee City Hall.
Federal Emergency Management Agency representatives and the state official who oversees the flood rate mapping program spent close to two hours explaining, clarifying and answering questions about the Biggert-Waters Flood Insurance Reform Act. The law, passed last summer, overhauls the rate structure of the 45-year-old National Flood Insurance Program and goes into effect Tuesday.
The FEMA officials provided background on the National Flood Insurance Program and the new law. They also outlined the impacts, from premium increases to the loss of discounted rates.
Assurances that homes that serve as primary residences will remain eligible for subsidized rates, at least until the home is sold, came as a relief to the crowd. Many owners of flood-zone homes built before Dec. 31, 1974 receive a discount, and many feared their rates would double — or more — over the next several years as a result of Biggert-Waters.
Premiums may still climb on primary homes, however. The Biggert-Waters Act also includes a provision raising the cap on annual premium increases for all flood insurance policies — subsidized and unsubsidized alike — from 10 percent to 20 percent.
More depressing to the meeting attendees was confirmation that subsidized rates would not be available to future buyers of their homes. Many in attendance fear what high premiums will do to their resale value.
“Real estate prices are going to start dropping again and we are going to end up in a recession,” Tybee resident Tony Petrea told the government officials. “People are struggling to make house payments. People say, ‘But you live on Tybee.’ But Tybee is not Hilton Head. We are a working class community.”
The FEMA representatives made the case for the flood insurance changes. Storms and flooding in recent years have left the National Flood Insurance Program with a $28 billion shortfall. Flood risks are changing, not static, noted FEMA’s Susan Wilson, and previously the National Flood Insurance Program made no differentiation between primary and non-primary homes.
Owners of non-primary homes — in which they reside less than 80 percent of the time, like vacation homes and rentals — and commercial properties will bear the biggest burden of rate increases. Their subsidies will begin to be phased out at their next renewal and could rise by as much as 25 percent a year until the rate reaches the full risk amount on the property.
Complicating the process for Coastal Georgia property owners is the updating of the local flood maps. The process is underway for properties located along inland rivers. The new coastal area maps won’t be done until 2015 and are unlikely to take effect before summer 2016, said Tom Shillock with the Georgia Department of Natural Resources. The updated maps could result in zone changes as well as new base flood elevations, the main component in rate calculations.
Many attendees left the meeting shaking their heads and echoing the opinion of Tybee Mayor Jason Buelterman.
“I don’t think this law is in the best interest of this community,” Buelterman said. “I hope this meeting will energize us to contact our congressmen and senators to let them know we want to see changes to the law.”
Many lawmakers are pushing for a review of Biggert-Waters and a potential delay in the act’s implementation. But FEMA’s director, Craig Fugate, told a Senate subcommittee last week he lacked the authority to postpone the rate changes.
“I have not found a way to delay without some additional legislative report,” Fugate told the Senate subcommittee. “There is no provision for affordability in this law.”