Flood Insurance Debate Begins

The National Flood Insurance Program is built on a pretty shaky foundation and needs major reforms in the face of sea level rise and escalating flood risks due to climate change.

Image by Don McCullough and used under Creative Commons License.

The 116th Congress will hold its first hearing on the future of the National Flood Insurance Program (NFIP), a program that is currently a liability for addressing the growing problems of flooding and sea level rise fueled by climate change. On March 13th, the entire 58-member House Financial Services Committee will deliberate on a package of four discussion bills,  intended to address the NFIP’s shortcomings.

So let’s take the opportunity provided by the hearing to see how the package of discussion bills stacks up against the climate-smart reforms that NRDC has long called for, namely:

  1. Helping People Move to Higher Ground
  2. Increasing Transparency and Requiring Disclosure of Flood Risk
  3. Producing Flood Maps that Reflect Future Conditions and Climate Change

1.  Help People Move to Higher Ground

A growing number of Americans live in flood-prone areas—places that are becoming more vulnerable with each passing year—and they need assistance to move to higher ground. Owners of these homes are, in a sense, trapped by the NFIP and its emphasis on rebuilding in place after a flood. As one homeowner said in a Houston Chronicle story: “You’re stuck. That’s the only way to put it.”

Between 4 and 13 million people could see their homes inundated due to sea level rise. Millions more will likely be subjected to repeated flooding as severe weather events and coastal storms become more frequent or cause more damage. Flood insurance primarily provides assistance to rebuild in the same vulnerable location. If a family wants to move to higher ground, it can be extremely difficult to get that assistance, but it could be provided much more easily to interested homeowners and communities through the NFIP itself. 

What Congress must do:

Through the NFIP, Congress should direct FEMA to provide more assistance to homeowners who would like to relocate, instead of rebuilding in the same vulnerable location after every flood.

What the discussion bills propose: EXCELLENT

The discussion bills offer some solid solutions to making buyouts and relocation assistance more timely and widely available. The proposal includes legislation sponsored by Rep. Charlie Crist and Sen. Jack Reed to establish new funding to support buyouts and other forms of flood mitigation and climate resilience projects. Even more importantly, it would enable certain NFIP claims and benefits to be applied towards a vulnerable property's acquisition, thereby allowing communities to quickly purchase homes from willing owners who want to move to higher ground. 

2.   Increase Transparency and Require Disclosure of Flood Risks 

It can be extremely difficult to find out information about flooding. Twenty-one states don’t require a seller to disclose information about flood damages and flood insurance to a homebuyer. Seven others have inadequate disclosure requirements. Even current owners find it difficult to learn their home’s flood history, and they may be unaware that they are legally required to purchase flood insurance. Compounding the problem, the Federal Emergency Management Agency makes very little information about the flood insurance program publicly available, leaving almost all of its data inaccessible to researchers, community organizations, and interested members of the public.

If people are denied access to good information, they cannot make informed decisions, such as avoiding buying a home in a place that’s at high risk of flooding.

What Congress must do:

As part of NFIP reform, the new Congress should mandate greater disclosure and transparency of flood risk data. Such reforms should include:

Nationwide disclosure requirements of flood risk information upon the sale or lease of a property. As a condition of participation in the NFIP, states should be required to enact disclosure laws that provide the following information about flood risk:

  • Whether the home has ever been damaged by a flood and the cost of the damage;
  • Whether the home is located in a 100-year or 500-year floodplain;
  • Whether the seller and/or previous owners ever received federal disaster aid that would require all future owners to obtain and maintain flood insurance on the property

A public right-to-know provision. FEMA should be required to create a centralized, free, open-to-the-public data system to share information related to flood damage claims, number of repeatedly flooded properties, and whether communities are properly enforcing local building and zoning codes required under the NFIP.

A homeowner right-to-know provision. Upon request, FEMA should be required to provide homeowners a record of past flood insurance coverage, damage claims paid, and whether there is a legal requirement to purchase flood insurance because of past owners’ receipt of federal disaster aid.

What the discussion bills propose: NOT ADDRESSED

None of these solutions are currently included in the discussion bills. That’s a major shortcoming and left unaddressed will leave millions of Americans unaware of the flood risks that came along with the home they bought or rent—until it floods. The House of Representatives previously passed legislation in November 2017 that addressed all of these problems. So there’s probably still plenty of support in Congress to pass them again, if they are added to the bill..

3.   Produce Flood Maps that Reflect Future Conditions and Climate Change

FEMA’s flood maps do not take into account how flooding will get worse in the future due to incidents of extreme weather, sea level rise, and other factors. The flood maps are based almost exclusively on historical information. That’s a big problem, since FEMA-produced flood maps are used by federal, state, and local governments, property developers, and community planners to make land use and development decisions that will last for decades. The maps also govern standards for building design and land use in the 100-year floodplain. FEMA is already mapping future conditions on a pilot basis in New York City, but nowhere else. The flood maps we rely upon for future land use decisions should reflect future risks.

What Congress must do:

Require FEMA to begin producing flood maps that reflect future conditions and the impacts of climate change, implementing recommendations from a Technical Mapping Advisory Council.  At a minimum, Congress should direct FEMA to begin working in a small number of other cities and jurisdictions to produce flood maps that include projections of future conditions. This would give FEMA a place to experiment with different approaches that could later be applied in all flood maps FEMA produces.

What the discussion bills propose: CLOSE, BUT NOT QUITE

While the proposed legislation would direct FEMA to begin “identifying future flood risk” on its  flood maps, this is not a big departure from what’s already required under the law. Per statute, FEMA is required to incorporate future conditions based on the recommendations of a specialized mapping council. That council has long since finished its recommendations, which means FEMA should already be doing what the proposed bill language requires. The proposed bill should address this issue by assigning FEMA a more specific set of goals to achieve on mapping future conditions over the next five years, instead of providing a restatement of already existing legislative authority.

About the Authors

Rob Moore

Senior Policy Analyst, Healthy People & Thriving Communities program
Blog Post

While the NFIP was established to help manage the nation’s flood risks, the program has often had the opposite effect, perpetuating a cycle of flooding and rebuilding for 100,000s of homeowners. With the right reforms, Congress could change that dynamic and ensure the NFIP lives up to its intended purpose “to reduce or avoid future flood losses.”

Blog Post

The nation relies on the National Flood Insurance Program (NFIP) to give people information about flood risks, provide post-flood financial assistance, and help people become safer from flooding. But the NFIP isn’t up to new reality of storms like Harvey, Irma, and Maria. These storms, and many floods in recent years, have put a bright light on the program's many problems, but Congress has dithered for 11 months.

Blog Post

The 116th Congress, divided between a Democratic-controlled House and a Republican-controlled Senate, will more than likely continue to be driven by party rivalry, but reforming the broken National Flood Insurance Program could, and should, be one area where bipartisanship is possible.

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