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House vote could sink flood program in sea of red ink

Reformists don't want to push NFIP further underwater

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With a vote to gut flood insurance reforms expected in the House of Representatives as early as this week, the flood policy reform group, SmarterSafer.org urged House members to reject a bill unveiled over the weekend that would repeal key portions of the Biggert-Waters Flood Insurance Reform Act, a move that weakens the National Flood Insurance Program by preserving subsidies regardless of need at the expense of the American taxpayer.

SmarterSafer.org is a coalition of taxpayer watchdogs, environmental groups, insurers, and housing organizations.

“Repealing rate increases across the board for newly mapped properties would dismantle the central component of Biggert-Waters and drown the National Flood Insurance Program in a sea of red ink,” spokesperson Asya Pikovsky said. “This approach would inflict far more damage than the Senate’s own bill by sanctioning wasteful subsidies regardless of need in perpetuity.  

“Under the House proposal, lower-risk properties will subsidize higher-risk ones and taxpayers will be on the hook for the rest. The proposal will all but ensure that FEMA has to seek increased borrowing authority the next time there is a big storm, so NFIP’s debt will eventually reach unsustainable levels while providing no recourse for eventually containing that debt. This also masks risk, taking away the incentive for people to protect their lives and property," Pikovsky said.

Biggert-Waters, which was passed to ensure the National Flood Insurance Program moves closer to solvency and sound underwriting, tried to incorporate a more risk-based approach when setting premiums for insurance offered through NFIP. 

A few months after Biggert-Waters was passed, homeowners battling higher premiums were already pressuring lawmakers to carve back new premium hikes, creating just one more battle over flood insurance. Over the last few weeks, Republicans stopped several efforts to force a vote on H.R. 3370, which would delay pending flood insurance premium hikes under the National Flood Insurance Program.

A version of this legislation on Feb. 20 passed the U.S. Senate 67-32. Supporters want to stall provisions of the Biggert-Waters Flood Insurance Reform Act of 2012.

"We urge the House to follow the words of Speaker Boehner and modify Biggert–Waters in a way that protects both homeowners and taxpayers. This should be done through a slower phase-in of risk based rates and help for those cannot afford new rates,” Pikovsky said.

Smartersafer.org says they would rather Congress look at setting up a means-tested assistance program that is targeted, temporary, and paid for — outside of the rate structure — to help those with affordability problems pay premiums and undertake mitigation.

Further, Congress could slow down rate increases for properties impacted by new maps and home sales, and direct the Government Accountability Office to conduct a study on how to address affordability more broadly, including how to prioritize mitigation.

Calls to U.S. Rep. Maxine Waters, D-Calif., a leading proponent of repealing rate increases, was not returned at press time.

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