Page 62 - Green Builder Magazine Sept-Oct 2017

CODE ARENA

The Latest Rules, Regulations and Codes Impacting Sustainable Construction

Flood Insurance’s Muddy Waters

What’s ahead for NFIP after Dec. 8? Time will tell
BY MIKE COLLIGNON flood insurance market.
HE NATIONAL FLOOD INSURANCE In the House, two Louisiana Republicans,
PROGRAM (NFIP) was created in Clay Higgins and Mike Johnson, are working
1968 to provide gap coverage for with their Senate counterparts on tougher
risky properties in flood-prone reforms, including rate hikes up to 10 percent,
T areas. The federal government CREDIT: REVOLUTION MESSAGING/FLICKR and granting FEMA authority “to terminate
offered coverage on two conditions: that local contractors that have a track record of abuse.”
communities would take appropriate measures Rep. Higgins also joined more than 25
to prevent development in risky low-lying areas; Congressional members who sent a letter
and that homeowners would pay actuarially Washout. Recent hurricanes have caused expressing their dissatisfaction with an exist-
sound premiums. millions of dollars in property damage in ing package of flood insurance bills that have
While it started with good intentions, the cities like Houston, leading to constant passed the House Financial Services Commit-
program gradually succumbed to real estate rebuilding of homes and other structures. tee with the assistance of its Chair, Rep. Jeb
interests, with the result being that flood insurance enabled, rather Hensarling (R-TX). That package, which would have continued to
than managed, development along coastlines and in other flood- allow NFIP coverage of new homes constructed in the 100-year
prone areas, ultimately putting more people and property at risk than floodplain and further grandfathered policyholders even if their
might otherwise have been the case. Also, well-to-do people benefit risk changed and limited annual rate increased to 6.5 percent. was
disproportionately from this program, as they are the ones who tend heavily influenced and then lauded by the National Association of
to build expensive houses on the beach. The NFIP has spent many Home Builders (NAHB).
millions of dollars to repair properties that have repeatedly flooded. While this would normally be an important story, it has taken on
The program has needed reform for quite some time. It’s currently a whole new level of importance after Hurricane Harvey soaked the
running a deficit approaching $25 billion, it allows homes and Texas coastline with multiple feet of rain, Hurricane Irma devastated
buildings to be built in high-risk areas, and it doesn’t adequately price U.S. territories in the Caribbean and affected most of Florida and parts
premiums. There was a short-lived attempt at reform that passed in of Georgia and South Carolina, and Hurricane Maria compounded
2012, when the Biggert-Waters Flood Insurance Reform Act spurred the Virgin Islands and Puerto Rico’s storm damage problems. Rep.
much-needed rate increases. However, that caused some home prices Hensarling may have characterized it best when he said, “Shame
across coastal regions to plummet, so the rate increases were undone on Congress if we don’t use the time afforded by this short-term
by the Homeowner Flood Insurance Affordability Act of 2014. extension to pass a long-term reauthorization that offers Americans
The NFIP was set to expire at the end of September, but Congress something better.” Whatever is decided in the coming weeks, many—
passed a three-month extension, so the program will continue to possibly all—Americans will be affected by the outcome. GB
flounder along until Dec. 8. This will almost assuredly pile more onto
the program’s deficit. Many Representatives, including some who Mike Collignon is the executive director and co-founder of the Green
are actively working on bills to reform the NFIP, were displeased Builder Coalition.
with the month extension, because it will exacerbate the program’s
problems even more now that the U.S. has experienced two more COURTESY OF
major hurricanes since early September.
The Green Builder Coalition

UPCOMING REFORM EFFORTS The Green BuilderCoalition is a not-for-profit association

Prior to the extension, there were already bills attracting attention dedicated to amplifying the voice of green builders
in Congress that aim to reform and extend the NFIP. A bipartisan and professionals, driving advocacy and education for
Senate bill from Mike Crapo (R-ID) and Sherrod Brown (D-OH) has more sustainable homebuilding practices.
minimal flood-mapping reforms in it, but “excludes privatization For more information, visit GreenBuilderCoalition.org
of flood insurance and makes no effort to limit federal coverage of For more information, contact Executive Director Mike Collignon at
properties that continually flood.” Contrary to that Senate bill, private mcollignon@greenbuildercoalition.org.
insurers believe they can adequately and cost-effectively cover the

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