Resolution Regarding Biggert/Waters Flood Reform Act

BROAD CHANNEL CIVIC ASSOCIATION
                                                                                                                                

March 3, 2013

RE:  Resolution Regarding Biggert/Waters Flood Reform Act

Whereas the Biggert/Waters Flood Reform Act of 2012 (the act) will be effective upon the adoption of the recently released FEMA AFBE maps and will have huge implications for the Broad Channel, as well as every coastal community in the United States, the community of Broad Channel has passed the following unanimous resolution after thorough review and discussion of this “act”-- This resolution states that based on these concerns this community calls upon our Federal representatives to seek to revise the “act” in order to reduce the 20% premium increase for primary Pre-FIRM residents and to re-instate the previous provision that “grandfathered’ in the subsidized premiums for PRE-FIRM homes upon their sale.

The Broad Channel Community has serious concerns regarding the “act” in regards to both the anticipated rise in premiums for Pre-FIRM primary resident homes as well as the tremendous negative impact that this “act” will have on all homes within the designated flood zone in the failure of the ”act” to grandfather current premiums upon sale of said properties. It appears that the 20% rise in Pre-FIRM primary resident properties will quickly see exorbitant premiums forced upon residents within a short period of time.

Whether the situation of young couples who have recently purchased their homes or an elderly couple who have long resided in their current home the impact of these increases will put undue and UNEXPECTED hardships in that it will seriously stress the fixed structured budgets that most homeowners find themselves on these days and will create a huge financial burden which was never anticipated when these homeowners purchased these homes.

In the case of homes that are sold the “act” calls for actuarial rates to kick in by 2017. When one factors in the FEMA stated possibility that the actuarial could be $10,000 a year or greater it can quickly be surmised that the net effect will be huge reduction in the value of these properties. In most cases middle class families have no greater source of equity then their home and it is one that is often counted upon for retirement calculations as residents grow older. To most homeowners the imposition of this type of unanticipated change to their resale value of their home will have huge implications.  

A quick review of the history of the NFIP appears to indicate that the program was solvent from its inception in 1968 until 2005 when Hurricane Katrina imposed extreme financial burden upon the program. Given that Louisiana has received 40% of all payouts since the program was created in New Orleans it is hard to understand how the “act” has been structured to allow those behind the very levees that failed to not be required to obtain lood insurance. That all residents behind levees are currently exempted seems to fly in the face of not only reason and common sense but history and appears to exempt a huge source of potential funding into the program that is now being sought by the imposition of these higher premiums as well as actuarial rates in the cases of re-sales, rental, lapse coverage, and repetitive loss properties.
We are joining coastal residents across the nation who are only now becoming aware of the implications of this law and who are requesting that it be revised.

Daniel T. Mundy
President
Broad Channel Civic Association