The Senate has voted to delay increases in flood insurance costs for millions of people in flood-prone areas — a bill that NAR has strongly supported.
In 2012 Congress passed the Biggert-Waters law, which was designed to put the National Flood Insurance Program back on solid financial footing. After a series of major storms, notably Hurricane Katrina and “superstorm” Sandy, the NFIP found itself about $24 billion in the red to taxpayers.
But bringing the NFIP into the black would mean ending government flood-insurance subsidies to many areas, raising the cost of coverage dramatically in some places. That provoked a backlash from property owners, as well as from REALTORS® who have pointed out that the higher rates were hurting home sales as potential buyers got sticker-shock from the insurance costs.
The Senate bill, approved 67-32 (with both Virginia senators — Kaine and Warner — voting in favor), would continue federal subsidies for flood insurance for up to four years. That would give the Federal Emergency Management Agency (which oversees the NFIP) time to conduct an affordability study, to verify its flood-zone maps are accurate, and to find a way to balance consumer needs with the cost to taxpayers of keeping the flood insurance program solvent.
The vote sends the measure to the House for consideration, where it faces an uncertain future.
The following is a statement by National Association of Realtors® President Steve Brown:
“The Homeowner Flood Insurance Affordability Act, S. 1926, passed by the Senate this afternoon is the time-out Realtors® first advocated when dramatic flood insurance premium increases went into effect on October 1, 2013.
“This legislation will help homeowners nationwide who are experiencing financial hardship as a result of extreme flood insurance rates that are the unintended consequence of the Biggert-Waters reforms to the National Flood Insurance Program.
“Congress needs to hit pause on the unforeseen price increases and negative market effects of the reforms while the Federal Emergency Management Agency can complete an affordability study and research the true impact of the law.
“NAR data show that through January 2014, four months into the law’s implementation, more than 40,000 home sales were estimated to be either delayed or canceled because of increases and confusion over flood insurance rates.
“Realtors® thank the sponsors of the Homeowner Flood Insurance Affordability Act, Sens. Bob Menendez, D-N.J., Mary Landrieu, D-La., and Johnny Isakson, R-Ga., and look to the House of Representatives to take up the bill in the same bipartisan manner.”