Congress needs to act swiftly on a bipartisan move to suspend the flood insurance reforms threatening the financial well-being of tens of thousands of homeowners in the Tampa Bay area.
The effort announced Monday would delay the steep rate increases for four years while the Federal Emergency Management Agency completes a study of the National Flood Insurance Program.
If passed, the legislation also would force FEMA to redraw its flood maps and reimburse homeowners who paid more because of faulty maps.
More importantly, it would bring immediate relief to homeowners unable to afford steep increases and unable to sell because the rates are driving away buyers.
As we’ve said before, the 45-year-old federal flood insurance program needs reform. The rates for waterfront homes, or for homes in flood-prone areas, should reflect the actual risk and not be subsidized by a deficit-ridden federal program.
But the sudden spike in rates this month associated with the Biggert-Waters Flood Insurance Reform Act was a punch to gut to the owners of even modest homes and to the housing market as a whole in the Tampa Bay area, where a fragile recovery is underway.
Pinellas, with more than 50,000 affected properties, is the hardest hit county in the nation. Hilllsborough, with 23,000 affected properties, is also feeling the brunt. Many of the homes being hit with huge increase are miles from the water and valued at under $130,000, according to county property appraisers. In Pinellas, about 1,000 low-income seniors are being getting hurt.
There are horror stories about rates jumping from $2,500 to as much $12,000 in a single year.
A four-year delay will allow for a review of properties that might not pose as great a risk as the new rates might suggest, and for officials to assess future rate increases in a more reasonable time period. The legislation has the support of Republican and Democratic congressional members, many from Florida.
Congress passed Biggert-Waters in 2012 with the best of intentions. The flood insurance program was meant to help homeowners deal with natural disasters, and was supposed to be funded entirely with premiums. But it ended up promoting growth in risky areas. And like so many government programs, it ballooned out of control. Hurricanes Katrina and Sandy pushed its deficit over $20 billion.
The goal now is to find a fix that eliminates the debt, that identifies the true risk these homes pose, and that softens the blow for homeowners facing rate increases.
Not much happens in a bipartisan way these days in Washington. But this appears to be one problem where both sides can agree that a solution is needed, sooner rather than later.