Can Buying Out High-Risk Homes Ease Deepening Flood Insurance Debts?

Miami Herald (FL)

July 26--In low-lying areas like South Florida, where rising seas and repeat floods are already driving up insurance costs, the nation's beleaguered flood program should consider more aggressive efforts to buy out risky property, the Natural Resources Defense Council said Tuesday.

In a study that looked at escalating costs to a program mired in $24 billion in debt, the group found that the National Flood Insurance Program spent $5.5 billion to rebuild 30,000 properties that flooded repeatedly between 1978 and 2015. That's just a fraction of the 5 million insured. The study also found lower-priced property valued at less than $250,000 typically cost more to rebuild -- about 122 percent --than its value.

To end the cycle of "flood, rebuild, repeat," that often traps lower-income homeowners, the group is pushing for legislation that would make it easier for willing property owners to secure an option to sell when they obtain insurance.

"Oftentimes homeowners are unable to get the assistance they really need, which is to seek higher ground," said Rob Moore, an NRDC flood expert and study author. "Rebuilding over and over doesn't seem to be getting the desired effect. People aren't being made safer and it surely isn't saving the flood insurance program money."

Under current options, property owners can opt to sell rather than rebuild, but the process can be lengthy, Moore said. FEMA considers a property a severe risk if four or more claims over $5,000 have been filed, or at least two amounting to more than the property value.

It's hard to tell what the plan would mean for Florida, where the flood-prone coast is lined with property priced in the millions and the population continues to swell. Sea rise is expected to continue to worsen coastal flooding and also trigger more inland flooding in areas like Sweetwater and the Shorecrest neighborhood in Miami. Florida leads the nation in the amount paid out for flood-protection and ranked fifth behind Louisiana, Texas, New Jersey and New York, for properties that suffer repeat flooding.

"The reality is we could be looking at three to six feet of sea level rise in this country by the end of this century. And everybody is not going to have the luxury of being able to stay where they're at right now," he said. "We should give them an option now...rather than waiting until they're completely out of options."