Flood risk and related costs bear on local housing market, frustrate homeowners

Mar. 30--SCRANTON -- Occasionally during heavy rains, the railroad-tie buffer Lenny Srebro built around the lower corner of his property fails to stop flood water from pooling in his yard and infiltrating a garage housing a pair of classic muscle cars.

Srebro's basement used to flood, too, before he rebuilt the house on an elevated foundation following a fire, he said, noting several of his neighbor's homes on North Dewey Avenue still flood during downpours.

"I worry every time it rains because I don't know what's coming and I don't know what might happen," Srebro said.

People in Srebro's position live up and down the valley, many in communities rocked by major, devastating flood events over the past half century. While not as costly as catastrophic flood damage, many living in Federal Emergency Management Agency-designated flood hazard zones also must purchase expensive flood insurance that could cost hundreds to more than $1,000 a year.

While Srebro doesn't plan on selling his Lafayette Street home any time soon, Paul Marcks, president of the Greater Scranton Board of Realtors, said elevated flood risk and associated costs do impact on the local housing market. Like any other issue, from an old furnace or roof to high taxes, Marcks said flood risk can make potential home buyers more apprehensive.

"Like anything with a home, certain things are going to play a role in the buyer's level of comfort moving forward," Marcks wrote in an email. "I don't personally feel that it is 'more difficult' (to sell a flood risk home), but I think it would be fair to say ... it may simply create a smaller buyer pool."

Gene Besko, who lives near Srebro on North Merrifield Avenue, has yet to suffer flood damage to his home, though water does pond in his yard during heavy rain. Besko's anxiety has increased in recent years, he said, noting water seemingly comes closer to his garage with every flood.

He offered simple advice to home buyers considering a property prone to flooding.

"Don't buy it," Besko said.

Studies have found that homes in Special Flood Hazard Areas sell for less in some parts of the country that homes outside of hazard areas. In "Flood Risk and the U.S. Housing Market," drafted in 2018 by Michael Lacour-Little of the Federal National Mortgage Association and several other authors associated with the Wharton School at the University of Pennsylvania, researchers citing one study wrote, "home buyers are often not made aware that a home is in a flood plain until closing or after a bid has been made."

Speaking from personal experience, Marcks said that's generally not the case locally. He's found that clients on both the buying and selling side of the industry are usually mindful of flood risk and insurance costs.

"If a home for sale is currently required by the mortgage/home insurance companies to carry flood insurance then most buyers are going to want to know what the current rate is and take that into account when making an offer," Marcks said. "On the flip side, most sellers are aware it may not be a deal breaker for all interested parties, but will play a role in the amount a buyer is willing to pay."

He also believes homebuyers are generally more comfortable purchasing properties in areas protected by existing flood mitigation tools, such as floodgates and levees.

The Luzerne County Flood Protection Authority maintains a levy protecting about 14,000 properties across a dozen municipalities. Those residents enjoy that protection for an annual fee. Residential property owner pay either $63.43 or $126.87 per year in levee fees, depending on their property's assessed value.

Christopher J. Belleman, the authority's executive director, lives behind the levee in Kingston and takes comfort in the protection it provides. The levee fee, paid by residents and businesses, generates about $2 million per year for levee maintenance and the performance of the system.

For that investment and the resulting protection, Belleman said property owners often enjoy reduced flood insurance premiums. He also said the authority has taken steps to educate realtors about the fee.

"We've found in the past that at settlements, at closings, that the fee wasn't being prorated," Belleman said. "For the most part, I think the local realtors are aware of it. But there are realtors from out of the area, of course, (who) have no idea."

While levee fees may irk some residents, flood protection systems can save blocks, neighborhoods and municipalities from potentially devastating, long-term effects of flooding.

"All households in a community will be impacted to some degree (by serious flooding) due to infrastructure damage, business interruption, foreclosed and blighted housing, interruption in services, and lack of amenities even if their own homes are unscathed," according to the University of Pennsylvania paper. "An increase in the vacancy rates, neighborhood blight and lack of amenities will exacerbate the decline in property values."

Srebro and Besko believe better engineering could keep water running downhill over Keyser Avenue from ponding on their properties, something it's done with regularity since about 2006. The neighbors are in a different situation than those who live on the banks of rivers, for example, but in many ways they face the same threats.

"In our case, I'm like Lenny, I'm going to be here until I die, but I mean it's still not right," said Besko, who, like Srebro, wants the city to do more to address their situation. "It devalues everybody's property when you see water pouring down through the street."

There's a wealth of information available to homebuyers shopping in flood-prone area, including historical sales data, tax records and FEMA flood maps, that buyers can reference when exploring the market, Marcks said. That information should make buyers more comfortable assessing their individual risk,

Belleman said flood insurance costs and related expenses should be part of that conversation, too, as homeowners with federally backed mortgages must carry insurance if they're located in FEMA-designed flood hazard areas.

Owning a home in such an area can be prohibitively expensive for people on fixed incomes who can't afford insurance, he said, noting those who do and own their homes outright take a major gamble by not buying coverage.

"If you don't have flood insurance and your home sustains significant damage, it could financially wipe you out to try to recover from something like that," Belleman said. "Essentially you could lose your life savings."

Both Luzerne and Lackawanna counties have flood resources available on their respective websites.

Contact the writer:

[email protected]; 570-348-9141;

@jhorvathTT on Twitter

In Lackawanna County, residents should also be aware that new FEMA flood maps, which display areas that have a 1% chance of flooding in any given year, are expected to go into effect this summer.

About 874 properties will be newly located in a flood plain under the updated maps, meaning those property owners will have to purchase flood insurance for the first time unless they own their home outright.

To see how your flood risk will change under the new maps, visit lackawannacounty.org/floodrisk. Maps and other resources are available on the website.

-- JEFF HORVATH

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