Kennedy: FEMA Making Affordable Housing Impossible

WASHINGTON, April 27 -- Sen. John Kennedy, R-Louisiana, issued the following news release on April 26, 2023:

Sen. John Kennedy (R-La.), a member of the Senate Banking Committee, today raised concerns over the rising price of flood insurance during a hearing to address housing challenges.

Kennedy encouraged Lou Tisler, executive director of the National NeighborWorks Association, and other witnesses to examine the negative impact that rising flood insurance rates are having on the availability of affordable housing in Louisiana and America.

Key elements of the exchange are below.

Kennedy: "Mr. Tisler, do you think the federal government should be making it more expensive to build affordable housing?"

Tisler: "Absolutely not, sir."

Kennedy: "Well, it is. To build a home, of course--I think we can agree on this--requires money. And the people who loan that money, of course, expect to be paid back. And they expect to protect their collateral--which is the affordable home. The mortgagee--or the person who loans the money--oftentimes requires that the homeowner carry insurance. Can we agree on that?"

Tisler: "Yes, sir."

Kennedy: "And more and more, the mortgagee--the person loaning the money--requires the homeowner to carry flood insurance. Yet, while you are here advocating--as we all are--for affordable housing, our federal government through FEMA is working as hard as it can to increase the cost of flood insurance.

"FEMA hired a company called Milliman to write a new algorithm which, Milliman says, can look at every individual home in the United States and predict its flood risk over the next 30 years. Amazing. There's just one problem: They won't share with anyone the algorithm, and, as a result of that algorithm, national flood insurance costs have gone--I'll give you the national figure--from 808 bucks to $1,808.

"I'll give you some concrete examples. . . . In St. Mary Parish, the median household income is $40,000, roughly. The new flood insurance rate in St. Mary Parish is $5,226 a year, as a result of FEMA's actions. That doesn't include homeowners', that doesn't include property tax, and that doesn't include liability insurance--that's flood [insurance].

"Now, how can you build an affordable home for someone when they have to pay half of the cost of the home--when you add up all this insurance they have to carry--in insurance?"

Watch the full exchange here (https://www.youtube.com/watch?v=P8SVzlfSO5A).

* * *

Original text here: https://www.kennedy.senate.gov/public/press-releases?ID=98CB6050-377F-499D-B817-931B7DEEF1A0