Municipal lawmakers across the country are attacking a controversial act signed into law last year that will substantially increase the insurance rates paid by many homeowners in Wrightsville Beach and other waterfront neighborhoods in the Cape Fear region.
Signed into federal law on July 6, 2012, the Biggert-Waters Flood Insurance Reform Act has been met with considerable hostility from many coastal communities around the country. It was offered as an amendment to last year’s omnibus transportation bill, and was intended to balance the budget of the National Flood Insurance Program (NFIP), which currently owes the federal treasury more than $20 billion. However, the aggressive schedule for eliminating subsidies to homeowners’ insurance has provoked nationwide ire, along with new flood maps, which many municipalities have blasted for not taking local flood mitigation measures into account.
Historically, the program has provided subsidies to homeowners who would otherwise face cost-prohibitive insurance rates due to their structure’s susceptibility to floods. To what extent the structures are susceptible is determined by the Federal Emergency Management Agency’s (FEMA) Flood Insurance Rate Maps (FIRM), which are revised and reissued periodically as updated information becomes available.
Wrightsville Beach Town Manager Tim Owens said that he believes Congress was too hasty.
“The flood maps for New Hanover County are going to be sent to us at any time, I think October,” said Owens. “So why would you makes these changes to this program and not know what those flood maps are going to be?”
The intent of the FIRMs is to bring the actuarial rates for homes in line with their potential for flooding. The maps use the 100-year floodplain as their baseline, meaning that properties that fall within the flood zones are determined to have at least a 1 percent chance of flooding in a given year. When Hurricane Floyd battered the Cape Fear coast in 1999, flooding in portions of the Northeast Cape Fear exceeded what is considered its 500-year floodplain.
“One thing that I think is -troublesome, is you told folks to build one way, they built that way, but now the flood zones change, and they’re being impacted substantially when they did what they’re supposed to do,” he said.
Normally a grandfather clause would have protected homeowners who built properties based on the previous maps, issued in 2007, from seeing their rates immediately begin increasing. The Biggert-Waters Act, however, phases out grandfathered rates beginning in 2014, allowing them to increase 20 percent each year.
All parts of Wrightsville Beach, with the exception of a handful of parcels on the mainland, could potentially see major hikes once the new maps become available, depending on whether they are currently receiving subsidized rates. In a presentation to the town by Spencer Rogers, a coastal engineer who serves on the faculty of the University of North Carolina Wilmington, some residents could see their annual insurance payments skyrocket to nearly $30,000 per year.
Owens conceded that the intent of act isn’t entirely off base, however.
“I think there were some good intentions there, to renew the NFIP program, but I think this is really going to impact folks. They’re going to find it difficult to pay the bills,” he said. “I realize you can’t have a subsidy program $20 billion in debt. There’s got to be a better way to do this.”
Maxine Waters, one of the primary sponsors of the bill, has even voiced regret over what she called “unintended consequences” of the legislation in a July 3 letter to FEMA. That letter, signed by Waters, Mike McIntyre, and 25 other members of Congress, requests that the current FEMA administrator delay implementation of the bill, and failing that, provide recommendations for a legislative fix.
Wrightsville Beach Mayor Pro Tem Bill Sisson is currently working with McIntyre’s office to explore potential solutions. In addition to the letter to FEMA, Sisson said that a House-approved measure to delay implementation is awaiting action in the Senate, with another House resolution looking to both stretch out the implementation period and limit the immediate impacts.