Homeowner Flood Insurance Affordability Actby Former Representative Michael G. Grimm
Posted on 2014-01-08
GRIMM. Mr. Speaker, I thank my colleague for the opportunity to
speak today, and for his hard work on this important issue.
I rise today to discuss this urgent need for Congress to act as quickly as possible to delay these skyrocketing flood insurance premiums that right now are absolutely crippling homeowners in my district of Staten Island and Brooklyn, as well as across this entire great Nation.
In 2012 we all know that Congress passed the Biggert-Waters Flood Insurance Reform Act, and that was an attempt to stabilize the National Flood Insurance Program. That program does have problems. It finds itself in about $30 billion of debt.
While well-intentioned, this law has had absolutely devastating effects on homeowners across the country. They are seeing their premiums increased not just by hundreds, but in many cases, by thousands of percent each year, with more increases to come into the future.
In my district alone, I met with hundreds of concerned citizens, homeowners. I have a senior who came to me with her bill for the new flood insurance and her old bill. The premium was $2,200 a year, and the new bill was $28,000. She is on a fixed income. She is not in a position to pay $28,000 a year.
Unfortunately for her, she can't sell the property because the property's value doesn't warrant such an extravagant flood insurance premium, so no one will buy it, so she is trapped.
I had a working-class family come to me and show me a bill for $37,000. This is a working-class family. That was their flood insurance premium.
Again, what does that mean? It means they are trapped because they can't sell the house. No one's going to buy a modest home for 2 or $300,000 with flood insurance of $37,000 a year.
So this situation cannot be allowed to continue, and it cannot be unaddressed.
Last year, my district and the entire Northeast was devastated by Superstorm Sandy. Tens of thousands of my constituents found themselves actually homeless for the first time in their lives. Their lives were completely turned upside down. They were wondering whether they would rebuild at all, how they were going to move forward.
Many of them literally lost everything they have ever known. Every worldly possession was gone. They knew then, as we do now, it would be years before their lives would return to any form of normalcy.
Many of these people, unfortunately, still have not moved back into their homes. Many of them are struggling to rebuild, as we speak right now.
So to ask these victims of a natural disaster, who find themselves in a absolutely horrible position, through no fault of their own, to pay upwards of $15,000 a year or more in flood insurance premiums so soon after a natural disaster took everything from them, amounts to nothing more than them being victimized again.
If these premiums continue to go into effect, many of my constituents will find themselves unable to pay both their mortgage and their flood insurance. Their property will, in best case scenario, lose considerable value, but in the worst case scenario, become completely worthless.
This is unacceptable. To many Americans, their home is the largest asset they can ever own in their lifetime. To essentially destroy the value of those assets through flood insurance premium increases amounts to one of the largest takings of private property in U.S. history.
Thankfully, there is a solution. There is a solution that has been proposed in both Houses of Congress, and which I am very proud to say, I am one of the lead sponsors of, H.R. 3370, the Homeowner Flood Insurance Affordability Act, which would halt these draconian rate increases.
As of today, I can report that this commonsense legislation has over 170 bipartisan cosponsors, and that support is growing every single day.
This legislation simply would delay these rate increases for up to 4 years, giving FEMA time to both complete the affordability study mandated under Biggert-Waters and to propose a framework to Congress to maintain the long-term affordability of flood insurance. That will give Congress the time to consider their proposals.
If long-term affordability of flood insurance is not taken into account when setting future premiums, many Americans are simply going to stop paying for this important coverage. They are just not going to be able to do it.
This will only serve to damage the fiscal soundness of the National Flood Insurance Program over the long term. An expansion in the number of uninsured homes will only increase the direct cost to the Federal Government for future natural disasters.
It is common sense. It is mathematics. If people don't pay in to the program, the cost to the Federal Government will go up the next time there is a natural disaster. It is that simple.
So, in closing, I would like to urge my colleagues to join us in supporting this vital legislation. The sooner that we act to delay these flood insurance rate increases, the sooner we can bring stability, not only to the real estate market, but to our fragile economy, and we will be bringing much-needed relief to extremely nervous homeowners across this entire great Nation.
I thank my friend from Pennsylvania.