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William K.
Democrat MA 9

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  • Homeowner Flood Insurance Affordability Act

    by Representative William R. Keating

    Posted on 2014-01-08

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    KEATING. I thank the gentleman for yielding.

    In an all-too-common occurrence in this Nation today, the Murphy family in Wareham, Massachusetts, has seen flood insurance premiums rise dramatically, from $500 annually in their instance to $5,000, a 10-time amount of an increase.

    Anthony Frangie who is a Realtor at the South Shore portion of Massachusetts has seen multiple home sales fall through specifically because the flood insurance premiums were too high. This is a real estate industry, not just in my home State, but across the country, that has been reeling as a result of the worst downturn in the housing industry in recent years that our country has ever experienced.

    They are beginning to come forward, sales are occurring. One of our most important industries, our housing industry is beginning to drive our economy forward, yet this is going to drive us back. The lending institutions that support this in States like Florida, where the inventory was so high, where they had houses that people walked away from because they couldn't afford and they couldn't sell themselves, now they have experienced improvement. But this is going to set them back, and it is going hurt our economy in the process, not just regionally, but nationally.

    Last year, the owners of Haddad's Ocean Cafe in the community I represent of Marshfield renovated their restaurant to reflect the current flood requirements, and they went further. They even went higher when they made these kind of very expensive renovations, going above what was needed. Today, with the new flood maps, they must pay millions of dollars in additional renovations to further raise the building even higher or pay flood insurance premiums far in excess of $30,000 annually, something that endangers their ability to conduct basic business.

    These are just a few of the numerous examples and challenges facing homeowners and businesses that have arisen through the implementation of the new flood insurance changes. FEMA, at hearings that we have had here in answering to this issue about the implementation, has said they perceive their job to overestimate the impact of this. Clearly, there's something wrong with the implementation of this law.

    Our office has had individual after individual come forward to us with things that affect their own person and their own homes looking for help. Some of them that can afford it have moved forward with appeals. Many of those appeals have been successful. Yet they have had to invest and risk thousands of dollars in elevation studies in terms of site reviews just to bring their case forward.

    Communities have gone together and brought forth appeals for the entire community. One of those communities in my district went forward; and they were so detailed, I looked at what they said and decided to bring it to the attention and to ask the advice and expertise of one of the Nation's top coastal expert groups. That's the University of Massachusetts School of Marine Science and Technology in Dartmouth, Massachusetts.

    What they determined with their review was that the methodology used to determine these maps was faulty. In fact, one of the things they found was the wave structure that results in flooding is the result of storm surges and violent storms in the east and Atlantic coast and responsible for the floods. That wasn't used as the methodology to determine what the impact would be on the maps and what the cost would be for flood insurance on all these homeowners. Indeed, they used the methodology based on the Pacific Ocean, with a longer, slower wave structure; and the scientists and coastal engineers that reviewed this for us said what they did, determined to be the maps, was based on faulty science.

    Now individuals are facing enormous burdens, as my colleagues have so aptly demonstrated. In terms of annual payments, that could be the difference between being able to stay in your own home, live in your own home, or not; annual payments that affect many people on fixed income who had never, ever budgeted for this and are throwing them into the most difficult decisions of how they are going to heat their home, how they are going to afford to live, what they are going to do. Even younger people who are using or hoping to use the equity on their home to pay for their kids' college education are finding that, instead of having this go towards that important goal in their life, it is going to pay for flood insurance.

    Now, this is an important thing, not only how it affects people on annual payments, but what this also does, this affects and can affect the entire value of their home. In fact, real estate people are finding as they are going to sell the homes, that the homes that were valued one way are now dramatically being reduced because of the cost of annual flood insurance attached to that home.

    So what we have really is a taking, as a result of the implementation, a taking of people's assets, of their savings, of the roof over their head, of the number one financial asset they have in their lives. Clearly, this is not the role of government to effectuate this kind of taking, because maybe the math is totally wrong and they shouldn't be included at all or maybe it [[Page H58]] is off just 1 foot and it has this kind of devastating financial and personal impact. That's why I have joined my colleagues in being one of the original sponsors of the Homeowner Flood Insurance Affordability Act Now this is done in a House that is often challenged in terms of working across the aisle, in terms of working in a bipartisan manner. But in this instance, it is a sterling example of how we have worked together across the aisle in a common interest, realizing how important this is to the people we represent, realizing how important this is to the real estate industry nationally, realizing how important this is to the lending institutions nationally and making sure that government isn't acting in a way that is actually seizing their personal assets and their life savings.

    We have an obligation, having worked together so hard and, in my opinion, achieving a very significant majority of the Members of this House of Representatives to pass this kind of delay, to get it right and make sure we are treating people fairly, that it is inherent that this bill be brought to the floor for a vote and be brought to the floor quickly for a vote. We were expecting Senate action in this just in the next few weeks.

    It is my hope, it is my plea, it is our obligation as the court of last resort representing these people who have so much in jeopardy right now, to bring it to the floor, to get a vote, to pass it, to get a delay to be able to make sure we go to FEMA and say, You are dealing with people's livelihoods. You have an obligation to get it right and get it done. And when they do, this bill will also allow us here in Congress to review it and make sure the implementation is continued in the correct manner.

    Let's move forward on this very important issue as soon as possible. Let's show this as one more example, during these very challenging times politically, of what happens when this House listens to the people in their district and around the country, works together to get something done and does the right thing. It is my fervent hope that we can do this quickly.

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