Posted on July 1, 2017 - 01:55 PM
by Rick Drumm, Outer Banks Real Estate Agent
FROM NAHB – Flood Insurance Reform Legislation Update
Congress is currently considering several different Flood Insurance Reform bills. Below is an update from NAHB on one particular bill that was approved last week by the House Financial Services Committee. As the House Financial Services Committee voted last week to approve the 21st Century Flood Reform Act, NAHB vowed to fight the measure until a “new construction” component is dropped from the bill.
“This is a bad bill that will make flood insurance un-affordable and inaccessible to too many home owners,” said NAHB Chairman Granger MacDonald.
At issue is a provision in the bill that would place restrictions on new construction developed in the 100-year floodplain. Specifically, four years after the bill’s enactment, new construction would no longer have access to the National Flood Insurance Program (NFIP), pending the availability of private flood insurance.
In a new manager’s amendment, Housing and Insurance Subcommittee Chairman Sean Duffy (R-Wis.) put forward language that would introduce a new Federal Emergency Management Agency-contracted clearinghouse. This suggestion is based off of a state model, and NAHB has numerous concerns about how it would work on a federal level. Additionally, if private insurance is not available in a state, NAHB warned House committee leaders in a letter that “home owners will be forced to pay a 10% surcharge on their NFIP policy. This surcharge is a penalty for policyholders solely because they purchased a newly constructed, more resilient home and a market for private insurance has not developed in their state.”
NAHB further stated that this “new construction” provision places $34 billion in wages and salaries, $24 billion in taxes and revenue, and 587,000 full-time jobs annually at risk.
“Instead of letting private insurance companies enter the market organically, this mandate skews the market through artificial means,” NAHB’s letter to lawmakers stated.
Reauthorizing the NFIP, which expires on Sept. 30, is a priority for the association. NAHB will work with lawmakers to ensure that any final re-authorization bill takes into account the concerns of the housing community.