• Delay all rate increases until the Federal Emergency Management Agency (FEMA) completes its affordability study, which is required under the Biggert-Waters Flood Insurance Act and was due to be completed last April. After completion of the study, FEMA will have a better understanding of how rate increases will affect policyholders and be better equipped to provide Congress suggestions on how the NFIP can address affordability issues, said Rutenberg.
• Require FEMA to take into account all flood control structures when mapping. Further, NAHB urges Congress to ensure that FEMA allows for sufficient time and independent vetting of new maps and prohibits rate increases based on incomplete or inaccurate maps.
• Reinstate the higher “substantial improvement” threshold. This refers to the value of remodeling and renovation projects that cause the insurance premium rate increases to kick in. The threshold was lowered from 50 percent 30 percent when the law went into effect. NAHB estimates this lower limit will place up to $8.5 billion in annual remodeling economic activity at risk, as even the simplest of remodeling jobs, like installing new appliances or updating bathrooms or kitchens, could result in many homes reaching the 30 percent threshold and triggering higher premium rates.
• Enable FEMA to continue to allow for flexibility for regional issues and to maintain the current residential “basement exception.” This exception is currently permitted in just 53 communities and allows home owners who require basements for safety and stability reasons to avoid the higher flood insurance rates under the law.
• Delay the premium rate hikes on second homes. Government data shows the median income of households with a second home is a modest $71,344. Many middle class families who own a second home are facing significantly higher premium rates under the Biggert-Waters Flood Insurance Act. As a result, even if they want to sell their second home, they cannot because the sale would result in a premium price spike for the new owner.
“NAHB is committed to working with this subcommittee and with Congress to find pragmatic solutions that will prevent undue hardship on the recovering housing market, prevent home values from decreasing and make the NFIP stronger and more effective for years to come,” said Rutenberg.
For more information, visit www.NAHB.org.
Continue Reading 1 2
Copyright© 2016 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.
Content on this website is copyrighted and may not be redistributed without express written permission from RISMedia. Access to RISMedia archives and thousands of articles like this, as well as consumer real estate videos, are available through RISMedia's REsource Licensed Content Solutions. Offering the industry’s most comprehensive and affordable content packages. Click here to learn more! http://resource.rismedia.com