Dauphin County Commissioners hear from residents and business leaders about the devastating impact of rising flood insurance premiums
HARRISBURG, PA (February 12, 2014) – One family described how they were in “crisis’’ stage, unable to sell their home in Harrisburg’s riverfront Shipoke neighborhood after news of rising flood insurance premiums scared off buyers.
Another Shipoke resident recounted how she and her husband bought their home after the ’72 Agnes flood. Now widowed and living on a pension, she said she has no idea what she will do if her flood insurance – already $2,200 a year – gets any higher.
After receiving emails from residents fearing that flood insurance premiums will drive them from their homes, the Dauphin County Commissioners heard testimony today about how rising rates will devastate central Pennsylvania communities.
At issue is the Biggert-Waters Flood Insurance Reform Act of 2012, which calls for ending federal flood insurance subsidies. The act was passed after Hurricane Katrina in August 2005 caused a record-breaking $16.3 billion in claims and swamped the resources of the federally backed National Flood Insurance Program. Today, the program is $24 billion in the red.
Now, however, many homeowners are looking at premiums that may be nearly as much -- or more -- than their mortgage payments.
“Unless federal lawmakers act soon, it will be rising flood insurance premiums and not floodwaters that force people from their homes,’’ said Commission Chairman Jeff Haste. “This is an issue that affects everyone. Devaluing these properties through rate hikes will mean local governments and school districts will be looking at significant property tax increases just to maintain current services."
The commissioners urged Congress and President Barack Obama to pass the Homeowner Flood Insurance Affordability Act of 2014. The act calls for retaining most flood insurance subsidies for four years while the Federal Emergency Management Agency completes an affordability study and ensures its flood maps are accurate. The U.S. Senate passed the act on Jan. 30, but it is running into opposition in the House.
“I am now a widow, in poor health, living on a very fixed income. My current 2014 flood insurance is over $2000,’’ e-mailed Judy Polliard, of the first block of Tuscarora Street in Shipoke. “Any more of an increase will be more than I can handle. I do not have the funds to move without selling my home.’’
Commissioner Mike Pries said strategies such as flood mitigation efforts should be considered.
“For many people, their home is their largest asset,’’ Pries said. “It is unconscionable to effectively strip that away through exorbitant flood insurance premiums.’’
Dauphin County could lose $1.3 billion in assessed property value as a result of Biggert-Waters, according to a study done by the county and real estate development firm WCI Partners LP. Harrisburg alone has 2,500 properties in the 100-year flood plain – about a fifth of the city -- including some of its most valuable residential and commercial real estate."
Harrisburg only recently avoided bankruptcy and is now in the early stages of a state-sponsored recovery plan – an effort that is now being jeopardized.
“The Biggert-Waters Act is already having the effect of dramatically suppressing demand of entire neighborhoods,’’ said WCI President David Butcher. “It is essentially putting them ‘under water’ – in this case a phrase of cruel irony – with their mortgage companies.’’
Commissioner George P. Hartwick, III said he is concerned that Pennsylvania could be looking at a wave of foreclosures that will rip neighborhoods apart.
“These are not second homes for people on coastal areas, these are hard-working Dauphin County citizens who are struggling to make their current mortgage payments and who can ill afford to be hit with a huge increase in flood insurance’’ Hartwick said. “It will not only hurt the residents by devaluing their homes, but will also have a crippling effect on entire communities that surround the 100-year flood plain.’’
Jamie Berrier, a partner with Lemoyne-based RSR REALTORS, said she is working with clients who are having a hard time selling their homes because the property is in a flood zone. She is concerned the situation will only get worse.
“As flood insurance premiums rise, the real estate market will become flooded with foreclosures and unsellable properties,’’ Berrier said. “The rates are rising to a point that homeowners cannot afford to keep their homes.’’
The increase in flood insurance costs is impacting counties across Pennsylvania, which is the most affected state in the nation.
“The flood insurance premium increases under BW-12 affect all 67 counties, and potentially every taxpayer in the commonwealth, as we address concerns of declining property values and tax bases, inaccurate flood plain maps and the overall effects on our communities,” said Lisa Schaefer, director of government relations for the County Commissioners Association of Pennsylvania.
Within Dauphin County, there are 13,205 parcels of land in a 100-year or 500-year flood plain, 11.89 percent of the total parcels of land within the county. There are residential or commercial structures on 10,544 of those parcels with an average building value of $365,651. A comprehensive analysis of the impact of Biggert-Waters on all 40 municipalities in Dauphin County can be downloaded and viewed using this link http://www.dauphinc.org/gis/DC_BiggertWaters.zip.