Earlier this year, United States House Financial Services Subcommittee on Housing and Insurance held two hearings to address flood insurance and the National Flood Insurance Program (NFIP), including efforts to reform and reauthorize the program before its September 2017 expiration. In written comments submitted to lawmakers and on behalf of the multifamily industry, leaders of the National Multifamily Housing Council and the National Apartment Association encouraged consideration of improvements to ensure the NFIP’s long-term success. Their comments, responsive to the first hearing entitled, Opportunities and Challenges Facing National Flood Insurance Program, focused on four key areas, as summarized below.
Long-Term Authorization. Short-term extensions create disruption in the marketplace, a disruption that stalls both residential and commercial real estate transactions.
We, therefore, strongly urge Congress to prevent disruption in the marketplace and pass a long-term reauthorization of the NFIP that maintains the government’s backstop well before it is set to expire on September 30, 2017.
Mapping. The process for property owners to challenge wrongly classified flood zones is overly complex and financially burdensome.
It has not been uncommon for apartment owners to have their properties misclassified as being in high-risk flood zones, or Special Flood Hazard Areas (SFHA). …We, therefore, encourage Congress to provide sufficient resources to appropriate federal agencies to coordinate and build upon efforts such as the U.S. Geological Service’s 3D Elevation Program (3DEP) that could provide increased accuracy to existing tools currently used to determine risk and premium levels under the NFIP. Further, we urge Congress to improve the appeals process to make it more affordable, transparent, and less time-consuming for both communities and property owners.
Flood Risk Mitigation. Overwhelmingly, mitigation grant programs administered by FEMA (Federal Emergency Management Agency) focus on primary, single-family homes. Further, many of FEMA’s mitigation recommendations are not applicable to multifamily communities and would not afford any flood insurance premium reduction.
NMHC/NAA would urge Congress to require FEMA to undertake further actuarial work and issue alternative guidance specific to multifamily property owners that is both realistic and cost effective. Additionally, NMHC/NAA would ask that Congress direct FEMA to expand the focus of existing mitigation programs to better include multifamily properties or consider establishing a multifamily specific mitigation grant program to address the unique challenges faced by our property owners.
Business Interruption Coverage. Additional coverage for business losses due to flooding would permit a property owner to recover more quickly from an event.
Therefore we encourage Congress to support this addition as part of the NFIP’s reauthorization.
Visit this link to read the NMHC/NAA comments in full.
Below, courtesy of the GOP Financial Services, is the archived stream of the subcommittee’s hearing.
If you own, manage or represent multifamily properties subject to NFIP requirements, contact AFSI for a better understanding of factors that determine flood risk. Many multifamily industry owners, operators and developers turn to AFSI for an independent and complimentary review of properties in high-risk flood zones. This proactive measure often reveals the potential of significant savings and increased property value. At minimum, the review indicates whether the price paid for coverage is justified.