REALTORS® Support National Flood Insurance Program Protection
Copyright 2007 Frances Flynn Thorsen
Washington, DC -- The National Assn. of REALTORS®, expressing support for protecting the integrity of the National Flood Insurance Program, called for greater participation in the program by homeowners and communities. NAR also said it was concerned over the potential negative impact of some elements of the legislation on the housing market, especially for families with low and moderate incomes.
In testimony before the House Subcommittee on Housing and Community Opportunity today, NAR suggested that Congress develop a comprehensive approach to protecting homeowners, potential homebuyers, renters and business owners from the effects of future catastrophic natural disasters. Since its creation, the National Flood Insurance Program is credited with helping to reduce the escalating costs of repairing damage to homes, buildings and possessions caused by floods in participating communities.
“A strong real estate market is the linchpin of a healthy economy. To maintain the vitality of residential and commercial real estate, certain safeguards must be made available such as the federally backed flood insurance through the NFIP,” said Vince Malta, real estate broker-owner from San Francisco and vice-chair of NAR’s Public Policy Coordinating Committee.
H.R. 1682, The Flood Insurance Reform and Modernization Act of 2007, would maintain the unique partnership between local, state and federal government and enable participating communities to purchase insurance as protection against flood losses in exchange for state and community floodplain management regulations that would reduce future flood damage. In exchange, the NFIP would make federally backed flood insurance available to homeowners, renters and business owners in these communities.
“The NFIP bill is a win-win in that it promotes responsibility by homeowners, the community and the government. Compliance with NFIP building standards resulted in nearly 80% less damage annually.
In addition, the cost of flood damage was reduced by nearly $1 billion because communities are implementing sound floodplain management requirements and property owners are purchasing flood insurance,” said Malta.
Although NAR is supportive of H.R. 1682, REALTORS® believe certain components of the bill may have unintended consequences. “We are asking Congress to strike a balance between ensuring the long-term fiscal viability of the NFIP and avoiding disparate results that might cause market inequities and possibly lead to housing affordability problems,” Malta said.
NAR strongly supports provisions in the bill that include protecting the integrity of NFIP by fully funding existing obligations, increasing incentives for homeowners and communities to participate, and increasing awareness of flood risks. NAR expressed concerns over portions of the bill that might delay the updating of the 100-year floodplain maps, which according to Federal Emergency Management Agency is scheduled to be completed by 2010. “It is imperative that the flood maps are updated since they are the cornerstone of the NFIP program. Without accurate maps, property owners are not able to properly evaluate the risk to their property from flooding,” according to Malta.
The REALTORS® also expressed strong opposition to phasing out subsidies for non-primary residences and non-residential properties for several reasons including possible inequities, increased insurance rates and the “dramatic” effect on rental housing affordability, which would disproportionately affect low and moderate income individuals and families.
“NAR urges Congress to develop and enact a comprehensive natural disaster policy that protects not only homeowners but also all taxpayers because of proactive planning resulting in cost savings. We view reforming the NFIP as an important first step in this process. We look forward to working with Congress in achieving this important legislation,” Malta said.