Congress Stalls On Flood Insurance Reform Debate Amid Hurricane Season

Discussion around reforming the National Flood Insurance Program has been noticeably quiet this year.

The flood program is expected to be able to pay $5.5 billion in claims in 2018, which would be available for homeowners with existing policies, according to the Federal Emergency Management Agency.

Federal lawmakers from Texas, Florida and New York tend to be the most vocal in favor of reform as the majority of the federally funded insurance program’s policyholders come from those states. Many residents of the Florida panhandle who are feeling the aftermath of Hurricane Michael are now looking to cash in on their policies.

Long Islanders, including the 11,000 South Fork policyholders, will be taking note of how the program responds.

But elected leaders in Congress won’t be touching reforms for the rest of the year, perhaps distracted by re-election bids and confirmation hearings.

“It’s not really an item that many other members in Congress see as important to pass a long-term reauthorization of the program with reforms,” said U.S. Representative Lee Zeldin, whose district includes the East End, in a recent interview. “But it doesn’t matter who is voted into office after November 6, we need strong bipartisan support to update the National Flood Insurance Program.”

“When there is a need to extend the program without reforms, it’s very easy to get the votes to pass it in the House and in the Senate,” he continued. “What has been proven to be difficult is passing a reauthorization of the program long term that includes reforms. That’s gotten controversial.”

Last year, Mr. Zeldin called for bipartisan support in the House to pass an omnibus reform package that would put the federal flood insurance program on a path to long-term reauthorization through 2022, and include a policyholder’s bill of rights that would “better keep FEMA accountable.”

The package passed the House but stumbled in the Senate.

“There was a lot of movement and a lot of momentum. But a deal was cut in the oval office between the president and Senate Democrats,” Mr. Zeldin said.

In September, Mr. Zeldin voted against a government spending bill that was ushered by Senate Democrats and President Donald Trump, which included a short-term flood insurance extension—without any reforms, but forgave $16 billion of the $25 billion the program had in debt. The spending bill passed, “which immediately eliminated the Senate’s December deadline, the momentum, the pressure to pass a long-term reauthorization of the program with reforms,” Mr. Zeldin said.

That led to a series of additional short-term extensions this year.

The latest vote was in July when Congress agreed in the 11th hour to extend the program for an additional four months. It now expires by November 31, when hurricane season is expected to end.

“That may be the easy vote. It may be a good vote when you look at the alternative—letting it just expire. But it is not the tough and best vote,” Mr. Zeldin said. A lapse in the program, however unlikely, would limit the federal program’s ability to seek additional funds through borrowing.

Mr. Zeldin said that without much-needed reforms to the program, homeowners and their properties could be at risk, and the program’s $20.5 billion in debt will continue to climb.

“We have to get off the short-term extension merry-go-round and put this important program back on the path to solvency,” Mr. Zeldin said.

Left on the table in the Senate, the omnibus bill calls for the phasing out of policies with “extreme repetitive loss,” or properties in high-risk flood zones with four or more separate claims of at least $5,000, or two separate claims that together exceed the value of the structure.

Mr. Zeldin said everyone else has to pay for higher premiums as a result.

The bill would subject these high-risk properties to a $5,000 deductible, and premiums would rise 15 percent per year until the market rate for flood insurance coverage is hit. The annual premium for all other policyholders would be capped at $10,000 per year.

The legislation also authorizes $225 billion annually for Flood Mitigation Assistance grants through FEMA to help communities protect properties from future storms by raising roads, improving natural barriers like wetland and dunes, expanding stormwater runoff infrastructure and assisting individual homeowners in flood zones to improve their properties.

Also, Mr. Zeldin introduced a separate bill last year that would provide a credit to homeowners with federal flood insurance policies who invest in mitigation activities—such as elevating their homes, adding porous foundations or moving boilers to a higher floor—in an effort to reduce the cost to homeowners. It also requires FEMA to better cover co-op unit policyholders.

State Assemblyman Fred W. Thiele Jr. said he is confident the South Fork is not as vulnerable as it was in 2012 when Hurricane Sandy flooded hundreds of homes. He pointed to stretches of infrastructure projects that have reinforced coastlines, and homes that have been raised to protect against future flooding.

“The money has come from the federal government, but a lot of the mitigation measures from FEMA have been administered on the state level,” Mr. Thiele said. “One example is the hardening of utility structures—I mean, a lot of work that has been done by LIPA and PSEG.”

He also noted that the state has been involved in purchasing low-lying properties where homes had been destroyed by Sandy.

Mr. Thiele said he is also co-sponsoring a coastal resiliency and climate change bill in Albany.

“A lot more needs to be done to mitigate the potential for damages from climate change,” he said.

On the federal government side, $1.16 billion of funding is available for the Fire Island to Montauk Point project, which has been more than four decades in the making to restore 83 miles of beaches and protect coastal properties along the south shore.

“The big difference in 2018 is now it’s funded and being finalized,” Mr. Zeldin said. “We are at a stage right now where over the course of the last few weeks the local sponsors were all signing on to their share of maintaining the project. The next step will be a final report from the Army Corps of Engineers.”

With any luck, Mr. Zeldin said he expects individual projects to start in 2020.

“There has been a lot of progress with massive infrastructure and coastal resiliency efforts that allows us not only to recover from a past storm but to rebuild stronger than we have ever been before,” he said.