R Street welcomes legislation to tackle repetitive flood losses
The bill, which is also sponsored by Reps. Ben McAdams (D-Utah) and Ann Wagner (R-Mo.), would require communities with 50 or more repetitive loss structures and that have seen NFIP claims or received Stafford Act assistance in the past decade to identify mitigation strategies to address repeatedly flooded areas, such as drainage improvements or voluntary buyout programs.
The legislation—a companion to S. 2088, introduced in July 2019 by Sens. Tim Scott (R-S.C.) and Brian Schatz (D-Hawaii)—also asks such communities to submit action plans to reduce flood risks to the administrator of the Federal Emergency Management Agency. Communities that fail to comply or to demonstrate implementation of such plans could be subject to sanction, including reductions in financial assistance.
“The Repeatedly Flooded Communities Preparation Act would support crucial community-focused efforts to address the explosion of repetitive loss properties insured by the NFIP, which still owes more than $20 billion to taxpayers even after having $16 billion of its debt canceled in 2017,” said R.J. Lehmann, R Street’s director of finance, insurance and trade policy.
“Investing in mitigation is a far more cost-effective use of taxpayer dollars than continuing to pay out claims and extend disaster assistance to the same places over and over again,” Lehmann added. “This legislation takes a carrot-and-stick approach to the problem of repeat flood losses, facilitating access to mitigation funding for communities that take the initiative, with potentially significant financial consequences for those that do not.”
As of 2015, the Federal Emergency Management Agency (FEMA) had identified roughly 160,000 repetitive loss properties, defined as insured structures that have been paid two or more NFIP claims of more than $1,000 within any 10-year period. Florida, Louisiana, New Jersey, New York and Texas lead the nation with between 10,000 and 25,000 repetitive loss properties each.
Repetitive loss properties may be eligible for flood-mitigation assistance from the federal Repetitive Flood Claims (RFC) grant program. Among the program’s priorities is to buy out structures that meet the more stringent definition of severe repetitive loss properties – those that have had four or more claims of more than $5,000 or at least two claims that cumulatively exceed the building’s value.
A 2017 study by the Natural Resources Defense Council found that while severe repetitive loss properties represented less than 1 percent of homes insured by the NFIP, they accounted for nearly 10 percent of the program’s claims.
Structures acquired through the RFC program are either demolished or physically relocated, with the vacated land dedicated in perpetuity to open space use. The RFC program is separate from the Flood Mitigation Assistance (FMA) program that offers funds to states and localities for projects to reduce the long-term risk of flood damages.
