The National Association of Home Builders (NAHB) has applauded the Senate passage of the Homeowner Flood Insurance Affordability Act (S. 1926), legislation that would provide relief from soaring flood insurance premium rates for many homeowners across the nation. The legislation contains an amendment by Sen. Roy Blunt, R-Mo., which is critical to the health of the remodeling industry.
“The bill will resolve some of the costly and unintended consequences of the Biggert-Waters Flood Insurance Reform Act, including huge premium spikes and impacts on the sale, construction and remodeling of homes across the nation,” said NAHB Chairman Rick Judson.
The Homeowner Flood Insurance Affordability Act would:
• Delay insurance rate increases for all primary residences until an affordability study is completed;
• Require that the Federal Emergency Management Agency (FEMA) take into account all local flood control structures while mapping;
• Allow consumers to appeal FEMA’s mapping decisions and to be reimbursed for their appeal expenses; and
• Reinstate an exemption in 53 communities nationwide for basements that are built a certain way.
Sen. Blunt’s amendment would return the “substantial improvement threshold” that triggers a higher flood insurance rate to the historic 50 percent level of a structure’s fair market value, which is important for many remodelers across the nation.
When the threshold was lowered to 30 percent under the Biggert-Waters Flood Insurance Reform Act, it acted as a potential disincentive for homeowners to hire remodelers, as even the simplest of remodeling jobs, like installing new appliances or updating bathrooms or kitchens, could have resulted in many homes reaching the 30 percent threshold and triggering higher premium rates. NAHB estimates that returning the threshold to the 50 percent level could preserve as much as $8.5 billion in annual remodeling economic activity.
“These provisions will help prevent undue hardship in the recovering housing market, help current and future policyholders keep their premiums affordable, protect home values and make the National Flood Insurance Program more effective,” Judson said. “We urge the House to act on a companion bill soon.”
Resolving the issue of flood insurance affordability is important to keep the housing recovery on track. NAHB commends Sens. Robert Menendez, D-N.J., Johnny Isakson, R-Ga., Mary Landrieu, D-La., David Vitter, R-La., Thad Cochran, R-Miss., John Hoeven, R-N.D., and Heidi Heitkamp, D-N.D., for their efforts to pass the bill through the Senate.