How much has the flood insurance crisis watered down property values?
As property appraiser for Pinellas County — which has more properties potentially facing sharp flood insurance hikes than any other county in the nation — Pam Dubov has been wrestling with that question for months.
Now she's asking homeowners for help.
Dubov sent out a survey this week to more than 800 property owners who recently bought homes benefiting from subsidized flood insurance. First question: "Were you aware of flood insurance price increases when you purchased this property?"
Many home buyers have said they were never told flood insurance subsidies were being eliminated for properties bought after July 6, 2012, as part of a far-ranging overhaul of the National Flood Insurance Program passed by Congress.
As a result of that lost subsidy, some homeowners who were paying a few thousand dollars for flood insurance began receiving bills last fall showing their premiums jumped tenfold or more.
The survey also asks for details, such as: whether flood coverage is through the National Flood Insurance Program or a private insurer; the current flood insurance rate and (if known) the prior owner's rate; and for a copy of their elevation certificate plus any other relevant documents.
For tax bills that will be sent out later this summer, Dubov is charged with determining a home's appraised value as of Jan. 1, 2014.
Initially after news of the flood insurance overhaul spread this summer and fall, the number of transactions in flood-prone neighborhoods like Shore Acres dropped dramatically — but there has not been a similar drop-off in home prices. At least not yet.
Dubov is concerned that some property owners who see neighbors struggling to sell their homes will wonder why their houses have higher appraised values than a year ago.
She believes some sales may be cash buyers who have decided to go without flood coverage.
"We're trying to determine if all those sales that did occur had circumstances that made flood insurance a non-issue for the purchasers," she said.
The Biggert-Waters Flood Insurance Reform Act of 2012 takes a measured approach in phasing in some rate hikes.
Typically, owners of older homes in flood zones that were subsidized through the flood program will see annual rate increases of about 20 percent.
But in some cases, such as a lapsed policy or sale of a home, the subsidy is eliminated immediately.
Although the change affects all buyers of subsidized properties after mid 2012, Dubov's survey only targets buyers in the last half of 2013.
Only about 20 percent of flood policies nationally had been subsidized. But Florida was disproportionately affected, with a bull's-eye on Pinellas County. Before the hikes started taking effect, Pinellas had more than 50,000 subsidized properties out of the 432,000 parcels on county tax rolls.