The U.S. House's proposed legislation to provide relief from soaring flood insurance rates is the most encouraging sign in weeks for Florida homeowners who can't afford the new premiums or sell their houses. The new, bipartisan plan provides a thoughtful approach to fixing problems created by the 2012 Biggert-Waters Act and should set the stage for negotiations with the Senate on a reasonable solution to a manufactured crisis that Congress created. As the real estate market sputters in some neighborhoods, it's important that Congress keeps moving forward.
A major philosophical difference still exists between the House and Senate. The House bill released Monday is viewed as a long-term fix for the deficit-ridden National Flood Insurance Program. It would continue to reduce premium subsidies for homes built before flood zone maps were drawn, but on a more gradual slope than existing law. It also would no longer automatically eliminate subsidies when a property is sold. The Senate bill would establish a four-year delay on Biggert-Waters' rates for homeowners, with an eye to considering later, broader reforms after addressing questions about how the program's rates are set and how flood maps are drawn. NBC News reported last week that at least 500 times in recent years, wealthy waterfront property owners in Florida and elsewhere have quietly and successfully appealed federal flood map changes, winning lower premiums while their neighbors still face higher rates. It is unfair that those with the most money and the best connections are being treated differently than typical homeowners.
Both the House and Senate plans call for continuing Biggert-Waters' aggressive schedule to eliminate subsidies for commercial properties built before flood maps were drawn. Both also would give the Federal Emergency Management Agency more resources to conduct an affordability study. But the House also envisions levying assessments of $250 on commercial properties and $25 on homeowners to pay off the program's $24 billion debt.
Many of the House details deserve a harder look. The plan would limit annual increases in a single risk classification to 5 to 15 percent on average. But that still could mean owners of older homes could see their premiums grow faster, even matching the 20 percent increases under Biggert-Waters. Also worth examining is the House's plan to keep premium subsidies given to homes when revised maps place them in higher-risk flood zones. The phaseout of those subsidies and subsidies for homes built before any flood maps existed is too abrupt in the current law. But the House should explain why it would keep premium subsidies for homes affected by revised flood maps (known as grandfathering) but not for homes built before any maps were drawn at all.
There is still compromise to come, but the House should pass some version of its plan this week so negotiations can begin with the Senate and homeowners can get some relief from a fundamentally unfair flood insurance law. The House leadership is finally giving this issue the attention it deserves, and Florida's House members should keep up the pressure.