Tarpon Springs homeowners fear impending flood insurance rate hikes

Dee Nicholas, 61, and Paul Nicholas, 80, own a house on Riverside Drive and could be hit hard by flood insurance rate increases.
Dee Nicholas, 61, and Paul Nicholas, 80, own a house on Riverside Drive and could be hit hard by flood insurance rate increases.
Published Sept. 27, 2013

TARPON SPRINGS — On Riverside Drive near Kreamer Bayou, many of the residents have lived in their modest homes for decades. They have gotten by with jobs as handymen, construction workers and substitute teachers. Several are retired, living check to check off small pensions or Social Security.

All of them are worried about new flood insurance premiums scheduled to kick in Tuesday.

"Nobody is going to be able to afford it," said Paul Nicholas, 80, who pays about $5,000 a year for flood insurance on his small white house with green trim, which he said is at or below base flood elevation. "It's going to be like the recession all over again."

In Tarpon Springs — 16.9 square miles with waterfronts on the Gulf of Mexico, the Anclote River and several bayous — residents are scrambling to find out whether they will be among the 10 percent of the city's homeowners likely to see flood insurance premiums soar as a result of federal legislation known as the Biggert-Waters Flood Insurance Reform Act of 2012.

The new law is meant to help the Federal Emergency Management Agency recover its multibillion-dollar losses from Hurricanes Katrina and Sandy by removing subsidies that for decades have kept rates artificially low on older homes built below base flood level.

Flood insurance premium hikes on those properties will be phased in at up to 20 to 25 percent a year until the owners are paying the true risk-based rate to insure their homes against flooding.

But for flood policies that lapse, and for homes below base flood elevation purchased after July 2012, the entire subsidy will disappear Oct. 1 and property owners likely will see soaring premiums when they renew their policies.

About 687 homes in Tarpon Springs fall into the category of older homes built in those high-risk flood zones and may see big hikes, though older homes that have been elevated since they were built may not see such drastic increases, said Pinellas County Property Appraiser Pam Dubov.

"It doesn't mean every one of those houses is going to have those astronomical rates," she said. "As I'm reviewing the maps, however, it seems to me that a great many of them are."

Flood insurance is required on all homes in flood zones and financed with federally insured mortgages.

Real estate agents, elected officials and residents fear the impact could be devastating in Tarpon Springs, where property values have already been slower to rise than in other parts of Pinellas County.

George Kouskoutis of Anclote Insurance in Tarpon Springs said he has quoted increases to several clients, including one who bought a 1,600-square-foot house on Riverside Drive in early September not knowing about the new rules. The flood insurance bill for that homeowner is likely to jump from $1,400 to $7,000 next year, Kouskoutis said.

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The law is also expected to eventually affect Tarpon Springs businesses.

"They're going to get hit real hard," Kouskoutis said, gesturing to the row of storefronts on the Sponge Docks that includes Halki Market and Paul's Shrimp House. "This is just another cost to run a business, and it's not a small cost."

As in other places, uncertainty about the law is shaking up the city's real estate market by discouraging people from buying near the water or putting planned purchases on hold, said Omar Abbas, a Realtor in Tarpon Springs.

"Some people are waiting to pull the trigger before they buy something," Abbas said. "And some sellers are flipping out."

If property values fall because of the law, the city tax base could shrink and city tax revenues could fall, potentially impacting city services.

As clamoring about the law has escalated in recent weeks, several communities from St. Petersburg to Dunedin have created task forces and held forums in an effort to answer residents' questions. The Tarpon Springs City Commission recently passed a resolution asking Congress to repeal the law, noting the fiasco it could cause.

"The hope is that something will happen very soon that will give some relief," said Mayor David Archie. "Just a normal increase can be a big problem, but the kind they're talking about is actually absurd."

Brittany Alana Davis can be reached at or (850) 323-0353. To write a letter to the editor, visit or mail letters to the Tampa Bay Times, 1130 Cleveland St. Suite 100A, Clearwater, FL 33755.