Today, U.S. Representative Ed Royce (R-Calif.) questioned a witness from the Federal Emergency Management Agency (FEMA) about the need for greater flood risk mitigation and transparency during a Housing and Insurance Subcommittee hearing entitled “Flood Insurance Reform: FEMA’s Perspective.”
“My question is sort of a follow up on the Chairman’s question concerning repetitive loss properties. I actually have bipartisan legislation with Mr. Blumenauer from Oregon on this. One of the things we seek to do here is empower communities to tackle this problem and we’d like to work with you on that legislation. The precise numbers change from time to time, but the bottom line seems to be that a small fraction of policies, let’s say it’s roughly 1% of the policies, seem to account for somewhere between 20% and 30% of the claims and losses. In ‘09 the Department of Homeland Security’s Inspector General said that an increase in new and repetitive loss properties was outpacing what we were attempting to do in terms of mitigation by a factor of 10 to 1. Now that is a troubling number. Have our mitigation programs began to catch up, as in have the numbers turned lately or does it look like we are still growing the number of repeat loss properties? Can you provide the Committee with the most up-to-date data on that?” asked Rep. Royce.
“So I can get back to the Committee on the specifics on the data and I look forward to the opportunity to collaborate with you all as you look at potential legislation. The number continues to rise,” answered Mr. Wright, Deputy Associate Administrator of Federal Insurance and Mitigation Administration, FEMA.
"The other point I would make is just taking FEMA’s current guidance document on the Community Rating System, as it relates to potential homeowners, and I think it is pretty cogent here:
'Most prospective buyers do not take the time (or know how) to investigate whether a property is subject to a hazard. In many cases a property may not be near a shoreline or a stream, past flooding may have been minor, or there may be no history of flooding since the area was developed. As a result, many people are caught by surprise when the properties are flooded. One of the best times to advise someone of a flood hazard is when he or she is considering the purchase of that property.’
So as I understand it, FEMA gives credit to communities that are able to work with local realtors and the community to push this sort of pre-closing flood disclosure.” said Rep. Royce.
“We do and we offer discounts on the premiums on the result of those activities,” said Mr. Wright.
“And I think that is helpful, and my question is, what more can FEMA or what more can Congress do to ensure the American people aren’t in the dark when it comes to flood history? Won’t we improve take-up rates for flood insurance and strengthen individual and community mitigation if we better inform communities and people about flood risks when they’re looking at potential properties or developing potential properties?” asked Rep. Royce.
“So this is a conversation that I have a couple of times a year with the realtors who obviously become that first forward leaning part of this conversation. And we’ve had conversations with some of the private sector app developers that we all know well that provide data on the values of homes and what is for sale. I think greater disclosure about the risks on the front side are very helpful, some states require this, and most states do not," answered Mr. Wright.
“As we look at what different states are doing, we can get feedback of what seems efficient, what seems easy, and what is effective in getting to this conclusion,”stated Rep. Royce.
“I think there are some things to be learned from your state of California that does have some responsive requirements related to earthquake risks, related to dam safety risk and the like. There’s things that could be learned from there,” said Mr. Wright.
Watch Rep. Royce's questioning here or by clicking the image below.