Today, U.S. Representative Ed Royce (R-Calif.) questioned expert witnesses about his proposal to help local communities mitigate flood risk and ways to increase transparency in flood insurance coverage for homeowners during a Housing and Insurance Subcommittee hearing entitled “Flood Insurance Reform: A Community Perspective."
“Mr. Hecht, you testified that, ‘Of course, no private market provider will choose to write FEMA’s severe repetitive loss properties.’ And really that’s no surprise, because repeatedly flooded properties make up one percent of those insured by NFIP, but it represents 25 to 30 percent of all the flood claims. They are not a ‘good risk’ for private insurers or the American taxpayer. Today, Congressman Blumenauer and I introduced, a bill, H.R. 1558, this is the Repeatedly Flooded Communities Preparation Act, and the concept here is to proactively reduce flood risk instead of continuing our current model of rebuilding these properties over and over again.
The way we do it, and let me just give you by way of example, we got a couple of cities here: Tulsa and Charlotte. Both have had very pronounced success in decreasing flood risk because what they did was proactively take on a plan for storm water management, promoting voluntary buyouts, sometimes that can be effective, reviewing new development proposals for flood impacts, and steering development away from risky areas. So that’s part of their plan Many of their peers though, many of the other cities and communities have not kept up with that kind of approach. So, what this bill would require, is that communities with a large amount of repeatedly flooded properties to implement plans, to have that city council or those counties put forward that plan for lowering flood risk and then, in terms of keeping the records, holds them accountable for failing to act. I would just ask for thoughts on this issue,” said Rep. Royce.
“And I would also ask a follow up question that I wanted to get to. Do you think the home buying public truly grasps flood risk? Is this registering with them? Do they understand how subject to hazard their property is when they talk with their realtor? Do they understand how flood risks change over time when areas nearby are developed or when a forest fire might occur? So maybe I could ask the panel also on that aspect about recommendations for how we can change this lack of education on flood risk. Besides just what we can do at the county level or city level, how do we improve take up rates for flood insurance and strengthen these mitigation efforts?” asked Rep. Royce.
“My statement that 'of course we would not want to write severe repetitive loss properties' is a statement that we would not want to write severe repetitive loss properties at rates that were competitive with FEMA, because FEMA charges much too little for the severe repetitive loss properties. [Per] the Wharton study last year, regarding consumer recognition of flood risk, consumers… think their property is going to flood more than it actually does, they overestimate that, but they underestimate the amount of damage an actual flood would do,” answered Mr. Hecht, Chief Executive Officer of the Flood Insurance Agency.
“Congressman Royce, we’ve taken a look at the legislation you and Congressman Blumenauer have introduced. We’re supportive, and one of the things we like about it is that it does have a measure of accountability. Under current law, which comes from the Stafford Act, community mitigation plans are required to at least assess how many repetitive loss properties there are. But it doesn’t really require them to do anything about it. So I think the innovative element to this legislation is that it does have some requirements there to actually do some planning and actual mitigation, or face some potential consequences. In terms of broader education and awareness of risk…we’ve got to, first of all, map all of these areas in the country. Oroville Dam, I think, is a great example in California. 200,000 people evacuated, far beyond what the mapped flood plan showed, yet how many of those people knew that they were in… a dam release inundation zone? Probably none of them. Because that information, while it has been produced, is not publicly available,” added Mr. Chad Berginnis, Executive Director of the Association of State Floodplain Managers.
Watch Rep. Royce's questioning here or by clicking the image below.