Senate Leaders Introduce Flood Reauthorization
Chairman Mike Crapo (R-ID) and Ranking Member Sherrod Brown (D-OH) of the Senate Banking Committee introduced bipartisan legislation in mid-July to reauthorize and reform the National Flood Insurance Program (NFIP). Congress is working aggressively towards advancing a reauthorization package before the program expires at the end of September.
NAA/NMHC worked closely with the Committee on a wide range of issues and was successful in securing inclusion of many of our industry priorities in the legislative package. In addition to a six-year reauthorization of the program, the package includes improvements in the mapping process and provides for a continued investment in pre-disaster mitigation. Of particular importance to the apartment industry are several provisions that aim to better allow owners and operators to protect their properties from the continued risk of flood disasters, such as:
- Boosting the Increased Cost of Compliance (ICC) mitigation funding from $30,000 to $60,000 with the option to purchase additional ICC coverage at full actuarial rate up to $100,000 per property. Notably, the bill ensures that moving forward ICC claims will not count against standard flood insurance policy limits.
- Requiring Federal Emergency Management Agency (FEMA) to provide premium reduction to apartment property owners to account for alternative methods of mitigation, such as utility system elevation, since they cannot benefit from traditional steps such as building elevation.
- Ordering the FEMA Administrator to study the feasibility and soundness of offering business interruption coverage, something NAA/NMHC have long called upon the NFIP to offer to apartment property owners so they can recover and get residents back into their homes faster in the wake of a disaster.
The bill was released on the heels of a letter by NAA/NMHC and a number of other real estate trade groups that urged the Committee to act swiftly on reauthorization and that they adopt many of these same reforms.
As the Committee looks to consider the bill, stakeholders such as NAA/NMHC and Committee members will continue to offer suggested changes, including language that fosters a more viable private flood insurance market and reduces the regulatory burden on apartment properties needing to comply with overly complex federal purchase requirements.
While the path forward in the Committee and the full Congress remains uncertain, leaders of both the House and Senate are committed to reauthorizing the program before Sept. 30.
Provided by NMHC as part of the NAA/NMHC Joint Legislative Program