The Natural Resources Defense Council has proposed that FEMA institute a specific program to help overhaul the beleaguered flood insurance program
One of the nation's leading environmental groups urged FEMA on Tuesday to create a voluntary buyout program for homeowners living in flood-prone areas as a way to reduce insurance costs for the property owners and damage payouts from the federal government.
As Congress debates the reauthorization of the National Flood Insurance Program, the Natural Resources Defense Council, which has been highly critical of the program and the Federal Emergency Management Agency's approach to post-storm recovery, proposed reforms it says will better serve property owners while reducing the amount of money the federal government pays to rebuild after major storms.
In its six-page report released Tuesday titled "Seeking Higher Ground: How to Break the Cycle of Repeated Flooding with Climate-Smart Flood Insurance Reforms," the NRDC criticizes the current flood insurance program as one that "traps" homeowners in flood-prone areas and keeps the federal government in an endless cycle of paying out billions in taxpayer money to rebuild damaged properties that are destined to face the same perils in future storms.
"The National Flood Insurance Program can inadvertently trap people in a situation that nobody really wants to be in - where they are repeatedly flooded and the only assistance that's offered to them through the flood insurance program is to rebuild their home," said Rob Moore, a climate and flood expert for the NRDC.
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Under the proposal, FEMA would establish a voluntary buyout program for owners of properties that have repeatedly flooded. When the next storm hits and that home in the program is substantially damaged, FEMA would provide the state or local government the money to buy the property, which would then be converted to open space.
The buyout process would be expedited because a property owner would already have received approval before a storm hits, the NRDC said.
The voluntary program would give priority to low- and middle-income property owners because their homes are the ones that typically sustain damage totaling more than the value of the property, consequently not making them cost-effective to rebuild, the NRDC said its studies have shown.
The property owners in the program would qualify for lower flood insurance premiums in the meantime because they would be taking steps to reduce their damage claims, the report said.
The NRDC has criticized FEMA for spending most of its money on rebuilding - rather than relocation - efforts. The environmental group estimated that for every $100 FEMA spends to rebuild, it spends $1.72 to move people to higher ground.
The National Flood Insurance Program, which is $24.6 billion in debt, is set to expire in September and Congress has been debating various ways to revamp the system to make the program more solvent and cost-efficient while still protecting homeowners and not gouging them on premiums.
Moore said some 30,000 properties across the country - representing less than 1 percent of all policies in the flood insurance program -- are deemed a severe repetitive loss, which means they have flooded an average of five times over the past two decades. Yet, they account for nearly 10 percent of all the damages paid by FEMA, he said.
After Hurricane Sandy in 2012, the state Department of Environmental Protection implemented a buyout program in New Jersey that has been concentrated on groups of tracts to maximize the amount of funding the state received from the federal government for that purpose.
The program had targeted using the $300 million in FEMA funding to buy out 1,300 homes. By shifting federal Sandy aid from other areas, the state added another $75 million to the program earlier this year. By April, the state had obtained funding to buy out 934 properties in 14 towns across eight counties and was looking at another 300 homes.
But few of those were at the Jersey Shore, where Sandy's damage was most severe. And in a conference call, Moore acknowledged that the NRDC's proposal would do little to help property owners there who were either unwilling to sell because of their location or because towns would not support buyout initiatives.
"Sadly, that's an all-too common response where communities for various reasons might not be supporting efforts by willing homeowners to perhaps leave their property and move somewhere else," he said.
He noted that towns often discourage buyouts because they face the loss of property taxes, a situation, he said, will be harmful in the long run as sea level rise continues to be a threat.
"That's very short-sighted. The reality is we could be looking at 3 feet to 6 feet of sea level rise in this country by the end of the century and everybody is not going to have the luxury of being able to stay where they're at," he said.
Moore also acknowledged that New Jersey residents would be hard-pressed to find homes that would qualify for this program, but he said it was possible for those areas along rivers, streams and other inland tributaries.
MaryAnn Spoto may be reached at mspoto@njadvancemedia.com. Follow her on Twitter @MaryAnnSpoto. Find NJ.com on Facebook.