Time To Wake Up: We Must Save the NFIP from Drowning
As-prepared for delivery
I’m grateful to the Senior Senator from New Jersey for joining me again this week to bring attention to the challenges climate change poses to our coastal communities.
Our states shared the experience of Superstorm Sandy, which roared ashore on higher and warmer oceans, and we know how vulnerable we are.
As sea levels rise and storms intensify, the National Flood Insurance Program should be one of our government’s best tools to educate and ready our communities for the changes carbon pollution is driving our way. But the program falls well short of this basic goal. And instead of tackling its shortfalls head-on, ahead of the next big storm, we’re getting set¾yet again¾to punt.
My Ocean State has 400 miles of coastline threatened by sea level rise and storm surge flooding; telling homeowners and coastal businesses “we’ll get to it eventually” isn’t good enough.
Our risk is growing, not shrinking. A 2017 Zillow report identified over 4,800 homes in Rhode Island, valued at nearly $3 billion, that would be underwater by 2100, using an optimistic estimate of six feet of sea level rise. Rhode Island’s Coastal Resources Management Council is now planning for our state to see up to nine to twelve feet of sea level rise by then. New Jersey has even more at risk, with over $93 billion worth of property predicted to fall to rising seas.
This problem doesn’t arise in 2100. It hits earlier, when 30-year mortgages and insurance are hard to come by, because banks and insurers foresee these risks.
Last year, GAO reported that coastal areas face particularly high financial risks, and that annual coastal property losses from sea level rise and increased storms will run into the billions of dollars every year in the short run, and over $50 billion every year by late century. GAO pointed to an EPA estimate of “$5.0 trillion in economic costs to coastal property from climate change through 2100.”
According to the Union of Concerned Scientists, sea level rise will double the number of coastal communities facing “chronic inundations and possible retreat” by 2035.
Investors, creditors, and appraisers are taking notice. Last December, credit rating agency Moody’s adopted indicators “to assess the exposure and overall susceptibility of U.S. states to the physical effects of climate change.” Moody’s looks particularly at coasts, and at the share of a state’s economic activity generated by its coastal communities. It counts the homes built on flood plains, and the risk of extreme-weather damage as a share of a state’s economy.
The managing director at Moody’s told the Chicago Tribune that Moody’s would be taking these risks into consideration when evaluating the credit ratings of municipalities and states.
Property appraisers are also starting to incorporate these risks into their work. The Appraisal Institute’s Valuation magazine quoted Rhode Island appraiser Brad Hevenor’s warning that homes that receive a 30-year mortgage today “might be completely different types of property [by the end of their mortgage] than they are today.” He points out that FEMA flood maps are backward-looking and often insufficient for predicting future risk.
My frustrations with FEMA’s flood risk maps are no secret. They are notoriously inaccurate, incomplete, and outdated. The agency’s modeling is often based on inaccurate data and methodology from the 1970s. It has proven particularly incapable of accurately capturing the different wave and dune dynamics that determine real flood risk along coasts during major storms.
The Rhode Island Coastal Resources Management Council has developed its own models to provide better risk information to coastal residents and communities. The contrast between the state’s work and FEMA’s maps highlight just how costly—and potentially life threatening—reliance on FEMA’s maps can be.
This map is FEMA’s flood estimates relative to mean sea level for a 100-year storm hitting Charlestown, RI. The worst flooding for the homes that surround Ninigret Pond looks to be around 14 feet. (Note this overly simple FEMA map projects flood risk indiscriminately on land and water.)
This map shows the CRMC’s model for the same area, which more accurately reflects the reality of waves and dune destruction during hurricanes and other storms along our coast. It projects homes in this area may see closer to 20 feet of floodwaters. FEMA’s map underestimates flood risk by 6 feet.
It’s not just Rhode Island.
Rice University and Texas A&M found that FEMA flood risk maps only captured about 25 percent of the actual damage from storms that hit Houston between 1999-2009. According to the Houston Chronicle, more than half of homes damaged by Hurricane Harvey were not listed in any flood risk areas, meaning they were not required to have flood insurance or meet any flood-risk mitigation building codes.
Yet, Congress continues to fund these maps on the cheap, leaving Americans to bear the risk of antiquated models that don’t reflect the changes expected along our coasts. Families are forced to endure the repeated damage and destruction of their homes, and taxpayers are made to pay the cost of over and over rebuilding the same building in the same place that washed away.
After Hurricane Harvey in 2017, the flood insurance program hit its $30 billion borrowing limit. We maxed out. So in October 2017, Congress had to forgive $16 billion of that debt, to pay out claims from Hurricanes Harvey, Irma, and Maria.
The program is currently at least $20 billion in debt; claims from the 2018 hurricane season continue to be processed. The Congressional Research Service, as of September 2018, found the program had only $9.9 billion of remaining borrowing authority.
It’s time to get serious about reforming this broken system for a changing climate, and changing coasts. The current system often leaves homeowners no option but to rebuild the same building on the same site. CRS estimates that only about 2 percent of current NFIP-insured properties are considered “repetitive loss” or “severe repetitive loss” properties, but that 2 percent accounts for 16 percent of claims, or $9 billion. Over the life of the NFIP, repetitive loss or severe repetitive loss properties have totaled around 30 percent of all claims, about $17 billion.
Insurance should allow homeowners to walk away from flood-torn structures and go find new, safer homes. Currently, only states or municipalities can use FEMA to arrange buyouts of flood-prone properties. FEMA provides up to 75 percent of funding for local governments to acquire these properties at fair market value. The property then remains open space. But the buyout process is cumbersome, is not in the hands of the homeowner, and doesn’t get much use, since it’s difficult for a mayor or city council to encourage constituents¾the tax base¾to leave.
The flood program should work with communities to plan for cost-effective resiliency to flooding, whether it be elevating properties, moving homes, or retreating. Homeowners should have those options. It is willful blindness to ignore this problem as seas continue to rise and storms become more unpredictable and ferocious.
Property owners and communities deserve proper warning about the flood risks they face, and alternatives to rebuilding the same building in the same place.
Mr. President, with so much at risk for so many Americans, it is time to wake up and put in place a smart, reliable system once and for all.
I yield the floor.
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