Flood insurance is proving to be a challenge for more than just hard-hit homeowners and those who want to lighten the federal deficit. It is pressing Democrats into positions that appear to conflict with their commitment to act quickly to mitigate the damages posed by climate change.
The underpriced policies of the National Flood Insurance Program have long been blamed by environmentalists and taxpayer groups for encouraging construction and continued dwelling in floodplains. Over the long term, that puts people in risky areas and multiplies the damage from disasters like Superstorm Sandy.
So it raised eyebrows when some lawmakers who champion climate change action introduced a bill yesterday to halt legislation that was passed last year to phase out suppressed insurance rates on flood-prone buildings.
Jeff Tittel, director of the New Jersey chapter of the Sierra Club, said the involvement of Sen. Robert Menendez (D-N.J.) shows how quickly tough talk on climate change can wilt under pressure from voters.
Tittel blames the underpriced flood insurance for sharpening the program's debt, now at $24 billion, and undermining efforts to convince coastal residents to raise their homes above flood stage.
"I'll try to say it nicely," Tittel said. "There's this balance between doing what's right for sea-level rise and climate change and getting people out of harm's way, and then dealing with angry constituents who want to rebuild in exactly the same place and the same way and want to get subsidized."
He said the climate policies rarely win.
As an example, Tittel said, Menendez could have supported the Federal Emergency Management Agency's finding last winter that expanded high-risk "velocity" zones on floodplain maps. These are some of the most dangerous areas to live in because they are exposed to unblocked waves.
Instead, the senator and other lawmakers urged FEMA to ease those restrictions, which include elevating homes higher, or paying more for insurance, he said. Both of those things could reduce damage and taxpayer losses when another storm strikes.
"You have elected officials that are trying to do the right thing, but then they get this backlash, and then they end up taking the path of least resistance," Tittel said.
'We're talking about adaptation'
The tension between pleasing constituents and enforcing climate policies was evident yesterday, on the anniversary of Superstorm Sandy.
A bipartisan group of senators and House members came together in an unusual partnership to stop the Biggert-Waters Flood Insurance Reform Act from raising discounted rates until 2017. The delay is meant to give FEMA time to study how the hikes would affect the program's 1 million policyholders receiving subsidies. The agency would then have to propose regulations to help those who can't afford the increases.
"America is rising up against the unfairness of flood insurance," said Sen. Charles Schumer (D-N.Y.). "It's amazing. People who have spent a year struggling to rebuild their homes may lose them in a year or two because the flood insurance rates are so high. It is just not fair."
Biggert-Waters was passed last year to phase out subsidies embedded in 438,000 policies on second homes, businesses and repeatedly flooded houses. Additional policies with discounts will see rate hikes beginning late next year as new flood maps take effect. It would not have immediately affected 715,000 subsidized policies.
The hikes are painful for many families who can't afford to raise their homes after experiencing damage during Sandy, lawmakers say. The increases also stand to disrupt the housing market because the subsidies are canceled when the home sells. Some families fear that the hikes will prevent them from selling their homes.
"This is a real threat to the economic well-being of many communities," said Sen. Mary Landrieu (D-La.)
Among the lawmakers seeking the delay was Sen. Ed Markey (D-Mass.), one of the most outspoken politicians on the issue of addressing climate change. He said there was no tension between his climate goals and slowing down flood reform.
"No. Again, we're talking about adaptation," Markey said in a Capitol hallway, referring to rate increases for flood insurance. "We're talking about the changes that have to take place, but we have to make sure they're done in a way that doesn't result in harm being done, again, to innocent victims of this change."
Menendez, when asked the same question, said that climate policies are a separate issue.
"From my own personal view, I think climate change is an important thing," he said. "But for this coalition, we have one singular focus. And that focus is making sure that middle-class families do not get priced out of what they have spent a lifetime to achieve, which is their home. Those other issues from my own perspective are critical issues, will be dealt with separately. But with the purpose of this legislation, we are united and focused on one goal, which is to create the affordability that's necessary."
Study: Climate change will increase flooding
Analysts say the program faces broader challenges than keeping prices low. A RAND Corp. study released this week examining the state of flood insurance in New York City after Sandy found that flood maps in place before the storm underestimated the danger of flooding.
When FEMA released its new maps in June, greatly expanding high-risk areas, nearly twice as many structures and people fell into those hazardous areas. The maps also raised the depth of floodwater in high-risk areas by 2 to 4 feet.
"These changes reflect a realization that flood risk in the city is higher than previously thought," the study says. "And the risk will likely increase over time, putting more structures at risk because the updated map does not capture the consequences of future sea-level rise or the greater frequency of severe storms that might result from climate change."
What's less clear is how much people will have to pay for risk-priced flood insurance, and the impact on the program. Lawmakers contend that they were surprised by the size of hikes sparked by Biggert-Waters.
With the uproar growing inside and outside of Congress, environmentalists and taxpayer groups are urging lawmakers to find other ways to help people afford coverage without dismantling Biggert-Waters, which was seen as a landmark victory for the insurance program that took years in the making. Advocates say that without the threat of higher prices, homeowners won't feel pressure to mitigate their risks by raising their homes or leaving dangerous areas.
"In an ideal situation, instead of delaying [Biggert-Waters], we'd find more ways to slow down the rate of increase and help people mitigate in the meantime," said Joshua Saks, legislative director of the National Wildlife Federation.
Two years ago, Sen. Richard Durbin (D-Ill.) broke the Senate's long silence on climate change by holding a hearing on flood insurance. After a bruising battle on greenhouse gas cap-and-trade legislation scuttled progress on climate policy a year earlier, the hearing marked a subtler way to approach climate adaptation -- by fixing existing programs that have long contributed to disaster damage.
At the time, Durbin said Congress should heed lessons from the private insurance industry, which he said is responding to rising damage with the "cold eye of a bookkeeper or accountant."
"They want to know what their exposure would be and whether it's profitable to continue to write insurance," Durbin said after the hearing. "We don't deal with our insurance exposure the same way. We make political decisions about keeping costs low or covering everybody no matter where they live. And we're exposing ourselves to a great loss in the future beyond what we've seen in the past."
Fifteen months later, Superstorm Sandy struck the East Coast. That increased the program's debt from $17 billion to more than $24 billion. Durbin also foreshadowed something else: the political challenges with raising insurance rates.
He was asked by a reporter if he supported raising flood rates for the program's 1 million policyholders who receive subsidies. He said no.