When You Think Progress is Being Made, Reality Bites

Photo courtesy of: Architect of the Capitol 

By Mark E. Ruquet

Just when we thought there was progress on the flood insurance rate rollback, the opposition gets some additional ammunition to do nothing to help average Americans.

Progress is coming in the form of a scheduled vote on the roll back bill (S 1846) in the Senate scheduled for today.  The good news is the bill has 30 sponsors. The bad news is that it will take 60 votes to keep the bill progressing through the Senate should any of the legislators object and threaten to filibuster, pretty much stopping the bill cold in its tracks. Keep your fingers crossed.

Across the Capitol building, we know Speaker of the House John Boehner, R-Ohio, has indicated he won’t bring the Senate’s bill up on the House floor. That means if we want to get anything done, we’ve got one nasty fight ahead of us to raise the attention of Congress and make them realize that their negligence will result in the loss of votes come re-election. There are currently 180 Congressmen and women co-sponsoring the House version of the Homeowner Flood Insurance Affordability Act (H.R. 3370) with a substantial contingent of New York and New Jersey representatives co-sponsoring the bill.

Here again, it is a math issue. We need a majority. There are 435 seats, and the Republican’s hold the bulk of those seats. On the positive side, this is not a partisan issue, but there are Democrats aligned with conservative Republicans who feel flood insurance policyholders should be paying the National Flood Insurance Program’s deficit of $24 billion. It’s not the fault of the policyholders that Congress created a flawed program in the mid-1960s. Yet, we’re getting stuck with the bill. It will take 218 Congressmen, if not more, to convince Boehner that it is in the House’s interest to come up with some credible plan that does not bankrupt more than 5 million American homeowners trapped in this onerous cycle of escalating premiums.

Unfortunately, critics of the flood insurance roll back got some ammunition last week from the well respected Government Accountability Office, which focused on the question of what it will take for more private sector insurers to write flood insurance policies. The report’s bottom line is that insurers will start writing flood policies once premiums have risen high enough that they can make a profit.

Tellingly, the GAO did paint a realistic picture of what the program faces if the private insurance industry is to write flood. While insurers would charge what they feel is the cost of the risk, they need enough policyholders to “to properly manage and diversify their risk, but stakeholders (insurers) said that many property owners do not buy flood insurance because they may have an inaccurate perception of their risk of flooding.” The GAO also points out that the “rates might seem unaffordable to many homeowners.”

Should the flood insurance reform bill falter in the House, or become stalled in the Senate, maybe the GAO report can serve as a basis for compromise to provide relief for us. Among GAO’s suggestion is to allow the subsidies to lapse, but provide “direct means-based subsidiary to some policyholders”—a suggestion that only works for the majority of middleclass Americans if the threshold for assistance is high enough.

The other suggestions involve realigning the program either as a residual insurer (an insurer of last resort) or as a reinsurer. Without getting into the nuts-and-bolts of either—neither would help us in the short-term.

The GAO made no new recommendations. However, if anyone was curious about where Congress got the original idea supporting the increases we are suffering today, look no further than the GAO’s report in June 2011 (GAO-11-297) that said, “that Congress consider eliminating subsidized rates, charge full-risk rates to all policyholders, and appropriate funds for premium assistance to eligible policyholders to address affordability issues.”

We have a long way to go folks. 

Some Advice for Keeping the Kids Warm

A little something for these chilly days ahead from Ready.gov for the kids during these chilly days.  Don't think there will be any let up soon from the sounds of it. Stay warm.

Palazzo addresses myths surrounding flood insurance increases

Mississippi Congressman Gets it Right on Flood Insurance

Rep. Steve Palazzo, R-Miss., addressed the House recently
addressing the plight of many Americans hit with
oppressive flood insurance rate increases.

By Mark E. Ruquet

While we on the East coast are battling to see Congress rollback disastrous flood insurance reforms, we can take heart that there are others elsewhere in the United States recognizing that this is a national crisis in the making and the ruinous rate increases need to be rolled back.

Last week, Rep. Steven Palazzo, R-Miss., addressed the House of Representative in a special order on the House floor to bring attention to the plight of millions of homeowners affected by these onerous rate increases.

Palazzo's observations echo what many of us are experiencing and strongly refutes critics who say the only people seeking this rollback are the rich.

“There are those who have said: these people are just a bunch of wealthy, waterfront homeowners," Palazzo told Congress. "That’s simply not true. I can tell you that is not the case in my district. I’m hearing from teachers, veterans, fishermen, people who work at the shipyards in support of our Navy."

We do not have shipyards here, but he is describing us, working class Americans--many of us laboring to make ends meet--and under threat of rate increases that if not rolled back will cause homeowners to file for bankruptcy or walk away from their homes.

The economy is just beginning to recover. It is a fragile recovery. Does anyone think that another serious disruption to the housing market won't drive this economy back into Recession?

Let's not let up and keep speaking out about the harm these ill advised increases of Biggert-Waters Act are doing to America's homeowners.

Take a listen to Rep. Palazzo's speech click here.

Midland Beach Buyouts

By Mark E. Ruquet

The take away from last night’s meeting of the Midland Beach Civic Association was if you have any interest in having your house brought out by the state—get on the list. You are under no obligation to sell your home and no one will force you to do so.

Members of the civic association board met with city and state officials recently to discuss plans to buyout homeowners affected by Superstorm Sandy. What they had to say was both encouraging and discouraging. This process is taking too long, the board members said, but some homeowners are now closer to a resolution to their situation than they have been in over a year.

There are two buyout zones. One is the enhanced buyout where New York state buys the home and demolishes it. The section runs from Father Capodanno Blvd. inland to Haven Ave. within the area of the creek and wetlands. There will be no new construction on the site. The property will become part of the Blue Belt zone to become a natural drainage area that should resolve much of the flooding in the Midland Beach areas that continuously deal with this issue.

Homeowners in the enhanced buyout zone will receive the value of their home pre-Superstorm Sandy plus 10 percent for not re-building and an additional 5 percent if they remain in Staten Island. The committee wants homeowners interested in this portion of the program to get their letter in by this weekend. All that is required is name, address, lot and block number and a signature along with a note stating interest. The association has a pre-printed form that requires the homeowner's information as described, and nothing else.

For homeowners outside of the enhanced zone, there is the buyout for redevelopment. These homeowners will be eligible for a state buyout at pre-Sandy value. The state or city will attempt to sell the home to a contractor for rebuilding on the site. However, homeowners on lots of 20 by 100-the bungalows-may have trouble because city zoning forbids building on lots that size.

This is conjecture on my part, but the obvious solution would be to combine lots and make them acceptable for zoning laws and contractors. However, that is another battle for another day.

In the meantime, if you are a Midland beach resident and might have some interest in the state buying out your home, get the form from the civic association and get yourself on the list. The more that show interest the more compelling a story the civic association can tell to state and city officials.

You have to give credit to the board members of the Midland Beach Civic Association. They have worked hard for the benefit of residents in these neighborhoods. The least residents here can do is give them a round of applause and get on the list if there is only a hint of interest in your mind.

To 2014, Hopeful Again, But Disappointment In the Air

The New Year brings hope, but does
disappointment linger in the air.

By Mark E. Ruquet

Me, like many others, are hopeful that 2014 will be the beginning of a better year than 2013. Then again, I said that for 2013 at the end of 2012, and said the same for 2012 at the end of 2011. My memory doesn’t reach back further at the moment, but I feel it's not a recent sentiment.

The reality is that as much as we hope life will improve in the New Year the issues that hounded us in the prior year haunt us into the new. It’s a question of resolving issues from the past and our hope that life takes an upswing. Yes, reality is a disappointment.

Taking stock of what the major issues facing us today, those of us in the fight against oppressive flood insurance increases have some positives on our side. Sen. Mary Laundrieu (D-La.) posted on her website an article from the Times Picayune that supporters of legislation to rollback the increases have adopted a new strategy to move the bill ahead after the Senate returns. Unfortunately, there is solid opposition from the Republican ultra-right that is seeking to deny Laundrieu any legislative victory as she faces re-election.

To say the least, this is a mixed message, with no guarantee of success. If the bill passes the Senate, it faces an uncertain future in the House where Republicans dominate. However, since numbers translate into votes, if we make our voices heard maybe we could bring legislators to their senses.

Consider this, NOAA’s State of the Coast map shows that more than 16 million people, five percent of the U.S. population, lives in coastal floodplain. More than 800,000 of that 16 million live in New York alone. Not all of those homeowners may buy flood insurance, but in the wake of Superstorm Sandy in 2012 and Hurricane Irene in 2011, many who received federal aid are required to buy flood insurance and face bankrupting rate increases. A vocal, committed chorus of homeowners should sway the majority of legislators to do the right thing and take a step back from this ruinous law.

In New York and New Jersey, for the most part, we can be confident that our legislators understand our predicament and are working to help us. Locally, one would think this is a no brainer and many New York City officials would be speaking out in support of homeowners. However, as many residents still struggle to get back into their homes or worry insurance rate increases will drive us away, Bill de Blasio was silent on the issue in his inaugural address.

As is the custom among politicians, an inaugural focuses on broad themes. Indeed, the mayor’s remarks focused on the inequality within the five boroughs and the promise the city can do better.

“We are called to put an end to economic and social inequalities that threaten to unravel the city we love,” said de Blasio, adding that he will take “dead aim” at seeing this come to pass, while acknowledging it will not be easy.

The mayor has grand plans. While we hope he moves the city to a better place, it would have been nice if he had reached out and remembered those of us who suffered one of the most devastating tropical storms to hit the Northeast in decades and are now victims of one of the most devastatingly shortsighted Congressional reforms in recent memory.