Your HBA as working for you in Washingting (here is how)

(September 20, 2017) Ever wonder what your Home Builders Association is doing for you in Washington DC and around the country?  Below is a report of the issues on which we are engaged:

1. Canadian Softwood Lumber

• The U.S. Department of Commerce imposed a 20% countervailing duty on Canadian lumber imports in April, and added 7% antidumping duties in June. 
• In late August, Commerce announced a delay in the final duties to Nov. 18. This will allow more time to negotiate a settlement. Collection of countervailing duties is suspended for now, but antidumping duties will continue to be collected. 
• NAHB is meeting with representatives with the Trump Administration and Congress as well as Canadian officials to address home builder concerns regarding price and availability of lumber. 
• These meetings are especially important because U.S. consumers cannot participate in trade disputes, although NAHB provided witness testimony during the International Trade Commission hearing on Sept. 12. 
• Generally, lumber prices have increased, but that may be partly due to wildfires in the Western U.S. and Canada. 
• NAHB is urging U.S. lumber producers to increase production for domestic consumption, and working to identify alternate foreign sources of dimensional lumber. 

2. Disaster Response

• In the aftermath of two devastating hurricanes, NAHB is working closely with state and local home builder associations in those areas to help them meet the needs of members affected by the storms. 
• We sent out an all-member email with information on how to donate to the recovery effort. 
• NAHB issued statements on hurricane-related advocacy. Our leadership conducted media interviews on flood-related topics, including the need for the National Flood Insurance Program (NFIP) reauthorization, building codes, rebuilding efforts and labor shortages. 
• We updated our online Disaster Recovery toolkit with new media talking points and safety information for contractors. 
• We added resources on hiring contractors and places to donate on our consumer Web page. 
• We are creating resources on business continuity; hiring reputable contractors; and best practices for flood damage repair work. 
• We will continue to reach out to the affected communities to see how to help in the rebuilding efforts. 
• With respect to resiliency, our Resiliency Working Group issued its final report and recommendations in July. Many of the recommendations are related to disaster preparedness, resiliency, recovery and communications. 
• The hurricanes have illustrated the importance of disaster response and planning for rebuilding, and the Resiliency Working Group will now help ensure NAHB can be a resource and problem solver after a natural disaster. 

3. Electronic Recordkeeping

• The Occupational Safety and Health Administration’s 2015 electronic reporting rule requires certain employers to electronically submit injury and illness data that they are mandated to keep under existing recordkeeping regulations. 
• The rule also contains anti-discrimination prohibitions to protect workers who notify an employer of a workrelated injury or illness. 
• NAHB has concerns about several elements of the rule, including the requirements for employers to submit records electronically to OSHA that would become publicly available.  In January, NAHB and other stakeholders filed a legal challenge. 
• On May 5, NAHB and other organizations submitted a petition to the Department of Labor (DOL) seeking a stay of implementation and enforcement of the rule, and requested OSHA re-open the rulemaking. 
• In June, OSHA announced it was extending the filing deadline for employers to submit electronic records to December, which would give OSHA more time to review the rule. 

4. Federal Flood Risk Management Standard

• In response to the charge led by NAHB and as part of President Trump’s Executive Order to expedite federal approval for infrastructure projects, the Administration revoked Executive Order 13690 and the Federal Flood Risk Management Standard (FFRMS). 
• Our advocacy efforts included participating in federal listening sessions and meetings; submitting comment letters to federal agencies; and requesting that President Trump revoke it. 
• This standard would have dramatically expanded regulated floodplain areas. 
• However, in response to the hurricanes, the Trump Administration may establish its own flood standard. 
• If the Administration chooses to do so, NAHB will work with the White House to develop an effective standard that does not place undue regulatory burdens on residential construction projects. 

5. Immigration

• The H-2B Temporary Non-Agricultural Worker program allows employers who cannot find local labor for short-term or seasonal jobs to fill those positions with temporary foreign workers. 
• There is an annual cap of 66,000 on H-2B visas issued in a fiscal year, but that cap excluded workers who had participated in the program within three years. 
• That “returning worker exemption” expired in September 2016 and has not been renewed by Congress. 
• In May, Congress approved a spending package for the remainder of FY 2017 that included language allowing the Department of Homeland Security (DHS) to raise the statutory cap for 2017 to allow additional visas. 
• In July, DHS announced it would make 15,000 more visas available, but only to employers who could demonstrate that their business would suffer “irreparable harm” without H-2B workers. 
• The next round of H-2B visas will become available on Oct. 1. NAHB hosted a free webinar to help employers learn if they qualify to apply for H-2B workers and how they can become certified employers under the program. 
• With Congress and the Administration focused on immigration enforcement, the prospect of creating a new guest worker program to benefit builders and specialty trades is highly unlikely. 
• NAHB continues to advocate for restoration of the returning worker exemption while looking for opportunities to expand and reform the H-2B program.

6. Low-Income Housing Tax Credit (LIHTC)

• On Aug. 1, NAHB Chairman Granger MacDonald testified before the Senate Finance Committee on “America’s Affordable Housing Crisis.” The hearing focused on the LIHTC. 
• Chairman MacDonald also discussed how lots and labor shortages, building material price increases and regulations affect housing affordability.

7. National Flood Insurance Program (NFIP)

• The NFIP was extended until Dec. 8 as part of a broader legislative package. 
• During NAHB’s Leg Con in June, builders spoke to their congressional delegations about provisions in the House Financial Services Committee’s flood insurance bill that negatively targeted new construction and grandfathered properties. 
• NAHB was able to convince the committee’s leadership to remove those provisions. 
• After Hurricanes Harvey and Irma, discussions about changing the program were put on hold as policymakers ensured home owners and communities had short-term certainty and financial aid. 
• NAHB will work with Congress on long-term legislation that ensures an affordable, available, predictable and financially stable NFIP.

8. Regulatory Reform

• President Trump has made regulatory reform one of his top priorities, and has asked each agency to evaluate existing regulations and identify ones that should be repealed, replaced or modified. 
• We have submitted recommendations to the Environmental Protection Agency (EPA), Department of Housing and Urban Development (HUD), Federal Emergency Management Agency (FEMA), National Marine Fisheries Service (NMFS), Fish and Wildlife Services (FWS), Department of Justice (DOJ) and Department of Energy (DOE), and will soon submit feedback to the Army Corps of Engineers. 
• NAHB will provide suggestions to DOL, OSHA and others once their notices are published. 
• We will review the 2017 Fall Regulatory Plan and Agenda upon its release and determine if our suggestions were incorporated. 
• The Small Business Administration (SBA) Office of Advocacy is also collecting input on regulatory reform through a series of nationwide Regulatory Roundtables; NAHB has had good representation at all roundtables to date. 
• As part of the Cleveland roundtable, NAHB member George Davis met with SBA officials at one of his construction developments. 
• NAHB will continue its outreach to HBAs and members as additional roundtables are announced. 
• On August 28, NAHB testified before the SBA’s Regulatory Fairness Board about the enforcement activities of federal agencies, particularly EPA and OSHA.

9. Overtime Rule

• Under a new rule that was set to go into effect Dec. 1, 2016, the Obama Administration doubled the annual salary level used to determine whether an employee qualifies for the professional, administrative and executive exemption to overtime eligibility from $23,660 to $47,476. 
• Under the new rule, the salary threshold would also be automatically adjusted every three years. 
• NAHB and many other industry groups challenged the rule in federal court. 
• We contended that DOL went beyond its authority under the Fair Labor Standards Act to allow the salary limit to automatically be re-set every year. The Administrative Procedures Act requires these updates be made through regular notice and comment periods. 
• In a victory for NAHB, a federal judge in Texas issued a preliminary injunction that temporarily barred the implementation of the rule. 
• On Aug. 31, the Texas federal court held the rule was invalid and the three-year automatic increase DOL included was similarly unlawful. 
• DOL’s appeal of the preliminary injunction is now moot and likely to be dismissed.

10. Smart Market Report

• Preliminary findings from them Green Residential Smart Market Report show that green building activity should increase over the next few years. Approximately 60 percent of surveyed builders expect it to be a significant share of their overall activity by 2022. This is nearly double from 2014, when only 32 percent of firms reported that level of green building. 
• Single- and multifamily home builders agree that energy efficiency and healthier indoor environments are key factors in building a green home, and have prioritized these elements in the construction process. 
• The Smart Market report found that ENERGY STAR is more popular in the single-family market while LEED and the National Green Building Standard (NGBS) are more popular with multifamily builders. 
• The Green Residential Smart Market Report is a biannual report released by NAHB and Dodge Data and Analytics (formerly McGraw Hill). The report reviews the history and future of green home construction in the single-family, multifamily and remodeling sectors.

11. Stormwater

• NAHB launched an online toolkit in August to help HBAs advocate for programs that provide a clear path to compliance, reduce redundancy and meet water quality goals. 
• The toolkit provides simple checklists that compare pros and cons of different regulatory approaches based on climate, geography, and local land use patterns. This data will help our members in conversations with state regulators. 
• As part of the toolkit launch, NAHB released A Developer’s Guide to Post-Construction Stormwater Regulation. This report provides a state-by-state breakdown on the top permitting issues affecting builders.

12. Tax Reform

• A team of congressional leaders and Administration officials known as the “Gang of Six” is developing a structure for tax reform, while President Trump is trying to garner nationwide support on the issue. 
• House Speaker Paul Ryan intends to move tax reform this fall. 
• Before Congress can address tax reform, it must pass a budget resolution to set up the procedural process known as reconciliation. This will allow tax reform to pass the Senate with only 50 votes. 
• However, there is growing resistance in the House to passing a budget resolution before members see the Gang of 6’s tax framework. To use the reconciliation process, the House and Senate must pass identical budget resolutions, which will be challenging.

13. Waters of the U.S. (WOTUS)

• On Oct. 11, the U.S. Supreme Court will hear oral arguments on whether the 2015 WOTUS rule should be litigated in federal trial court or the appellate court. 
• NAHB has argued that challenges to the WOTUS rule must be first heard at the trial court. 
• We need this clarity so we do not have to file two lawsuits when we challenge an EPA Clean Water Act regulation. 
• Meanwhile, the EPA plans to use a two-step process to develop a new WOTUS definition. 
• In the first step, the EPA has proposed to withdraw the 2015 WOTUS Rule and revert to the status quo. We expect the agency to finalize the withdrawal by early 2018. 
• The EPA also plans to develop a new WOTUS rule, and will soon take comments on the proposal. 
• NAHB is taking advantage of its unprecedented access to EPA Administrator Scott Pruitt, and is working with the agency on a new rule that is clear and limits jurisdiction of the Clean Water Act consistent with congressional intent. 
• In August, NAHB and the Dallas Builders Association hosted a meeting with Administrator Pruitt in Dallas to voice concerns and offer insight about the new rule. 
• NAHB and the Colorado Association of Home Builders are planning a similar meeting with Administrator Pruitt in Colorado Springs in October. 
• In late October, NAHB will provide recommendations on a revised WOTUS definition at a business-focused in-person listening session at EPA headquarters. 

For more information about these or other Federal government affairs issues, contact Michael Dey (mdey@hbaofgreenville.com).

Congress extends flood insurance program for three months

With a September 30 deadline looming, Congress has approved a broad package that will keep the government funded until December 8, provide roughly $15 billion in disaster relief from Hurricane Harvey, and raise the debt ceiling, which sets a limit on the amount of money the federal government can borrow.

The government funding package also means that the National Flood Insurance Program (NFIP), which was set to expire on September 30, will be extended until December 8.

The National Association of Home Builders continues to work with Congress to achieve a long-term reauthorization of the NFIP that will keep the program fiscally sound and let builders provide safe and affordable housing.

Changes to Flood Insurance Rates Effective April 1

Several changes to the National Flood Insurance Program take effect on April 1, impacting a wide range of builders, developers, businesses, home owners and insurance agents operating in areas covered by the National Flood Insurance Program.

Federal Emergency Management Agency has indicated that the maximum individual rate increase for any individual policy is 18%, with a few exceptions. The guidance also states that average premiums – once certain fees are accounted for – will increase 9% for policies written or renewed on or after April 1. For most risk classes, the average annual premium rate increases are limited to 15%.

Many of the changes are a result of continued implementation of the Homeowner Flood Insurance Affordability Act of 2014 and the Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12). Congress passed BW-12 and subsequently Homeowner Flood Insurance Affordability Act to reauthorize and reform the program.

In its summary, Federal Emergency Management Agency notes that changes will also affect mapping, mitigation efforts and program outreach. Each property will see distinct impacts because characteristics such as flood zone, year built (which affects whether it is depicted on the Flood Insurance Rate Map) and property type still play a role in individual premiums.

Other changes include new rating methodology for properties newly mapped into a Special Flood Hazard Area and the elimination of subsidies for certain pre-FIRM policies that lapse and are reinstated past 90 days. In instances where a policyholder wants to return to the National Flood Insurance Program program after the lapse, he or she must obtain an elevation certificate and use the full-risk rate.

Furthermore, Homeowner Flood Insurance Affordability Act Section 28 requires Federal Emergency Management Agency to clearly communicate full flood risk determinations to individual property owners, regardless of whether their premium rates are full-risk rates. To achieve this, Federal Emergency Management Agency will require National Flood Insurance Program insurers to report current flood zone and rate map information for all new business polices effective on or after April 1 and for all renewals effective on or after Oct. 1.

The $25 surcharge for single-family primary residences and the $250 surcharge for all other policies, which went into effect April 1, 2015, remains unchanged.

This round of implementation activity occurs at the same time as regulators look ahead to the next round of program reauthorizations. Congress must pass National Flood Insurance Program reauthorization by Sept. 30, 2017.

In January, the National Association of Home Builders took part in an introductory roundtable and a hearing to discuss National Flood Insurance Program re-authorization. Congress plans to release draft legislation by the end of 2016.

Flood Map Information Available from the City of Greenville

The City of Greenville participates in the National Flood Insurance Program (NFIP), which makes federally-backed flood insurance available for all eligible buildings whether they are in the floodplain or not.  Flood insurance covers direct losses caused by surface flooding, including a river flowing over its banks and local drainage problems.

The NFIP insures buildings, including mobile homes, with two types of coverage:

1. building coverage is for the walls, floor, insulation, furnace, and other items permanently attached to the structure.
2. Contents coverage can be purchased separately if the contents are in an insurable building.

The Flood Insurance Protection Act of 1973 and the National Flood Insurance Reform Act of 1994 made the purchase of flood insurance mandatory for federally-backed mortgages on buildings located in Special Flood Hazard Areas (SFHA).  The SFHA is the base (100-year) floodplain mapped on the Flood Insurance Rate Map (FIRM).

The City of Greenville's Environmental Engineering Bureau provides assistance concerning floodplain locations, elevations, site-specific flood and flood-related data, and historical flooding of neighborhoods.

You can view the City of Greenville's Special Flood Hazard Areas in your neighborhood online by clicking here.  This is an interactive website that shows parcels within the city with respect to the floodplain.  If you are looking for more site-specific information, you can complete a floodplain verification request by clicking here.

The Environmental Protection Bureau maintains copies of FEMA elevation certificates on all buildings constructed in the floodplain since 1991.  The elevation certificates are available in the Engineering Division, on the 8th floor of City Hall at 206 South Main Street.  For more information, call the Environmental Engineering Bureau at 864-467-4400.

Flood Insurance Legislation Will Produce More Than $1 Billion in Housing Activity

We told you previously about the Homeowner Flood Insurance Affordability Act of 2014, recently enacted legislation championed by your Home Builders Association that will provide a significant boost to home building and remodeling as well as certainty and financial stability to the National Flood Insurance Program.

The numbers are in on the legislation, and NAHB's experts estimate that in 2014, the new law will result in a total of more than $1 billion of housing market activity, including:

• $755 million in new home construction because the new law makes it easier for prospective new home buyers to sell their existing home and trade up.
• $361 million in additional remodeling activity because the legislation eliminates insurance costs that some home owners would have been required to pay on certain remodeling jobs.

The recently enacted legislation provides a more affordable rate structure for policyholders and repeals the requirement that flood insurance premiums increase immediately to full actuarial rates when homes are sold. It also restores "grandfathering" for properties that were paying premiums applicable to their initial flood risk rating, allowing owners to pay premiums based on the original risk zone rather than updated flood risk zones.

In addition, the legislation requires the Federal Emergency Management Agency to take local flood control structures into account during the remapping process and provides reimbursement for successful consumer map appeals. It also restores the "substantial improvement threshold" that triggers a higher flood insurance rate to the historic 50 percent of a structure's fair market value, which is important for many remodelers.

NAHB: Urge your Representatives to Vote for the Homeowner Flood Insurance Affordability Act

Call your Representative at
(866) 924-NAHB (6242)

The House of Representatives will soon be considering the NAHB-supported H.R. 3370, the Homeowner Flood Insurance Affordability Act. This bill addresses serious affordability concerns due to dramatic flood insurance premium increases, and if not corrected, will continue to severely impact the construction, remodeling, and sale of homes in many communities across the nation. This bill will provide certainty and financial stability to the National Flood Insurance Program.

H.R. 3370 provides a more affordable rate structure for policyholders, repeals the rate increases from the sale or transfer of homes, restores the substantial improvement threshold to the historic 50%, requires FEMA to create more accurate flood maps, and ensures that consumers can be reimbursed for successful map appeals.

Call to action:

• Call your Representative at (866) 924-NAHB (6242)

Your ask:

• Urge your Representative to vote YES on H.R. 3370, the Homeowner Flood Insurance Affordability Act.

If you have any questions or feedback, please emailbuilderlink@nahb.org.

Flood Insurance Seminar is January 13

Your Home Builders Association has partnered with the Greater Greenville Association of Realtors to offer a seminar on the recent changes to the National Flood Insurance Program.  

• When: Monday, January 13, 2 p.m. until 4 p.m.
• Where: GGAR Conference Center, 50 Airpark Court, Greenville
• Cost: No charge to HBA of Greenville members

The purpose of the seminar is to update HBA and GGAR members on the changes resulting from the legislation that renewed the National Flood Insurance Program for another five years.  Those changes have resulted in dramatic increases in flood insurance premiums for some homeowners and in some cases have threatened potential real estate transactions.  It is important for Home Builders to understand how the new rules will impact owners of homes built in flood-prone areas.  In addition, Remodelers who are familiar with the new rules may be able to leverage that knowledge to secure new business.

This is not just a Coastal Issue. Property owners and transactions are being impacted all over the Upstate.

Speakers include:

• Lisa S. Jones, CFM, ANFI, CPM, Principla, Carolina Flood Solutions
• Robert Hall, PE, CFM, Flood Plain Administrator, Greenville County
• Jacqueline Chelbezan, PE, PH, CFM, Assistant City Engineer-Environmental, City of Greenville

The agenda will include a comprehensive briefing of the changes in the law regarding flood insurance by Lisa Jones, and briefings from Robert Hall and Jacqueline Chelbezan on local flood management ordinances and resources for evaluating the flooding risk of property in the Greenville area.

The seminar is free to HBA of Greenville members. To register at HBAofGreenville.com, click here.

Flood Insurance Legislation Would Provide Premium Relief for Home Owners

At your HBA’s urging, the House and Senate on Oct. 29 introduced identical flood insurance legislation that would provide relief from soaring flood insurance premium rates for countless home owners across the nation, prevent undue hardship on the recovering housing market, stop home values from dropping and make the National Flood Insurance Program stronger and more effective for years to come.

Championed in the Senate by Sens. Robert Menendez (D-N.J.) and Johnny Isakson (R-Ga.) and in the House by Reps. Michael Grimm (R-N.Y.) and Financial Services Committee Ranking Member Maxine Waters (D-Calif.), the Homeowner Flood Insurance Affordability Act offers a common-sense solution to fix some of the costly and unintended consequences resulting from the implementation of the Biggert-Waters Flood Insurance Reform Act.

The legislation would prevent premium rate hikes from taking effect for four years, which will give the Federal Emergency Management Agency (FEMA) time to conduct an affordability study and to reimburse those who can prove that its existing flood plain maps are inaccurate. The measure also requires FEMA to adopt sound engineering practices to accurately determine flood risk.

Though the Homeowner Flood Insurance Affordability Act will address many of the concerns NAHB members had with the Biggert-Waters Flood Insurance Reform Act, NAHB is disappointed that this legislation does not address the treatment of non-primary residences and an issue of importance to remodelers.

The “substantial improvement” threshold – or the value of remodeling and renovation projects that cause the insurance premium rate increases to kick in – was lowered from 50% to 30% in the Biggert Waters Flood Insurance Reform Act. This lower threshold – which was unchanged in the newly unveiled House and Senate legislation -- is a potential disincentive for home owners who are considering hiring a professional remodeler to make improvements to their properties.

In addition to Menendez and Isakson, original cosponsors of the Senate bill include Sens. Thad Cochran (R-Miss.), Heidi Heitkamp (D-N.D.), John Hoeven (R-N.D.), Mary Landrieu (D-La.), Jeff Merkley (D-Ore.), and David Vitter (R-La.).  Other cosponsors of the House bill include Reps. Bill Cassidy (R-La.) and Cedric Richmond (D-La.).

Request for Information on Flood Insurance Rates

We are well aware of the shocking price increases some properties are facing for flood insurance policies in 2014. Your HBA is working to get Congress to mitigate these changes, and we may have some windows of opportunity to raise the profile of this problem with Congress in the coming weeks.

What we need, however, are some specific examples of price increases. We are aware of plenty of anecdotal stories, as is Congress, but we lack pricing information linked to a specific property.

If you are running into problems with flood insurance, you may be able to help.

What we need: is documentation showing the current policy’s rate and the new rate. We don’t need the property owner’s name but must have the address.

Any information shared with us will be shared with congressional committee staff and, very likely, FEMA. We realize this may make some property owners uncomfortable, but there is always the possibility that FEMA will review and adjust it in light of a congressional inquiry!

It would be incredibly helpful to have some documented case examples to highlight the problem.

Rate Increases Ahead for Some National Flood Insurance Program Policyholders

Changes are coming to the critically important National Flood Insurance Program that could impact real estate transactions and property owners across the country. That’s according to experts from the Federal Emergency Management Agency, which manages the government’s flood insurance program, who spoke to the National Association of Realtors at Flood Insurance 101, a forum during the Realtors' recent meetings in Washington, DC.

Kristin Robinson, senior advisor, summarized last year’s Biggert-Waters Flood Insurance Reform Act, which reauthorized the critically important NFIP through 2017 so property owners could affordably access flood insurance.

NAHB joined NAR in strongly supporting the legislation.  Both groups believe the government’s insurance program saves taxpayers property and money because it increases the number of self-insured properties and reduces the cost of post-flood disaster governmental assistance.

The NFIP is responsible for writing and renewing flood insurance policies for more than 5.6 million home and business owners in more than 21,000 communities nationwide where flood insurance is required for a mortgage. Before Congress passed the legislation, the program operated under short-term extensions. In the past five years, there were 18 extensions and several lapses in program coverage, delaying or cancelling thousands of real estate transactions daily according to NAR’s research, wreaking havoc on real estate and home building markets.

Robinson said the NFIP is $24 billion in debt following several disastrous storms in recent years since the costs and consequences of flooding continue to increase. “For decades the program has made flood insurance available at subsidized rates that did not reflect the true risk of flooding; artificially low rates and discounts are no longer sustainable,” she said.

Andy Neal, actuary, addressed the gradual phase-out of subsidized rates, which was included in last year's legislation to preserve the flood insurance program and critically important property insurance coverage for the nation’s homeowners. Neal said rate subsidies are being phased out over the next several years to help increase the NFIP’s soundness and financial stability.

The majority of policyholders, more than 80 percent, are not subsidized and won’t be impacted by subsidized rate changes since they are already paying full actuarial rates, he said. However, these owners could see routine annual rate increases.

“Only about 20 percent of NFIP policies receive subsidies, mostly older structures built before the community’s first flood insurance rate map was issued, which are known as pre-FIRM properties. Some of these policyholders will be impacted by the gradual phase-out of subsidized rates; an even smaller number will see immediate changes to their insurance policy rates,” said Neal.

Rate changes are likely to affect owners of subsidized pre-FIRM non-primary residences, business properties, and properties that have experienced severe repetitive flood losses. Owners of some pre-FIRM condos and multi-family units will also see their rates gradually increase. Owners of pre-FIRM primary residences will retain their subsidies unless the policy lapses; it suffers a severe, repeated flood loss; or it’s sold to a new owner, which is retroactive to July 6, 2012, when the legislation was enacted. Some grandfathered principal residences will also lose their subsidies over a several year period, but not until the communities’ flood map is revised.

Neal recommended that home and property owners talk to their insurance agent to determine if their property is currently being subsidized. He said flood insurance rates vary based on a property’s location, elevation and flood risk and can be as low as a few hundred dollars up to $10,000 or more if the property is well below flood level and had severe repeated flood losses.

While higher rates may place a greater burden on families, there are investments homeowners can make to either reduce or better access their flood risk so they can continue to protect their families and possessions from damaging floods. According to Neal, homeowners can lower their risk by elevating their property and potentially reduce their flood insurance rates by having an elevation certificate completed to determine the property’s elevation relative to the base flood elevation. Elevation certificates can cost several hundred dollars to complete but could potentially lower homeowners’ flood insurance premiums.

Some homeowners with flood insurance policies have already received quotes for higher rates, which may be caused by several other factors such as improvements to mapping. As FEMA improves its mapping technology and draws more accurate flood maps, some homes may now be located in a flood zone, or a higher risk zone, where flood insurance is more expensive. Also, some insurance agents may adjust rates to correct previous mistakes made about the home's features when they are re-evaluating an insurance policy at renewal.

UPDATE:

Representatives Bill Cassidy (R-LA) and Maxine Waters (D-CA) have successfully attached an amendment to the Homeland Security Appropriations Bill to delay removal of “grandfathered” flood insurance rates for one year.  Efforts are underway to include the delay in the Senate version of the Homeland Security bill. 

The grandfathered and other subsidized flood insurance rates are being phased out under the Biggert-Waters Act that extended the National Flood Insurance Program for five years. The House amendment would delay the phase-out for properties “grandfathered” under older rates in areas remapped into a higher-priced flood zone before September 30, 2014.  The law’s other phase-outs — for older second homes and business properties and for homes purchased after July 2012 — will continue to take effect on October 1, 2013.

In the meantime, the Senate Banking Committee has agreed to hold a hearing on the affordability of the Biggert-Waters rate provisions.  The hearing is expected to be conducted in July.   

NAR and SCR will continue to work with Congressional allies on the NFIP issue and will keep you informed on the progress.

Used with permission
Source: National Association of Realtors

Value of Membership: 10,100 new home starts saved in 2013

We continue our series about how your HBA and its affiliate, NAHB, have logged significant victories advocating for members in the legal, legislative and regulatory arenas during 2012. 
Our advocacy efforts have saved the typical home builder about $7,250 per housing start in 2012, including both single-family and multifamily.

Flood insurance win will preserve 10,100 new home sales in 2013. NAHB advocacy averted the loss of approximately 10,100 new home sales that would have been prevented by the expiration of the NFIP. The National Flood Insurance Program has endured many short term lapses in recent years, which caused costly delays for home builders and buyers and even resulted in canceled sales. Reauthorizing the program for five years will prevent such lapses and the resulting delays and sale cancellations.

NAHB also worked with lawmakers to successfully remove unfair requirements that would have caused countless owners of property behind dams or levees to purchase coverage regardless of flood risk.

NAHB’s efforts on the National Flood Insurance Program saved NAHB members $2.42 billion in gross revenue in 2013 by preserving the sales of approximately 10,100 newly constructed home sales that would not have occurred otherwise due to higher costs for home buyers in these areas ($60,000 on average).

Flood Management Program is updated for Greenville County

Greenville County, in cooperation with the S.C. Department of Natural Resources (DNR) and the Federal Emergency Management Agency (FEMA), is updating its flood management program. The updates include:

• Revising the Flood Insurance Rate Maps (FIRM), which include, in some cases, additional limits on construction in certain areas
• Updating public educational programs which include information on building in flood-prone areas
• Creating a resource page where property owners may determine if their property is in a floodplain

Greenville County has created a resource page on its Flood Management Program that includes important information about building in flood-prone areas. Click here to visit the Flood Management Program page at greenvillecounty.org.

For example, did you know that a Special Flood Hazard Area (SFHA), or floodplain, is defined as having a one percent annual chance of flooding. The standard was chosen as a compromise between the need for building restrictions to minimize potential loss of life and property and the economic benefits to be derived from floodplain development. Development may take place within the SFHA, provided that development complies with local floodplain management ordinances, which must meet the minimum Federal requirements. Flood insurance is required for insurable structures within the SFHA to protect federally funded or federally backed investments and assistance used for acquisition and/or construction purposes within communities participating in the National Flood Insurance Program (NFIP).

Rates from the National Flood Insurance Program May Rise

One property in Mississippi, valued at $183,000, was flooded 15 times over a 10 year period and cost the National Flood Insurance Program $1.47 million. Another property in Texas, valued at $116,000, has amassed $2 million in claims, and counting.

These and other examples are why the National Flood Insurance Program is on the verge of insolvency, and why Congress authorized the program to increase premiums by as much at 25 percent a year over the next five years for second homes and homes in flood-prone areas. The objective is to increase premiums so that they reflect actual risk and perhaps discourage building in hazardous areas.

Click here to read about the premium changes in the New York Times.

NAHB: Top 12 Accomplishments Summer 2012, Number 2; Flood Insurance

Builder Review Daily is highlighting the top 12 actions taken on behalf of Home Builders so far this Spring.

Accomplishment number 2: Long-Term Reauthorization of the National Flood Insurance Program

In an important victory for NAHB members who rely on the National Flood Insurance Program, at the end of this June Congress reached an agreement to reauthorize the program through Sept. 30, 2017. This should put to an end the many short-term lapses the program has endured in recent years -- along with the costly delays those lapses have caused home builders and buyers.

Established in 1968, the NFIP offers affordable flood insurance to home owners and businesses in flood plains and other low-lying areas that otherwise might not be able to obtain coverage. More than 20,000 communities nationwide participate in the insurance program, which currently covers about 5.6 million policyholders. The five-year extension of the NFIP ensures that the program will remain available, affordable and financially healthy. In addition to achieving the long-term reauthorization, NAHB worked with a bipartisan group of senators to remove “residual risk” language from the bill, which would have required the mandatory purchase of flood insurance for areas located behind dams or levees. 

Congress votes to extend for five years the National Flood Insurance Program

On June 29, 2012, both the U.S. Senate and House gave approval to extending authority for the National Flood Insurance Program  through 2017.  The authorization was part of the larger Federal transportation bill that was approved shortly before Congress recessed for Independence Day week.  The bill now awaits President Obama's signature.

NAHB, along with the National Association of Realtors and other groups worked hard for a long-term extension of the flood insurance program.  Since 2008 Congress has been extending the National Flood Insurance Program a few months at a time and twice let the program's authority lapse, stalling thousands of real estate transactions in the process and potentially interrupting to the most vital part of our nation's economy: real estate.

Passage of the 5-year reauthorization will bring certainty to real estate transactions in more than 21,000 communities nationwide where flood insurance is required for a mortgage. The bill ensures the program will continue long-term for more than 5.6 million business, and homeowners, who rely on it.  Extension of the program also insures that taxpayers will spend less on federal assistance for flood disasters over the long run.

National Flood Insurance Program Could Expire (Again)

With the National Flood Insurance Program (NFIP) set to expire May 31, NAHB continues to work doggedly to seek a five-year reauthorization of the federally-backed flood insurance program to ensure it remains efficient and effective in protecting flood-prone properties and creates more stability in the housing market.

The House on May 16 approved a one-month extension of the program in order to buy time to negotiate a longer-term reauthorization with the Senate. At this time, it is unclear whether the Senate will agree to the 30-day extension.

Call to Action:

• Call your Senators at (866) 924-NAHB (6242); 
• Write your Senators at www.capitolconnect.com/builderlink. 

Urge Your Senators to:

• Support S. 1940, the reauthorization of the National Flood Insurance Program;
• Support any amendments that removes Section 107 or any “residual risk” language;

If you have any questions or feedback, please email builderlink@nahb.org.

About NFIP Legislation:

The National Flood Insurance Program is extremely important to home builders and homeowners across the country. Over the past few years this program has had a series of extensions and four lapses that have caused construction delays, cancelled closings and in several cases, job losses; which is why a long term reform bill needs to be signed into law. S. 1940, reauthorizes the NFIP for five years which will give this issue a longer term solution.

The passage of S. 1940 is imperative for the home building industry, however it is not perfect. Section 107 of the bill would require any properties in areas behind dams or levees (known as “residual risk” areas) to purchase flood insurance. For many communities, a great deal of time and taxpayer money was spent to provide additional flood protection for these areas, and in many cases a levee fee is also included in the property tax assessment. To now mandate the purchase of additional flood insurance policies at a cost to the homeowner is simply unfair.

In the past few years, the NFIP has experienced several short-term lapses in authorization, forcing many home buyers to delay or cancel closings due to the inability to obtain NFIP insurance for a mortgage. In other instances, builders were forced to stop or delay construction on a new home due to the lack of flood insurance approval, resulting in unnecessary delays and job losses.

NAHB supports a long-term extension of the NFIP.

The House has already passed a bipartisan five-year flood insurance reauthorization bill. A Senate version to extend the program for five years has not yet come to the Senate floor for a vote.

While both the House and Senate measures would keep the program running through 2016, significant differences remain between the two bills. Though NAHB strongly supports the House bill, the association has significant concerns with the Senate legislation and continues to work with senators to address these issues.

Established in 1968, the NFIP offers affordable flood insurance to more than 20,000 communities nationwide, and currently covers about 5.6 million policyholders.

National Flood Insurance Program extended until Dec. 16

Congress reauthorized the National Flood Insurance Program until December 16.  The extension was part of the same legislation that reauthorized the higher loan limits for FHA-backed mortgages.

NAHB is currently working with the National Association of Realtors and others to lobby Congress to reauthorize the flood insurance program for five years.

Greenville County to host public meeting on new Flood Insurance Rate Maps

Greenville County announced a public meeting on the new Flood Insurance Rate Maps.  Representatives from Greenville County, S.C. Department of Natural Resources, and the Federal Emergency Management Agency will be on hand to answer questions.

• December 14, 2011
• 4 p.m. until 8 p.m.
• Greenville County Square, Conference Room A, 301 University Ridge, Greenville SC

U.S. House votes to reauthorize flood insurance program for five years

By an overwhelming margin the U.S. House of Representatives voted last week to approved legislation that will reauthorize the National Flood Insurance Program for five years.

The flood insurance program has suffered through several short-term renewals in recent years and on at least two occasions the program has been suspended because its authorization from Congress to back flood insurance polices had expired.

Read more in NAHB's Washington Update by clicking here.

Builders Support Five-Year Extension of National Flood Insurance Program

The National Association of Home Builders (NAHB) today voiced strong support for congressional efforts to extend the National Flood Insurance Program (NFIP) for an additional five years to provide ongoing flood insurance protection for property owners and ensure the nation's real estate markets operate smoothly and without delay.

Testifying before the House Financial Services Subcommittee on Housing and Community Opportunity, NAHB First Vice Chairman Barry Rutenberg, a home builder from Gainesville, Fla., said that the home building industry depends upon the NFIP to remain available, affordable and financially sound.

"A strong, viable national flood insurance program helps ensure the members of the housing industry can continue to provide safe, decent and affordable housing to consumers," said Rutenberg. "We are pleased to see the subcommittee propose a five-year extension of this important program."

The federally-backed flood insurance program suffered unprecedented losses stemming from the devastating 2004 and 2005 hurricane seasons, with combined claims from these two years exceeding the total amount paid during the previous 37-year existence of the NFIP program.

As Congress moves to reform the NFIP to ensure its financial stability, Rutenberg urged lawmakers to proceed with care, noting that it is not simply about flood insurance premiums and payouts, but also a comprehensive program that guides future development and mitigates against future loss.

"While a financially-stable NFIP is in all of our interests, the steps that Congress takes to ensure financial stability have the potential to greatly impact housing affordability and the ability of local communities to exercise control over their growth and development options," he said.

During the past several years, the NFIP experienced several short-term lapses in authorization, forcing many home buyers to delay or cancel closings due to the inability to obtain flood insurance for a mortgage. In other instances, builders were forced to stop or delay construction on new homes due to the lack of flood insurance approval, adding unneeded delays and job losses.

To improve the solvency of the program and its attractiveness to potential policyholders, NAHB supports a number of reforms designed to allow the Federal Emergency Management Agency (FEMA) and the NFIP to better adapt to changes in risk, inflation and the marketplace:

• Increasing coverage limits to better reflect replacement costs would provide more assurances that the legitimate losses will be covered and benefit program solvency by generating increased premiums.
• Creating a more expansive "deluxe" flood insurance option, or a menu of insurance options from which policyholders could pick and choose, could provide additional home owner benefits while aiding program solvency.
• Raising the minimum deductible for paid claims would provide a strong incentive for home owners to mitigate and protect their homes, thereby reducing potential future losses to the NFIP.
  

Established in 1968, the NFIP offers affordable flood insurance to home owners and businesses in flood plains and other low-lying areas that otherwise might not be able to obtain coverage.

More than 20,000 communities nationwide participate in the insurance program, which currently covers about 5.5 million policyholders.