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Monday, Jun 18, 2018
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A partial fix for flood insurance mess

Temporary relief appears to be on the horizon for some Tampa Bay area homeowners beset by steep hikes in flood insurance premiums.

A reasonable measure that would bar the federal government from spending money to enforce the higher premiums has been included in a $1.1 trillion spending plan Congress is expected to approve this week and send to President Barack Obama for his signature.

“The act would immediately halt increases for existing homeowners,” said Rep. Kathy Castor, a Democrat from Tampa who has worked with other Florida lawmakers — Democrat and Republican — to find a solution to the rate hikes.

It’s far from perfect. If passed, the ban would last only until Oct. 1. And it does not provide relief to anyone already hit by the increases, nor does it prevent the new rates from kicking in on the sale of a home. By one estimate, less than a quarter of the policies would be affected.

Still, every congressional member from Florida should make sure the spending plan is passed with the temporary fix intact.

It’s particularly important to Florida, where 37 percent of the nation’s 5.6 million federal flood insurance policies are held. In the Tampa Bay area, more than 70,000 homeowners are now facing rate hikes. In some cases, premiums are jumping from a few thousand dollars a year to $10,000 a year or more. Many of the homes are miles from the water and valued at under $130,000. Some homeowners are unable to pay the higher rate and unable to sell because of the higher rates.

Critics who complain the delay benefits millionaires with waterfront homes fail to recognize the threat these increases are having on middle-class homeowners and on the housing market’s fragile recovery in Florida and in other coastal states.

The chaos is a result of the Biggert-Waters Act of 2012. It was passed to end the unsustainable and destructive federal practice of subsidizing insurance rates for flood-prone properties. But its passage occurred without the benefit of a realistic assessment of the flood risks to many of the homes now being hit with increases.

This temporary delay “will provide immediate relief ... while providing time for Congress to work out a permanent solution that reforms the nation’s flood insurance program,” said U.S. Rep. Vern Buchanan, a Republican from Sarasota.

One of those permanent solutions is expected to be considered soon by the Senate. The Homeowner Flood Insurance Affordability Act would delay the increases on most residences until after the Federal Emergency Management Agency re-evaluates the new flood maps and considers ways to keep the rates affordable. Similar bills are being proposed in the House, where opposition is expected from lawmakers concerned the delay will add to the program’s debt.

The Congressional Budget Office estimates a delay of four years would force the program to borrow and spend an additional $900 million. But that cost would be offset in later years by the law’s restrictions, the CBO said.

That’s a tradeoff that should be made.

The success or failure of the federal legislation should not deter state lawmakers from passing their own remedies during the coming legislative session. A plan by state Sen. Jeff Brandes, a Republican from St. Petersburg, would make it easier for private insurers to offer affordable alternatives to the national program. It deserves support.

With few exceptions, Florida’s lawmakers in Washington have responded with the appropriate sense of urgency and it appears they have persuaded their colleagues to revisit the well-intended but flawed legislation.

As U.S. Sen. Bill Nelson, a Democrat who has been on the front lines of the relief effort, said, “Congress, it seems, is finally hearing the pleas of some of the homeowners.”

Now it’s a matter of closing the deal for the temporary relief, and then finding a permanent fix.

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