A bill to delay many of the rate increases in the federal flood insurance program for four years is poised to pass the U.S. Senate with bipartisan support today after a day of debate in Washington.
It’s probably premature for Tampa Bay area homeowners to celebrate, though.
The measure, which would primarily keep down premiums on first homes, has been criticized by the Obama administration for compromising the heavily indebted National Flood Insurance Program’s ability to pay claims.
While it also has strong support from both parties in the House of Representatives, Speaker John Boehner, R-Ohio, has said he opposes the Senate bill and favors a scaled-down version.
A letter signed Wednesday by 10 Democratic members of the Florida delegation, including Tampa Rep. Kathy Castor, urged the speaker to reconsider the Homeowner Flood Insurance Affordability Act, which they said is supported by 180 representatives from both political parties.
A final vote on the Senate bill is expected this afternoon.
Florida Sen. Bill Nelson said big support in the Senate should move the House to action.
“Let’s just get a real big vote here and that will send a message to our colleagues in the House of Representatives that this is no fooling time, that these rate increases are already in effect,” the Orlando senator said in remarks on the Senate floor Wednesday.
The Senate bill is no panacea for the troubles facing Florida’s housing and tourism markets.
While it puts off hikes on primary residences, second homes and commercial properties will be subject to rate increases.
So far, Congress hasn’t responded to efforts by groups such as the Tampa Bay Beaches Chamber of Commerce to include hotels and other businesses that could go bust if insurance costs continue to climb.
Much of the momentum behind the bill is fueled by horror stories constituents across the country have told about annual premiums doubling, tripling or even jumping tenfold upon the sale of a home.
On Wednesday, several Republican senators, led by Pennsylvania Sen. Pat Toomey, acknowledged the need to help those homeowners, but they emphasized the original goal of the 2012 Biggert-Waters Act — getting the national flood program out of $24 billion in debt.
The bill removes so-called subsidies that had kept rates far below their true risk on older homes built before most communities joined the flood program in the late 1970s.
While the law only targets 20 percent of all flood policies, the Tampa Bay area has a high concentration of single-family homes that could be affected, with about 50,000 in Hillsborough and Pinellas counties.
The Obama Administration’s Office of Management and Budget released a statement earlier this week criticizing the current Senate bill, warning that a delay in premium increases would “further erode the financial position of the NFIP” and reduce the program’s ability to pay future claims.
The president has not threatened a veto.
Republicans who oppose the bill highlighted the administration’s critique while pushing for amendments that would make more modest changes to premiums, such as a 25 percent annual increase after a home is sold rather than rates immediately skyrocketing to their full risk level.
While a delay might offer some relief to area homeowners, St. Petersburg insurance agent Jake Holehouse says most homebuyers likely will continue opting for emerging private policies since the government’s system for setting rates still won’t be fixed.
“The challenge of this bill is that it is a delay, not a solution,” he said.
For a local economy that relies heavily on beach tourism, the bill also won’t help many businesses along the coast or older hotels, said Doug Izzo, who manages government affairs for the Tampa Bay Beaches Chamber.
“You have to look at the businesses that are either going to have to go out of business or raise their rates,” Izzo said. A more immediate concern will be getting the current bill onto the House floor, which is a priority for both Republicans and Democrats who represent the Tampa Bay area.
“I remain hopeful and confident that we will be able to reach an agreement to address the flood insurance system’s solvency and affordability,” said Rep. Gus Bilirakis, R-Palm Harbor, who is a co-sponsor of the House version of the bill.