WASHINGTON — A bipartisan group of lawmakers Tuesday unveiled legislation that would delay for about four years several changes to the federal government’s flood insurance program that are threatening to sock thousands of people with unaffordable premium hikes.
The move comes as the government is beginning to implement a significant overhaul of the much-criticized program. That overhaul passed last year with sweeping support. The revamped program was backed by both liberals and tea party conservatives but has caused a panic in places like Staten Island, N.Y., and the New Jersey coast and in flood-prone areas of Louisiana, Mississippi and Florida, where higher rates threaten to push some people out of their homes.
Some of the most ardent supporters of delaying the premium increases are conservative Republicans from Southern states, where the new rules have sent some home values plummeting because of uncertainty over insurance rates and because subsidized rates can’t be passed along to buyers. New flood maps threaten to saddle some homeowners who are paying a few hundred dollars a year now with annual premiums of more than $20,000.
South Carolina, with more than 200,000 policy holders in the program, has the fifth-highest participation in the country, said Nick Kremydas, chief executive officer of the S.C. Realtors trade group. And the premium hikes already have been killing housing deals throughout the state, he said.
“There are policy holders in every single county in South Carolina,” he said, from the coast to low-lying areas and property around lakes, rivers and marshes.
“All were targets for potential increased premiums,” Kremydas said. Adding to the misery, Federal Emergency Management Agency is updating its flood maps, which is increasing the number of properties affected, he said.
Kremydas called the bill a “crucial first step in delaying the implementation of the rate increases.”
“As the bill goes through the legislative process, we’ll have an opportunity for input and hopefully make it even better and avoid just kicking the can down the road like Congress tends to do on some other big-ticket items,” Kremydas said.
Last year’s legislation promises premium increases to 1.1 million homeowners who’ve received subsidized, below-risk coverage and could sock even more homeowners whose homes met older building standards or were deemed at lower risk under previous flood maps. Under the old rules, they could retain their old rates since they followed the rules when they bought or built their home, but they will lose those “grandfathered” rates.
The new legislation, unveiled Tuesday at a Capitol Hill news conference, would delay the new rates for people purchasing homes from someone who currently has a subsidized policy or people who face higher rates when flood maps are updated. People with second homes or whose property has repeatedly been flooded would still have to pay the higher rates, which are scheduled to rise by 25 percent a year until their premiums reflect the true risk of flooding.