If a home floods once, it could be a chance event. If it floods more than once, odds are there's a reason. That's the reasoning behind a FEMA program to elevate, or even relocate, houses that have flooded over and over, and received multiple claim payouts from federally-backed flood insurance. But the FEMA program itself is now drawing criticism in New Orleans, where FEMA grants for elevating homes have been found to exceed the assessed value of the houses, according to a New Orleans Times-Picayune report (“ Federal elevation grants can be worth far more than house itself,” by John Pope). One house, writes the paper, has gotten a grant worth more than $600,000 for flood mitigation work — even though tax assessors value the house at only $245,000. The Federal flood program, however, is stuck between a rock and a hard place: when the law authorizing the National Flood Insurance Program (NFIP) was adopted back in 1968, existing homes within flood plains were grandfathered in. Most of the houses that FEMA lists as “Repetitive Loss” or “Severe Repetitive Loss” properties come from that population of decades-old houses, built before towns that joined the federal program began to apply stricter zoning rules and require flood-tolerant methods of construction for homes in risky locations. According to FEMA’s numbers, only about one percent of the homes covered by federally-backed insurance under the National Flood Insurance Program (NFIP) are classed as Repetitive Loss Properties — but those houses account for a whopping 30% of the agency’s insurance payouts, year after year. Under the law, the agency has to insure those properties; however, a 2004 revision of the legislation set up a program, funded at about $70 million a year, to “mitigate” — by elevating, floodproofing, or relocating — some of the Severe Repetitive Loss (SRL) buildings. Explains an agency guidance sheet, “The SRL group consists of any NFIP insured property that has met at least one of the following paid flood loss criteria since 1978, regardless of ownership:
1. Four or more separate claim payments of more than $5,000 each (including building and contents payments); or
2. Two or more separate claim payments (building payments only) where the total of the payments exceeds the current market value of the property.” FEMA has a formal process for working with states and towns to identify these highl-risk properties, using a computerized “National Tool” to standardize the evaluation process. And for properties identified as bad risks, FEMA has a guidance document for deciding on appropriate measures: FEMA 551 (“ Selecting Appropriate Mitigation Measures for Floodprone Structures”). According to FEMA 551, the ballpark cost for elevating a house in a floodprone area ranges from $36/square foot (for a wood frame house on concrete or block foundation walls) to $45/square foot (for a house on a slab-on-grade foundation). That’s a far cry from the estimates for the New Orleans house described in the Times-Picayune’s story, a 3,300-sqft dwelling. According to the story, elevating the house is pegged at about $300,000 — close to $100/square foot — with an additional $192,000 earmarked for wind-resistance retrofits. New Orleans officials argue that cost figures drawn from generic houses in other locations shouldn’t be applied to historic New Orleans, where homes are likely to have unique architectural features and non-standard structural characteristics. According to the story, the home has flooded six times. So compared to repairing future flooding over and over again, the retrofit may be a long-term money-saver. But whether Federal funds should be devoted to that purpose remains a matter for debate — as does the entire Federally-backed insurance program.