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Elevating Homes After Sandy: 'Wait-and-See Approach Is Prudent'

For owners of homes not substantially damaged by the storm, waiting for final flood maps and flood insurance rates could help in making decision

With a flood map still in flux and flood insurance premium increases still not set, property owners may have too little information to make an informed decision on whether to rebuild their homes at a higher elevation, according to state officials and local insurance agents.

Record flooding from Superstorm Sandy on Oct. 29 caused billions of dollars worth of damage to the coastlines of New Jersey and New York, and in the aftermath of the storm, many owners are wondering if they will be required to elevate their homes.

This much is known: Emergency rules adopted by New Jersey on Jan. 24 require new and substantially reconstructed (where the cost of restoration equals or exceeds 50 percent of the market value of the structure before the damage occurred) buildings to be elevated in accordance with the temporary Advisory Base Flood Elevation (ABFE) map.  

The rest of Toms River's homeowners face a decision based on:

  • Where their property falls on the new map: The Federal Emergency Management Agency (FEMA) released the advisory map last month. It recommends elevations at which a property can survive a 100-year storm with relatively minor damage. It also maps Velocity Zones (V Zones), where properties could sustain damage from storm waves of at least three feet on top of flood waters. Recommended elevations in V Zones are higher. 
  • Whether their flood-insurance premiums will increase dramatically: Shore property owners rely on the government's National Flood Insurance Program (NFIP), which has been billions of dollars in debt since Hurricane Katrina in 2005 and is subsidized by U.S. taxpayers. Legislation approved last year would eliminate taxpayer subsidies and make the program self-sustaining. That means potentially dramatic premium increases for the riskiest policy holders — owners whose properties fall below the base flood elevation on the new FEMA maps.
  • How much it will cost to elevate a home: Estimates have varied wildly in the aftermath of the storm.

The problem for homeowners is that all the factors are still variable.

The "advisory" ABFE maps do not yet take into consideration mitigating factors such as dunes, bulkheads and buildings. Some properties could be moved out of V Zones when new versions of the advisory maps are released in late summer and early fall. At that point, property owners will have the option to appeal before a final version of the maps is approved. 

Flood-insurance premium increases for most property owners have not yet taken effect either. FEMA has warned that the potential increases could be significant as the program moves toward a full actuarial basis, particularly for homes below base flood elevation.

But the only rate increases effective as of January 1, 2013, are for "pre-FIRM" construction (built before Dec. 31, 1974) for nonresident property owners (these increases are 25 percent).

More rate increases won't be effective until Aug. 1, when insurance premiums are likely to go up 25 percent annually for property owners until the flood-insurance program is self-sustaining. Properties far below base flood elevation could pay more than $30,000 annually, while properties that exceed the recommendations could pay less than $3,000.

"People are getting very upset over a lot of possibilities and a lot of unknown," said Michael McMahon of Ocean City's McMahon Agency. "We believe a wait-and-see approach is prudent. Unless you are in the design process of a new home or are required to elevate your home due to substantial damage from Sandy, the ABFE maps have no bearing on you at this time."

McMahon said that if property owners are not forced to elevate because of the 50-percent rule, they could benefit from having more information before making the decision.

__________

Read "FLOOD ELEVATION FAQs: New Jersey's Emergency Flood Elevation Rule" (or click on the attached PDF)

__________ 

Anybody who holds a mortgage on a home in a flood zone is required to carry flood insurance. Buyers of properties in flood zones likely will have to pay the full actuarial flood-insurance rates and won't enjoy the same stepped 25-percent increases as existing policy holders when the changes become effective in August 2013.

"If your property was not substantially damaged, you do not need to take any action now," the state Department of Environmental Protection writes in a FAQ document (see links above) released this week.

"FEMA anticipates some changes to these maps (the ABFE flood maps) for both elevations and zones," the DEP writes. "The ABFEs currently reflect the most accurate modeling, topographic maps and scientific data available. FEMA plans to release updated flood maps over the next six to seven months, which will further fine-tune coastal flood elevations. The regulatory process to finalize the maps could take up to two years."

"Your rates could increase when FEMA adopts its final flood maps," the DEP writes. "If you do not meet its elevation standards, which are likely to be close to the ABFES, your rates could increase even more significantly."

The FAQ from the DEP also echoes what Gov. Chris Christie has been announcing this week — that the state will work to facilitate grants to help provide additional funding for homeowners to elevate their homes:

"FEMA can provide up to $30,000 to cover the Increased Cost of Compliance (ICC) with federal, state and local regulations if you have federal flood insurance. In addition, the Christie Administration intends to provide grants to homeowners with substantially damaged homes to help them offset some of the costs of elevation, mitigation and renovation, and intends to announce in the spring the mechanism for such grants. In order to access any additional funding, FEMA requires property owners reconstruct using the best available data."

The state says that even if homes are substantially damaged (requiring elevation), homeowners can live in the structures for up to four years if they take temporary measures to make homes habitable pending elevation.

Mary Chase February 17, 2013 at 02:38 PM
Yet if we take one step to elevate before receiving grant money - even tho we are being forced to elevate by the feds - we automatically disqualify for the grant. How does that help people rebuild faster and better? So everyone can rebuild their kitchens and bathrooms and floors and walls with their flood insurance money, which is now being paid to many people who have been waiting for 3+ months, but can't start elevation yet without losing their eligibility for the grant? What if I want to go into my 401K or borrow from my parents or even take an SBA loan - why can't I elevate now before rebuilding the inside and still get the grant $$$ later? Government wants us to rebuild but penalizes us for being resourceful - frustrating but not surprising....
Margaret February 17, 2013 at 02:47 PM
I thought we had to elevate B4 we can accept any money from the ICC grant. They have to come and inspect to make sure that the $$ is being spent on elevation. Then we can hope to see possibly 30,000..
Chief Wahoo February 17, 2013 at 02:57 PM
So everyone should sit around doing nothing ,so some bureaucrat with a crayon can make marks on a map all while waiting for money to fall out of the sky that will never come.
George February 17, 2013 at 03:32 PM
Erroneous flood maps! "Overkill" elevation mandates! Exorbitant annual premiums! See what you can do to resurrect your property value and help save the Shore... at Facebook.com/StopFemaNow
Rich Daunt February 17, 2013 at 05:26 PM
This is a crock of craparama. We have already put our home back. When and if need be, we will stop paying BOA, save, save and save and move far away from this trash bin that used to be a nice area.
Ben Angeli February 17, 2013 at 10:02 PM
The amount of misinformation and conflicting information is frustrating. We went to an information meeting in Manahawkin concerning LBI. This article reads that if the home was substantially damaged, we are forced to raise the house. We were told differently The question for anyone out there is, Can we be forced to raise our house? I understand the insurance is going up, but if we choose not to have insurance at $10-$30k per year, then why do I have to raise my house?
Mary Chase February 18, 2013 at 01:15 AM
The ICC money comes from a provision in your policy. You are entitled to that if you wish to or have to raise your house and you have flood insurance, period, as long as your claim does not exceed $250,000 total. The hazard mitigation grant money will come from block grants going to the towns and will be given to individual homeowners raising their houses, to make up the difference between the policy proceeds of $30,000 and the actual cost of raising the house, which could be double that amount. It is the hazard mitigation grant - not the policy proceeds of $30,000- that you will forfeit if you start to raise your house before you get the grant. It's ridiculous but true. I think they are hoping that people will give up waiting for the money and just find it somewhere else.
George Kasimos February 18, 2013 at 01:39 AM
I agree Mary, I am in the same boat. I would like to get it all done and move forward. FEMA and the government do not have common sense.
George Kasimos February 18, 2013 at 01:42 AM
There will be a meeting this Saturday 2/23/13, 3-4 pm. Belly Busters 709 Fischer Blvd, Toms River, NJ Stop FEMA Now !
George Kasimos February 18, 2013 at 01:43 AM
Dont quit just yet Rich. Lets fight together. Or we leave together. But first lets put up a good fight.
Karen M February 18, 2013 at 01:59 AM
@Ben, I was told by Bonnie Flynn, that if we are over the 50% damaged that we would have to be in compliance with the map. She did tell me that they are fighting the zone changes and that nothing will be decided upon til August, when the preliminary maps come out. I don't think that they can force you to raise, but there are ways around that.I heard that if you don't raise you probably won't be able to sell your home in the future because banks don't want to insure that much of a risk, and I also heard that it will be difficult to get a CO. So, technically they can't, but like I said, in the long run, if you try and sell your home, it will become a headache. I was told by a house raising company today that they do all the necessary grant paperwork for you and that tghey secure the funds to raise your home. They also have it in their contract that if they don't secure the grants for you, you are not binded by that contract. I am going to apply for the ICC, because even if I don't raise, I at least gave myself the opportunity to try. I don't need to carry flood ins., because my house is paid off, but there are alot of people who don't have that choice. Do your research thats the best way of finding out what is factual and what isn't. Bonnie supplied a wealth of information.
Mary E Rowlands February 18, 2013 at 03:05 AM
What I want to know is what is Trenton doing about all of this? I did the flood map thing last year and was told to raise it 10 feet. Funny thing though is that I 've never had a problem with flooding ever. The house is pretty old too.
karen s. February 18, 2013 at 12:57 PM
It is my understanding that even if you apply for and wait for Hazard Mitigation grant money before you raise your home there is no guarantee that you will receive the grant money it is still uncertain who will be approved for these grants. you are also responsible to put up front 25 percent of the amount you might receive in grant money. This information was given to me by stafford township. I was also told more grants will be coming but there is no information on how they will be distrubuted based on income, credit, etc. or lottery style. no one seems to be clear on that. I agree with the previous comment about our government waiting for people to get tired and give up relying on our government and will begin to find their own resources. And as usual people who work and save and pay their bills probably won't be entitled to any grant money anyway. We are personally dealing with a permanant residence, how long can we be displaced???
Karen M February 18, 2013 at 04:49 PM
But then the guy that I was talking to who deals with this stuff because of the amount of homes that they raise says that the purpose of the grants is to offset the cost of the raising and they want people to raise their homes. I also told him that I had heard that the grants are not available for everyone and he told me that wasn't the case, so you don't know who to believe anymore. I will fill out the paperwork, but I'm not going to expect to get anything.If it works out fine, if it doesn't I guess my house is staying on its crawl space, oh well. I just wish that there were more direct answers to all of these questions, I will give Bonnie Flynn another call and I'm going to ask her once again what is fact and what is fiction and maybe she can meet somewhere in the middle. I don't trust anyone's answer anymore.
karen s. February 19, 2013 at 01:55 AM
i'm curious which house raiser is saying that the grant money is a given. i have spoke to almost every name out there for house raising and nobody has told me that or told me that they do all the grant paperwork for you. You are correct about not trusting any answers, how can you trust when everyone you speak with gives you different information. Talk about frustrating
Karen M February 19, 2013 at 02:44 AM
It was Ducky Johnson House Movers. They are extremely reputable and have been around since the 60's. I received a brochure from them and inside of that brochure is a contarct that clearly states "that they work on my behalf to secure the financing of my project by performing all necessary and customary pre-requisites for the funding of my project as may be set forth by any currently unnamed Federal flood mitigation grant program that may come into existence during the next 5 years. I understand that once my home qualifies for the currently unnamed Federal flood mitigation grant program that Ducky johnson will supply me with an additional contract that will include but not limited to a scope of work associated with the elevation project for which my home qualifies. Ducky Johnson will then perform these items on the scope of work in exchange for the financing that I have been deemed eligible to receive from the aforementioned, currently unnamed Federal flood mitigation grant program. " It also goes on to state that if the home is not deemed elegible, then the contract is null and void. The man I spoke with did tell me that they deal with this on a daily basis and he said they do secure the funding.
Karen M February 19, 2013 at 02:52 AM
I think that I would also give this company a bit more credence because they have dealt with Katrina, and he said that they are still working down there. They've also worked in Gavelston Tx and Florida so they have extensive experience dealing with hurricanes and house raising. There are alot of companies just popping up that haven't even been in the house raising business, so I would also be careful who I trust. Do your research.
karen s. February 19, 2013 at 11:44 AM
I feel like all I have been doing is research. But the whole process is very complex. Interesting I have not heard this name before, sounds like someone who knows his business. Thanks for the info.
Brenda S February 23, 2013 at 01:41 PM
What is the process for applying for the Hazard Mitigation grant money to raise our home?
Patty February 23, 2013 at 01:49 PM
Go to tomsrivertownship.com, there is a link there & you can do it right online.
Brenda S February 23, 2013 at 08:05 PM
Thank you!
Joe February 23, 2013 at 10:37 PM
I heard a develper is moving in to buy up multiple lots on LBI, this is going to drive the middle class out along with all the ratables expect your taxes to rise shortly to pay for this loss of ratables. Goodbye middle class hello wealthy developers. Stafford has said they have already lost 167 million in ratables and counting. Try to get as much equity out of your home and HEAD OUT OF TOWN

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