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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.

 

Editor's Note: This story was written by our Ocean City Local Editor and we wanted to share these thoughts with our readers in the greater Point Pleasant Borough-Beach area. Point Pleasant Patch is continuing to reach out to FEMA and other government officials to get more information about how flooded residents should proceed as they wait for FEMA's flood maps to become preliminary for this area, which may be in August or September. Thanks for continuing to read Patch.

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 a temporary Advisory Base Flood Elevation (ABFE) map.  

The rest of Ocean City'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. Preliminary maps for Atlantic County are due in September and for Cape May County in October. 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)

See "Guide to Making the Call on Elevating Your Ocean City Property."
__________ 

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.

Chief Wahoo February 12, 2013 at 09:10 PM
Anarcho-Capitalism
Spooner February 12, 2013 at 10:03 PM
Sean- think you better read your mortgage contract more carefully. For one:banks can impose on you flood insurance even if your not in a SHFA. If after new map becomes finalized and your home is now in SHFA, you will need to appeal to FEMA if you can prove that your first floor living area elevation is above BFE. But again there's no guarantee that if FEMA makes that determination, that they the bank will wave flood insurance coverage. Sorry to say it, but 'Chief Wahoo' is right, banks have become to powerful in Washington, DC. That's why I had to laugh when Congressman Chris Smith showed up in Point Pleasant Beach the other day with Lt. Gov. Kim Guadagno, promoting BW businesses...
re-tired February 13, 2013 at 12:37 AM
I have been to two Fema Town hall type meetings and they say there will be only "minor" changes in the maps so they say .This makes it tough to decide what to do .I wrote an e-mail to fema about all the twisties and turns the flood map of my area point boro and they wrote me back from an "expert" on their mapping that they took the old maps and factored the heights x 1.2 ,hardly a scientific study ! At the meetings they also said rezoning an area usually takes 5 years but they "rushed" the results so people could plan what to do .Sounds like the Obama health care plan all over again .Lets do it and see what happens ,we don`t really know anything ! With all these morons making decisions about our lives both parties should be voted out of office . If you didn`t flood you should be just fine ,if you flood raise 5ft no pilings unless you are on the beach on a barrier island ,that's my "scientific " decision and its way better and cheaper than FEMAs ass---le experts !!!
Nick Carraway February 13, 2013 at 01:55 PM
I don't have a problem with the idea that we should build safer homes at a higher elevation, going forward. But forcing homeowners whose houses were not significantly damaged by Sandy to raise their homes and meet the requirements is ridiculous. Insurance premiums have always been based on risk factors. If a home was built 50 years ago and never flooded or only flooded its basement or even first floor in Sandy, then, at least at this point, the risk of damage is low and should be treated accordingly. Quite frankly, there are many older homes that were built much better than the new homes built today, and although everyone is currently focused on flood damage, there are other issues that plague the Jersey Shore, too, like the winds that come with Nor'easters.
Non Benny February 13, 2013 at 10:16 PM
On the beach and zero damage from Sandy and nothing in the 92 storm - so why should i have to pay more $ ? Reside in PPB - house built in 29 and never been impacted - sounds like i have to pay for everyone elses loss - what a croc o S**T

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