Homeowners across the country should not be forced to pay for the sudden and dramatic flood insurance premium increases that are the unintended consequence of the Biggert-Waters Flood Insurance Reform Act of 2012, insisted the National Association of Realtors (NAR) in testimony before the U.S. House Financial Services Subcommittee on Housing and Insurance.
“We need a ‘time out’ from the implementation of the law,” said former NAR President Moe Veissi, broker-owner of Veissi & Associates Inc. in Miami. “No one could have imagined rate increases of this magnitude. During the debate over Biggert-Waters, the prevailing wisdom was that actuarial rates would range from hundreds to thousands of dollars, not tens of thousands of dollars or the 1,000 percent rate increase shocks that we are learning about now.”
As the leading advocate for private property rights and housing issues, NAR strongly supports maintaining access to affordable flood insurance. NAR was a vocal advocate for the Biggert-Waters legislation to extend the program for five years and end the uncertainty of shutdowns that were stalling 40,000 home sales each month. However, due to the unprecedented scope of premium increases and other unintended consequences, NAR recommends that Congress seize the opportunity to pass the “Homeowner Flood Insurance Affordability Act.”
This bicameral, bipartisan legislation introduced by Reps. Michael Grimm (R-NY), and Maxine Waters (D-CA), and by Sens. Bob Menendez (D-NJ), and Johnny Isakson (R-GA), would delay further implementation of major rate changes until the Federal Emergency Management Agency completes an affordability study required by Biggert-Waters; creates an office of the Advocate to investigate flood insurance rate increases; and reports to Congress with proposed solutions to any identified problems.
In the interim, NAR calls on FEMA to convene a national summit with key stakeholders to develop a longer term affordability solution. Realtors believe the agency already has ample authority under current law to begin the discussion and should not wait for Congress to enact legislation.
“NAR stands ready to work with Congress and the administration to help homeowners transition to new rates and bring clarity to housing markets subject to Biggert-Waters reforms,” said Veissi.