Home builders construct housing where it is needed and where there is demand: close to transportation hubs, job centers, and, yes, in flood-prone areas.
To protect home occupants in the event of flooding, Congress created the National Flood Insurance Program (NFIP) in 1968. Since the program’s inception, Congress has required this insurance of anyone who owns or purchases a property within the 100-year flood plain and has a federally backed mortgage. With minimal private sector participation, the NFIP has been the primary option for homeowners living in the flood plain.
The NAHB has been a long-time NFIP proponent because it can provide affordable flood insurance needed for a home purchase. As such, the NAHB is doing its part to ensure the program remains viable.
As the NFIP approached its reauthorization deadline in 2017, NAHB urged lawmakers to make certain it continues to offer reliable, predictable coverage. However, after the hurricanes last summer, conversations about long-term reauthorization were put on hold. For the past several months, the NFIP has undergone a series of short-term extensions. The latest extension will let the program continue to July 31.
But there is growing momentum to find a long-term solution.
The House passed an NAHB-supported flood insurance bill in November 2017 that would reauthorize it for five years. The legislation contained modifications to streamline mapping, increase transparency, and expand the Increased Cost of Compliance. Thanks to NAHB’s advocacy, the House removed draft provisions that would have hurt new construction and “grandfathered” properties.
NAHB encourages the Senate to act on a bill that also fosters a stable program in the future. Builders need to talk to their members of Congress to develop a solution before the July 31 deadline.
The stakes are high. Any coverage lapses will have significant consequences for our industry and our customers. Home buyers will not be able to obtain safe, affordable housing where they want to live. It is also important that premiums remain reasonable and predictable. As we have seen before, unexpected rate hikes have prevented many home closings from taking place.
Limiting access to reasonable flood insurance also slows economic growth. NAHB’s economics team found that annually, new construction in the 100-year flood plain nationwide creates roughly 588,000 full-time jobs, $34 billion in wages and salaries, and $24 billion in taxes and other revenue for state and local governments.
We need a strong national flood insurance program that allows us to provide safe, decent housing to Americans across the economic spectrum. Let’s work together to urge officials to reauthorize the NFIP in a predictable, affordable, and reliable manner that will safeguard its solvency.
