A New York City home destroyed by Sandy.

Rising Flood Insurance Rates: Building Resilience & Protecting Affordable Housing

Editor’s Note: This guest blog from the Center for NYC Neighborhoods draws from their report, Rising Tides, Rising CostsThis post examines some of the effects of climate change on coastal urban communities, and presents strategies to protect long-term housing affordability in the face of new laws and insurance policies that are adjusting to the realities of climate change.

More than two years after Superstorm Sandy, New York City homeowners face one more in a long list of significant hurdles to rebuilding their homes and lives: rising flood insurance rates. At the Center for NYC Neighborhoods, we work with the homeowners and communities still recovering and rebuilding following the storm. Many of the neighborhoods where we work, like Canarsie in Brooklyn and the Far Rockaways in Queens, are home to working- and middle-class families that need to boost their resilience but will struggle to afford rising flood insurance rates, putting them at great risk of foreclosure and displacement.

The Challenge: Rising Flood Rates

Starting April 1st, flood insurance rates across the country will increase significantly, and this will disproportionately hurt New York City. Many homeowners will see their flood insurance rates go up by up to 18%. Others (including businesses and owners of homes with substantial or repetitive insurance losses) will face even steeper rate increases of up to 25% when they renew their annual policy. These costs will rise every year due to changes in federal flood insurance regulations.

New Yorkers are particularly vulnerable to these changes because more than 80% of our buildings currently receive “grandfathered” rates that are subject to some of the largest increases under flood insurance reform. In addition, thousands of homeowners will be required to purchase flood insurance for the first time when FEMA's updated flood maps are adopted for insurance purposes. With these new maps, twice as many people will be designated as living in high-risk flood zones—totaling 400,000. That’s more than the population of Cleveland.

Over 400,000 NYC homeowners will be designated as living in high-risk flood zones after new maps are implemented. Source: Center for NYC Neighborhoods

These trends could lead to displacement, foreclosure, underwater mortgages, and abandonment.

Responding to the Challenge

Our immediate Sandy response focused on impacted homeowners’ short-term financial needs. We established the Neighborhood Recovery Fund, which deployed grants and loans to help homeowners meet needs not covered by FEMA and to make insurance payments. We also partnered with NYC to reduce displacement by connecting financially vulnerable homeowners to housing-counseling and foreclosure-prevention legal services. This network of counselling and legal services has helped over 4,000 New York families.

Our first priority today is educating communities, because many homeowners remain unaware of or confused by flood insurance rate increases and the floodplain expansion. We created FloodHelpNY.org last summer to enable homeowners to look up their address to find out if they will be affected by flood map changes and learn how they can prepare themselves.

FloodHelpNY.org helps homeowners understand the changes, their risks, and their options. Source: Center for NYC Neighborhoods

We have found that collaboration is key to addressing flood insurance and housing challenges in a post-Sandy New York. We work closely with city government, particularly the NYC Mayor’s Office of Recovery and Resiliency, and community-based and faith-based organizations, to share information, follow trends, and coordinate responses at the national and neighborhood level. We partnered with the NYC Housing Recovery Office, LISC New York City, Enterprise, and Pratt Center for Community Development to organize a series of “Sandy Help Desks.” They provided homeowners with one-on-one flood insurance and financial counseling and assistance with the City’s Build it Back recovery program.

The Center also advocates for long-term resilience measures including developing affordable mitigation options that meet the specific needs of dense cities like New York. Currently, the main route to reducing premiums is to elevate the home, but unfortunately, the cost of doing so is too high for most working and middle class families, especially for NYC’s many attached properties that make physical upgrades significantly more challenging. Another option is ensuring that alternatives like moving electrical equipment and utilities to the top floor of a house meet insurance requirements.

The report we recently issued, Rising Tides, Rising Costs: Flood Insurance & New York City’s Affordability Crisis, helps the broader community to understand the implications of rising flood insurance rates and poses solutions that support NYC in becoming a more resilient city in the face of climate change, while also protecting and maintaining affordable housing.

Learn more by visiting cnycn.org/risingtides, where you can read the report, learn about changes to flood insurance, and sign up for email updates.

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