The Cost of Insuring Expensive Waterfront Homes Is About to Skyrocket

[mahatmakanejeeves]

Source: New York Times

The Cost of Insuring Expensive Waterfront Homes Is About to Skyrocket

New federal flood insurance rates that better reflect the real risks of climate change are coming. For some, premiums will rise sharply.



Beachfront homes in Anna Maria, Fla. One ZIP code in the area leads the country in the number of single-family homes facing an increase of more than $1,200. Eve Edelheit for The New York Times

By Christopher Flavelle
Sept. 24, 2021
Updated 9:38 a.m. ET

Florida's version of the American dream, which holds that even people of relatively modest means can aspire to live near the water, depends on a few crucial components: sugar white beaches, soft ocean breezes and federal flood insurance that is heavily subsidized.

But starting Oct. 1, communities in Florida and elsewhere around the country will see those subsidies begin to disappear in a nationwide experiment in trying to adapt to climate change: Forcing Americans to pay something closer to the real cost of their flood risk, which is rising as the planet warms. ... While the program also covers homes around the country, the pain will be most acutely felt in coastal communities. For the first time, the new rates will also take into account the size of a home, so that large houses by the ocean could see an especially big jump in rates.

Federal officials say the goal is fairness -- and also getting homeowners to understand the extent of the risk they face, and perhaps move to safer ground, reducing the human and financial toll of disasters. ... "Subsidized insurance has been critical for supporting coastal real estate markets," said Benjamin Keys, a professor at the University of Pennsylvania's Wharton School. Removing that subsidy, he said, is likely to affect where Americans build houses and how much people will pay for them. "It's going to require a major rethink about coastal living."

The Biden administration's new approach threatens home values, perhaps nowhere as intensely as Florida, a state particularly exposed to rising seas and worsening hurricanes. In some parts of the state, the cost of flood insurance will eventually increase tenfold, according to data obtained by The New York Times. ... For example, Jennifer Zales, a real estate agent who lives in Tampa, pays $480 a year for flood insurance. Under the new system, her rates will eventually reach $7,147, according to Jake Holehouse, her insurance agent.

And that is prompting lawmakers from both parties to line up to block the new rates, which will be phased in over several years.

{snip}

Read more: https://www.nytimes.com/2021/09/24/climate/federal-flood-insurance-cost.html

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I don't see how the houses in the picture could not flood.

I'm not sure how it ended up as news at the NYT. The change in policy has been known for some time. For example:

Sun Sep 5, 2021:

Shocked Shocked 2: For 1.7 Million Floridians, Flood Insurance Premiums Set To Rise

https://www.democraticunderground.com/1127147618

-- -- -- -- -- --

Kevin M. Kruse Retweeted

https://twitter.com/KevinMKruse

This is huge.

Florida's coastal development is built to a large extent on heavily subsidized federal flood insurance.

New from me: FEMA is about to start charging people the true cost of their flood risk, partly to warn them about the dangers they face as climate change gets worse.

The shift could reshape coastal real estate markets — unless Congress manages to kill it. https://nytimes.com/2021/09/24/climate/federal-flood-insurance-cost.html?referringSource=articleShare

Link to tweet

[Fullduplexxx]

1. I didnt know people who could afford beach front housing got govt subsidies

[DENVERPOPS]

7. The people who live on or near the coasts

or inland flood zones, scream their heads off about "Welfare", food stamps, medicaid or ANY help for the less well off.


The insurance companies would not touch insuring these coastal or inland flood zone properties/structures for ANY price.

So congress at some point decided to give these property owners Federal, dirt cheap, insurance........

Every few years a lot of coastal and inland flood zone structures/homes get wiped out, the Feds pay to replace them, and it happens over and over.........

The feds could raise the prices of the insurance ten fold, and it would still be dirt cheap and nothing more than welfare.

Hell, I wish the feds would offer government subsidized insurance for all the structures in any forest or wildland right now. Home owner insurance companies are cutting out policies, and not renewing many existing policies after some of the massive wildfires that have leveled entire rural cities these past years.........Just look at California the past couple of years, or the wildland fires in Colorado and other Western States last fall. Check out what is going on in Alaska these past few years........

[XanaDUer2]

12. I didn't , either

They're decreasing, oh well

[cstanleytech]

2. To bad they cannot mandate that all homes and buildings that have any residents living in them for

more than 4 weeks out of the year have to be removed or moved 1000 feet inland from the coast along the ocean.
It would free up so much of the coast and allow people to enjoy a more natural view overall.

[csziggy]

13. A thousand feet inland would mean no houses on a lot of coastal islands

Which actually would be a good thing since those barrier islands provide a buffer when storms hit.

For instance, Anna Maria Island, the one mentioned in the article, and the island south of it, Longboat Key, are both less than 1000 feet wide for most of their length and even with widest parts are less than 2000 feet wide.

I would very much like to see those islands revert to their original conditions - but there is probably not time for that to happen before they will be completely inundated. On the good side, those houses will make great reef structures and places for fish to hide once they are under water.

[erronis]

19. 1,000 feet is nowhere near enough.

Even current sea levels the increasing ferocity of storms and hurricanes are felt 50-100-200 miles inland. True the pure flooding damage is closer to the coasts.

With a 1-3 foot rise in sea levels the flooding will go much further in especially on that spit of sandbar that is called Florida. The flood/wind damage will also move further inland.

[Marthe48]

3. We wanted to buy a house in town

Marietta, Oh, on the Ohio River. Front St. Putman St, Harmar all subject to river flooding. We found a house we liked on 2nd. St. That was the year FEMA raised flood ins. from $400/yr to $2000/yr. I figured we could afford the mortgage or the ins. So we didn't buy that house, even though there was no historical record of that house or that neighborhood getting flooded. FEMA raised the premiums because of flooding along the Missouri River.

We have a river lot in WV, on the Little Kanahwa. We bought it in 1995. Until 2017, it had not flooded, and our neighbors down there parked their boats, docks, etc. on our lot when there was a threat of high water. In the early 2000s, we decided to put a used mobile home on it. We asked all of the entities we had to work with and everyone said it was fine. After we got the mobile home in place, anchored by a pro, and paid the costs asscoiated, a Wood Country FEMA rep started leaving notices on the door that we were in violation of flood plain laws. We ended up having to meet with the Wood County Commissioners who were sympathetic, but insisted the mobile home either had to be placed 8 ft above the 100 year flood stage, or moved. We sold it at a loss.

In the meantime, out property taxes on our longtime home has had a surcharge attached to pay for watershed expenses associated with the Muskingum River watershed, which doesn't affect our property at all, but in the interest of fairness has been added to every property owners' taxes in the watershed counties.

I'm over the fantasy of living on the water. The river lot has flooded twice since 2017, and the neighbors pull their boats, docks, etc up the hill to higher ground. Yay, global warming. The lot is improved, but I don't have anything on it.

[erronis]

20. That's a truly sad story. One I've heard from other river-dwellers. When you say "improved",

does that mean septic installed? One of the problems with rising water levels, even fluctuating, is that these septic systems are no longer usable (even dangerous.)

[Marthe48]

22. It has city water, electricity, gas if we want it

The sewage is a pond system. There is a sediment pond the lots can hook their drainage pipes to. We have an HOA which collects dues for pond chemicals. The pond gets regular testing from local EPA and they keep a sharp eye on it. The pond is a nightmare. We have many property owners who won't pay their dues (35/yr for empty lots, 125.00/yr for lots with structures. The HOA rules include no renting out, no year round living. Some people bought 6 lots with the idea of improving them and putting for to 6 campers on each lot to rent to frackers. Members of the HOA got the news out and turned down their request to do that. The pond wouldn't have handled that much effluvia.

I think there are 2 or 3 people who live on their property year round. Most of the places aren't used often. The HOA expires in 2024, and I don't know if there are plans to renew it, or try to get city sewage installed. There is a water treatment plant less than 1/2 mile away. If the last flood didn't wash into the pond, it came pretty close.

[lark]

4. This is much needed progress.

why should taxpayers pay these millionaires/billionaires cost of insurance when they insist on maintaining unreasonable housing. They need to pay every dime of cost and government needs to stop mollycoddling the rich and make them pay their own way. This land needs to be vacated because it is will flood with increasing regularity. I'm talking about coastal and river front homes that get flooded frequently.

[underpants]

6. These aren't all millionaires

Doing very well yes but not necessarily millionaires. Where this will hit a lot of people is in summer rentals.

[Marthe48]

23. Renting a beach house is almost unaffordable

We used to be able to rent a beachhouse for a week for under $1000.00. Now, you can hardly find a house within walking distance under $2000.00.

I liked it when we could rent a bungalow with 2 or 3 bedrooms, 1 1/2 baths right on the beach. Now, the small houses are rare. New houses are gigantic, 12-16 bedrooms, 5+ baths, and $5000.00 for a week. Basic ins. is probably over the moon, let alone FEMA.

[raccoon]

25. Exactly! That's how it is at our beaches in SC.

Maybe all of them, I don’t know. But when I was a young person there were lots of small bungalows like you mentioned.

[Marthe48]

26. We stayed at Surfside, Pirateland, NMB, Cherry Grove,

and tried The Outer Banks in 2004. While we loved the Myrtle Beach area, it was getting so developed and so expensive. We first went to Southern Shore in OBX, and got a great pet friendly house for under $1000.00/wk, across highway 12. We did better the next few times, renting houses on Pea Island and then South Nag's Head. The last house my husband and I rented was in Nag's Head, and for me, a 5-10 minute walk to the beach. It was around 1200.00/wk. Our kids do the renting now, and take me along as a guest. I couldn't afford, wouldn't want to afford, the rents. Although, to be fair, the others want a pool and/or hot tub, so that adds to the costs.

I like Outer Banks better, because it isn't as developed. We stayed in Corolla this last time. The house was pretty far from the beach (I think the ad meant 'as the crow flies' not the actual path you have to take!). I walked over and back once, and got a ride one way or the other the other times I went. lol

[Calista241]

27. Should we just ban people from living in California also?

Since fires burn down the state every summer.

[lark]

28. Different scenario, that's an entire state not just the coastal & riverfront areas.

I don't know the answer for California, there are too many people on a land not suited for it. So sad. Oregon and Washington had issues with extreme heat and fires too - the entire west is in such fragile state and getting worse. I'm just praying that people much smarter and well versed in the environment can help. It seems we are just hell bent on destroying ourselves & our world.

[ancianita]

5. Removing that subsidy will remove replacement costs & make them take personal responsibility.

It's about time they stopped their communist welfare. Anna Maria (& nearby Sarasota) is Vern Buchanan's 16th District and Trump country.

Yes, as the nation's promoters of climate denial, let them feel the economic pain they have voted for others to suffer.

Let every last billionaire on Trump's FL east coast island pay through their wazoos.


https://www.forbesindia.com/upfront/leaderboard/all-the-us-presidents-neighbour-at-maralago

[onethatcares]

8. one solution that will probably be adopted

along with the parking meter fees residents will start charging people to walk on the beaches at pro-rata charges. $5.00 per hour per person, additional $1.00 per hour per person for a cooler, a lawn chair, an umbrella or shade structure. More if you bother their view of the water.

It's the Murican dream....

Imagine what the condo association fees will become, or the insurance on a 24 story hotel.

Looks like the bubble is bursting on waterfront living.

[getagrip_already]

9. more likely, some homeowners will "go bare".....

And simply not carry flood insurance. They will in effect be self insuring. That is fine by me.

To do that, they likely can't have a mortgage though. So not sure how many will be able to opt out.....

[roamer65]

30. Yes. No bank or any other lender will write a mortgage without adequate insurance.

That means little or no buyers.

Prices will collapse.

[RussBLib]

10. In Texas, our flood ins rose 10%

From $700/yr to $770/yr.

We live on South Padre Island, a tiny barrier island off the coast of S Texas. Our home is built up the requisite 12' and we are on the Bay side, so we don't get the brunt of storms and high tides, but the idea of "the big one" coming and destroying our home is always just under the surface. The whole island is, at most 9' above sea level. We have not had a big storm since Dolly in 2008, and the previous owner of the home (and builder) took that hit. You could say we are due.

As for Florida, those rates should rise. They get battered every single year.

[cinematicdiversions]

24. They haven't had a real hurricane since 1923.

That's sad Anna Marie island floods every time we get more than half an inch of rain.

[XanaDUer2]

11. Federal subsidies are socialism nt

[The Jungle 1]

14. The amount of federal money beach communities get is stunning.

It is not just the flood insurance welfare we also constantly pay to pump sand up on the beaches. The sand washes away with every Nor'easter. You can bet they get government low interest loans every time a hurricane hits.
So we pay all this money and then when we visit the beach we are forced to buy a beach pass.

[mahatmakanejeeves]

15. Falling Into the Ocean: Orrin Pilkey's Call to Retreat From the Beach

Note: do not confuse Orrin Pilkey with his brother, Walter Pilkey, who taught mechanical engineering at UVa.

HOME > NEWS >

Orrin Pilkey's Call to Retreat From the Beach

Orrin Pilkey's call for humans to retreat from the beach and allow any structure that can’t be moved back to fall into the sea has been called radical and reproachable in more letters to the editor than he can count. But love him or loathe him, there’s no denying the impact Pilkey has had.

November 25, 2019
Over the course of his 56-year career in coastal geology, Orrin Pilkey has butted heads with real-estate developers and property owners in just about every beach town east of the Mississippi.

His call for humans to retreat from the beach and allow any structure that can’t be moved back to fall into the sea has been called radical and reproachable in more letters to the editor than he can count.

But love him or loathe him, there’s no denying the impact Pilkey, James B. Duke Emeritus Professor of Geology, has had.

The North Carolina Coastal Federation calls him “the man who saved our beaches.” The New York Times calls him “the dean of American coastal geology.” His peers have awarded him nearly every honor for public service in his field, and his former students, many of whom are now influential voices in coastal science themselves, speak of him with reverence.

{snip}

[Coventina]

16. As someone who lives in the middle of the Sonoran desert.

I have a hard time feeling sympathy....

[Martin68]

17. It's about F-ing time!

[Sgent]

18. This will not effect

people with 1 million dollar homes -- they will either raise the foundation or go bare. It will crush a lot of people in S Louisiana, West Texas, and similar because of the expense.

The NFIP will only write a 250k policy max. The feds should buy out those who have these as primary homes (or at least offer). I agree that vacation houses / fishing / hunting camps are a different issue.

[Hortensis]

21. Way, waay past time. Federal disaster insurance has been a way for

the taxpaying public being soaked by others so they can live in luxury risky areas -- decades past when we knew they were predictable diasters waiting to happen. We're not talking about helping people be able to remain on the old family farm here (which is what it should be), we're talking beachfront and fire-nviting California ridgetop sites with magnificent views, with post-disaster replacement subsidized by all the people in the little houses down on the flatlands.

My husband and I regretfully passed on buying a home up a beautiful canyon ridge in California 30 years ago and a home on a Florida river much more recently because we could only afford the investment if everyone else helped pay to insure it. Big no.

[truthisfreedom]

29. It's hardly worth discussing.

People put their heads in the sand over climate change. All of these homes need to be on stilts with boat landings.