Congressman Frank Pallone (D-NJ-06) and Senator Bob Menendez (D-NJ) introduced the bipartisan and bicameral National Flood Insurance Program Reauthorization (NFIP-RE) Act of 2023, which will encourage environmentally reckless building.
This legislation would reauthorize the program for five years – providing money for homeowners, small business owners, and real estate developers but it will also implement a series of sweeping reforms to reduce costs, make generational investments in communities to reduce flood risk, and establish a fairer claims process for policyholders – many of which were exposed in the aftermath of Hurricane Sandy, which hammered Sayreville and other nearby towns.
Established by Congress in 1968, NFIP provides affordable, government-administered flood insurance to property owners, renters, and businesses.
However, the National Marine Fisheries Service (NMFS) found in 2008, that the administration of the NFIP is contributing to the extinction of salmon and orca in Puget Sound. The Endangered Species Act (ESA) requires that the actions of federal agencies not jeopardize threatened and endangered species or destroy the habitat upon which these species depend for survival and recovery. Unfortunately, in April 2009 FEMA issued a policy statement reneging on their agreement to strengthen protections for floodplains in Puget Sound. In a letter to NMFS, FEMA made clear that they would no longer require or enforce new guidelines as required under the Endangered Species Act.
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“Delaying improvements to the National Flood Insurance Program only leaves frontline communities, homeowners and businesses at risk to climate-fueled hurricanes, storms and floods,” said Jessie Ritter, director of water resources and coastal policy for the National Wildlife Federation. “Instead of punting for the 17th time, our leaders must reform the National Flood Insurance Program and prioritize improved flood-risk disclosure, floodplain management, and proactive mitigation, including through natural infrastructure — which benefit people and wildlife alike.”
The National Flood Insurance Program is a federally subsidized program, administered by the Federal Emergency Management Agency, that has three primary components: to provide flood insurance, to improve floodplain management and to develop maps of flood hazard areas.
Critical reforms are needed to modernize the program and discourage future construction in flood prone areas, including improving flood map accuracy and flood risk disclosure; supporting insurance rates that reflect actual risk to homes and businesses while providing for means-tested assistance for those who cannot afford actuarial rates; and investing in and encouraging community-wide, nature-based mitigation.
Instead of guiding development away from floodplains, NFIP has actually had the opposite effect—the federal insurance has actually subsidized development in risky areas. Floodplain development increases the risk of devastating floods, increases taxpayer costs, and degrades habitat and water quality. Unfortunately, natural floodplains are often considered prime building locations and rarely receive the protection they deserve.
As climate change accelerates, scientists project that floods will become more frequent and severe, further harming species and habitats and putting humans and property at risk.
Climate change, however, has brought new, unfamiliar extremes—longer heat waves that kink metal, sea-level rise that overtops seawalls to flood homes, higher winds that shred rooftops, deeper drought that buckles asphalt driveways, and wildfires that obliterate whole communities in mere hours. In 2022, extreme-weather damages totaled over $165 billion.
No state has yet developed a comprehensive plan to tackle the issue of building and land-use practices in a warming world. Nor has the federal government developed a strategy.
“The National Flood Insurance Program — the federal money pit that created perverse incentives to own property in areas most susceptible to climate change — is set to expire again on Sept. 30,” said Bloomberg’s Jonathan Levin. “Unfortunately, policyholders and taxpayers have grown numb to the drama of such deadlines because Congress has been continually renewing the program through short-term, kick-the-can-down-the-road extensions since 2017.”
Congress should end premium subsidies for high-earning households as soon as possible, require FEMA to update flood maps to account for the consequences of climate change, and make difficult choices about climate adaptation.
“It’s not enough now for the Democratic Party to wipe their hands and say, ‘IRA solved it all.’ We’re still in a crisis. This is still an emergency,” Michele Weindling, electoral director at the Sunrise Movement, a youth-led progressive environmental advocacy group that wants President Joe Biden to declare a climate emergency.
“I frankly think that it’s absurd that while … the Biden administration is celebrating the one-year anniversary of the Inflation Reduction Act, it is going unacknowledged that the administration has not done enough to address fossil fuel supply,” Zanagee Artis, a founding member and executive director of the youth-led climate group Zero Hour said last week.
As Biden lauds his administration’s environmental achievements on the 2024 campaign trail — such as rejoining the Paris Agreement, designating new national monuments, and establishing the White House Office of Environmental Justice — young activists are calling out the administration for moves to open more land to oil drilling, permitting fossil fuel infrastructure investments and ignoring the urgency of global warming.
The Biden administration approved the controversial Willow Project, an oil drilling operation, in Alaska earlier this year, and pushed forward the Mountain Valley Pipeline in Virginia and West Virginia. The administration also OK’d a Trump-era decision to let Alaska LNG export liquified natural gas to countries with which the U.S. doesn’t have a free trade agreement.
“They’ve done a lot of great work on electrification and the build out of renewable energy. But we think that commitment to environmental justice and the phase-out of fossil fuel production is sorely lacking,” Artis said.
Treating climate change as an emergency is “a completely different thing” than declaring one, Artis said. He also warned against “youth-washing” the issue — which he described as inviting young people to be part of outreach and the celebration of the IRA, but ignoring youth calls to stop the Willow Project or oppose the Mountain Valley Pipeline.
. Sierra Club policy over the years has generally been to oppose federal flood insurance practices that encourage developments in flood prone areas
“Government-subsidized flood insurance should be available ‘up to a certain value.’ This will cover low-income housing and it will pay for a percentage of all housing,” said Bob Murphy. “Insurance should be available for tenants and for mobile homes. (“Mobile homes” are poor peoples’ housing for much of rural America.) The people who collect benefits should be allowed to spend their money on housing outside of flood plains. No need to rebuild old homes. Restricting insurance to ‘primary residence’ may be appropriate. No need to pay for summer cottages.”
“The NFIP is outdated and ill-prepared for the impacts of climate change,” says Joel Scata, an attorney in the Natural Resources Defense Council’s Healthy People & Thriving Communities program. “The program must be reauthorized and reformed to ensure that the nation’s communities are prepared.”
In 2021, NRDC and the Association of State Floodplain Managers jointly petitioned FEMA to update its standards in order to reflect the new climate reality. Among the petition’s requests were that all new or substantially improved structures be elevated higher than the level of a 100-year flood; that all new and revised NFIP floodplain maps depict how the floodplain will change over time, especially concerning sea level rise; and that homeowners seeking to retrofit their homes have easier access to NFIP funding.
Today, NFIP covers more than five million policyholders in 23,000 communities across the country, providing nearly $1.3 trillion in coverage. As of August 2023, there are more than 5 million policyholders nationwide covered by the National Flood Insurance Program (NFIP). The NFIP is the nation’s largest single-line insurance program, providing nearly $1.3 trillion in coverage against flood.
Environmentalists have several complaints about the National Flood Insurance Program (NFIP):
- It subsidizes development in flood-prone areas. The NFIP charges artificially low premiums in many areas, which encourages people to build in flood-prone areas. This can lead to more flooding and damage, as well as more taxpayer money being spent on disaster relief.
- It does not adequately reflect the true cost of flood risk. The NFIP’s premiums are based on historical flood data, which does not account for the increasing risk of flooding due to climate change. This means that policyholders are not paying the full cost of their risk, which can lead to more claims and financial problems for the program.
- It does not do enough to discourage rebuilding in flood-prone areas. The NFIP allows homeowners to rebuild their homes in the same location after they have flooded, even if the property is in a high-risk area. This can lead to a cycle of repeated flooding and rebuilding, which is not sustainable.
- It does not do enough to protect wetlands and other natural floodplain buffers. Wetlands and other natural floodplain buffers can help to reduce flooding by absorbing excess water. However, the NFIP does not require communities to protect these buffers, which can increase the risk of flooding.
Environmentalists argue that the NFIP needs to be reformed to address these problems. They propose changes such as:
- Charging higher premiums in flood-prone areas.
- Reflecting the true cost of flood risk in premiums.
- Discouraging rebuilding in flood-prone areas.
- Protecting wetlands and other natural floodplain buffers.
Reforming the NFIP would be a complex undertaking, but it is essential to address the program’s environmental problems. By doing so, we can help to reduce the risk of flooding and protect our communities from the impacts of climate change.