The Cost of Coastal Living
Those who have properties on or near the waterfront have long been the envy of those who wish they had. That is until recently, and it wasn’t just Hurricane Sandy that has changed their envy to relief. It was the issuance by the Federal Emergency Management Agency (FEMA) of a new map showing a greatly expanded flood plain along with more stringent specifications for buildings in the flood zones. The new FEMA standards change both the flood zone areas and the Base Flood Elevation (BFE), impacting over 685 homes in Greenwich. These major changes were the result of the Flood Insurance Reform Act of 2012 that actually predated the Sandy experience. Sandy simply underlined the need.
This is no small matter. There are a total of fifty-one homes in Greenwich currently not in a flood plane but will be, and an additional 600 homes in zones where the BFE has been raised. Of those 600, 482 are in Old Greenwich. It is not known how many will not be in conformance with FEMA’s higher flood elevations and regulations, but insurance premiums will increase dramatically for nonconforming homes.
There’s not just one overall elevation; BFE is specific to each individual property, which may require a survey, and it will range from eleven to seventeen feet, or one to five feet above present flood elevations. Reference to a FEMA map is needed to determine if a property is in an AE zone, defined as an area where there is a 1 percent annual chance of a major flood event (known as a 100-year storm), or in a VE zone, a coastal high-hazard area subject to velocity wave action. (Witness the many storm waves that have battered the Old Greenwich shoreline.)
The most onerous aspect of the new FEMA regulations is the increase in the Base Flood Elevation. Homes with a basement will be especially impacted since regulations for AE zones classify the basement as the lowest floor and it must be one foot above the BFE. In VE zones the first floor joists must be at least one foot above the BFE, and the house might have to be built on pilings to allow water to flow under and through. One shudders to imagine what our lovely waterfront will look like if people are forced to raise their homes sky high on pilings, in some cases even higher than zoning ordinances allow.
New construction in the flood zones must be in compliance with FEMA specifications in any case. Additions and renovations can be made as long as the cost does not exceed 50 percent of the value of the house. (That’s the short answer; the actual formula for determining relief from compliance is complicated, involving the date of the improvement and when the property was in conformance relative to the dates of several changes made in the National Flood Insurance Program, since its adoption by Greenwich in 1977.)
Participation in the FEMA program is in a sense voluntary. To be eligible for federal flood insurance, a community must agree to adopt the FEMA-defined flood plain map and enforce its minimum regulations. Although there is no requirement that current homeowners in either an AE or VE zone bring their houses into conformity with the FEMA regulations, if they don’t, their insurance premiums will increase substantially, and their eligibility for mortgage financing greatly restricted. It may become a question of raising the house to the required level or paying far more for insurance.
FEMA’s program is designed to prevent much of the destruction caused by past storms and offer property owners a degree of financial protection, but there will be many cases of hardship among those faced with bringing their houses into compliance. For homeowners who have to elevate their houses and utilities, FEMA offers a Hazard Mitigation Grant Program. If eligible, 75 percent of the cost of raising the house above the base flood elevation is paid by the federal government. The town is actually the applicant and administrator of the grants, which cannot be used to pay for repairs. A separate program addresses homes that have been totally demolished.
For decades the National Flood Insurance Program (NFIP) operated in the black, then along came Katrina and Irene and NFIP had to borrow $20 billion from the U.S. Treasury. With the increasing frequency and severity of coastal storms, the program was unsustainable. The result was the reform act of 2012 that discourages building and rebuilding in high- flood risk areas and replaces subsidized insurance rates with rates based on actuarial risk.
Planning and Zoning, charged with overseeing and enforcing the program, has assured homeowners that there will be flexibility in applying timetables for compliance, and that insurance rate increases will be phased in over a five-year period. Nevertheless, it’s a good bet that the Zoning Board of Appeals is going to be kept very busy in the months ahead.