Elevating Homes After Sandy: 'Wait-and-See Approach Is Prudent'

For owners of homes not substantially damaged by the storm, waiting for final flood maps and flood insurance rates could help in making decision.

With a flood map still in flux and flood insurance premium increases still not set, property owners may have too little information to make an informed decision on whether to rebuild their homes at a higher elevation, according to state officials and local insurance agents.

Record flooding from Superstorm Sandy on Oct. 29 caused billions of dollars worth of damage to the coastlines of New Jersey and New York, and in the aftermath of the storm, many owners are wondering if they will be required to elevate their homes.

This much is known: Emergency rules adopted by New Jersey on Jan. 24 require new and substantially reconstructed (where the cost of restoration equals or exceeds 50 percent of the market value of the structure before the damage occurred) buildings to be elevated in accordance with a temporary Advisory Base Flood Elevation (ABFE) map.  

The rest of Berkeley Township's homeowners face a decision based on:

  • Where their property falls on the new map: The Federal Emergency Management Agency (FEMA) released the advisory map last month. It recommends elevations at which a property can survive a 100-year storm with relatively minor damage. It also maps Velocity Zones (V Zones), where properties could sustain damage from storm waves of at least three feet on top of flood waters. Recommended elevations in V Zones are higher. 
  • Whether their flood-insurance premiums will increase dramatically: Shore property owners rely on the government's National Flood Insurance Program (NFIP), which has been billions of dollars in debt since Hurricane Katrina in 2005 and is subsidized by U.S. taxpayers. Legislation approved last year would eliminate taxpayer subsidies and make the program self-sustaining. That means potentially dramatic premium increases for the riskiest policy holders — owners whose properties fall below the base flood elevation on the new FEMA maps.
  • How much it will cost to elevate a home: Estimates have varied wildly in the aftermath of the storm.

The problem for homeowners is that all the factors are still variable.

The "advisory" ABFE maps do not yet take into consideration mitigating factors such as dunes, bulkheads and buildings. Some properties could be moved out of V Zones when new versions of the advisory maps are released in late summer and early fall. Preliminary maps for Atlantic County are due in September and for Cape May County in October. At that point, property owners will have the option to appeal before a final version of the maps is approved. 

Flood-insurance premium increases for most property owners have not yet taken effect either. FEMA has warned that the potential increases could be significant as the program moves toward a full actuarial basis, particularly for homes below base flood elevation.

But the only rate increases effective as of January 1, 2013, are for "pre-FIRM" construction (built before Dec. 31, 1974) for nonresident property owners (these increases are 25 percent).

More rate increases won't be effective until Aug. 1, when insurance premiums are likely to go up 25 percent annually for property owners until the flood-insurance program is self-sustaining. Properties far below base flood elevation could pay more than $30,000 annually, while properties that exceed the recommendations could pay less than $3,000.

"People are getting very upset over a lot of possibilities and a lot of unknown," said Michael McMahon of Ocean City's McMahon Agency. "We believe a wait-and-see approach is prudent. Unless you are in the design process of a new home or are required to elevate your home due to substantial damage from Sandy, the ABFE maps have no bearing on you at this time."

McMahon said that if property owners are not forced to elevate because of the 50-percent rule, they could benefit from having more information before making the decision.


Read "FLOOD ELEVATION FAQs: New Jersey's Emergency Flood Elevation Rule" (or click on the attached PDF)

See "Guide to Making the Call on Elevating Your Ocean City Property."

Anybody who holds a mortgage on a home in a flood zone is required to carry flood insurance. Buyers of properties in flood zones likely will have to pay the full actuarial flood-insurance rates and won't enjoy the same stepped 25-percent increases as existing policy holders when the changes become effective in August 2013.

"If your property was not substantially damaged, you do not need to take any action now," the state Department of Environmental Protection writes in a FAQ document (see links above) released this week.

"FEMA anticipates some changes to these maps (the ABFE flood maps) for both elevations and zones," the DEP writes. "The ABFEs currently reflect the most accurate modeling, topographic maps and scientific data available. FEMA plans to release updated flood maps over the next six to seven months, which will further fine-tune coastal flood elevations. The regulatory process to finalize the maps could take up to two years."

"Your rates could increase when FEMA adopts its final flood maps," the DEP writes. "If you do not meet its elevation standards, which are likely to be close to the ABFES, your rates could increase even more significantly."

The FAQ from the DEP also echoes what Gov. Chris Christie has been announcing this week — that the state will work to facilitate grants to help provide additional funding for homeowners to elevate their homes:

"FEMA can provide up to $30,000 to cover the Increased Cost of Compliance (ICC) with federal, state and local regulations if you have federal flood insurance. In addition, the Christie Administration intends to provide grants to homeowners with substantially damaged homes to help them offset some of the costs of elevation, mitigation and renovation, and intends to announce in the spring the mechanism for such grants. In order to access any additional funding, FEMA requires property owners reconstruct using the best available data."

The state says that even if homes are substantially damaged (requiring elevation), homeowners can live in the structures for up to four years if they take temporary measures to make homes habitable pending elevation.

Joe Semiraro February 13, 2013 at 01:35 PM
Meeting of the newly formed StopFEMANow.com group to be held at Belly Buster's, 708 Fischer Blvd, Toms River at 3PM on Saturday Feb. 23rd.
proud February 17, 2013 at 08:18 PM
A must see video: www.youtube.com/all_comments?v=GbF8q19wodE
Squandered Youth February 18, 2013 at 05:15 PM
Finally, someone at least asking the right questions: how many homes will be affected, how much will their insurance be, and what is the cost of avoiding the premium increase by raising a house? A fourth question should be what is the cost of providing comparable protection through steps such as raising the dunes? It is important not to focus this debate just on homes that move from A to V zones. In the one example FEMA and the State give, premiums go up to $32k if a home moves to a V zone but would still increase to $28k if it it stayed in an A zone. Like a fall from 100 or 1000 feet, either example is fatal, and a lot more homes will be affected by a BFE increase within a zone than by changing zones. $2.5 billion (the cost of raising 50,000 homes) would buy a LOT of dunes. Whatever the merits of adopting the ABFEs for new construction - for which the additional cost of compliance is minimal - the examples given by FEMA and the State suggest that every house at the shore will be compelled by premium increases to elevate - at a cost that is not marginal for existing structures and will not in most cases be paid by insurance or FEMA. Before this happens, Federal and State officials need to accept responsibility for CHOOSING this result, not blame it on an "autopilot" interaction of BFE and "actuarial" premiums subject to FEMA discretion. RAISE THE DUNES - NOT PREMIUMS.
foggyworld February 21, 2013 at 10:48 PM
Just when can homeowners expect to hear the truth of where things stand? I live in a house on 10' pilings that made it through the storm as did several of my neighbors who also were on pilings. Unfortunately the older homes built on the ground level were flooded and most of them are on a Lake - not the ocean or the Bay. Our house on those 10' pilings was hit by water but broke through the breakaway wall as planned and the highest water mark we could find was about a foot. The water went out the vents Fema is now prescribing. In return for building a hurricane prevention house, we hear we need to move our house up from 10' to 12'. Whatever for? It seems to me that this is one big effort to remove the middle class from the western side of Barnegat Bay and I don't belong in Christie's 74% high rating any more because he has given Fema powers that he should have retained himself. But he seems more interested in running for two offices than he is to finding out just how shafted we on his beloved shore are getting. He dumped his own responsibility and power into Fema's lap so he could distance himself from the repercussions that he seems to think he can dodge all the way to 1600 Pennsylvania Avenue. Governor, wake up and get Fema who has never received more than a D+ for its work anywhere out of the picture. Step up to the plate and do the job we are paying you for or we sure won't be voting for you this go round - or the next.
foggyworld February 21, 2013 at 10:50 PM
I'm with you on the dunes but I live in an area where the "beach" is all of 10' deep and the water level averages 3'. I'm not sure if we have room for a dune but sounds fine to me though the wildlife won't like it.


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