Congressman Joe Garcia has sent FEMA a letter expressing his "deep concerns regarding impending rate increases under the National Flood Insurance Program."
U.S. Rep. Garcia, D-South Florida, is one of several federal lawmakers pushing two pieces of legislation to postpone significant rate hikes for federally subsidized flood insurance for places such as the Florida Keys. The new rates are set to start in September.
The bills are still working their way through the House of Representatives and Senate.
"I am worried that these steep rate increases will be a significant burden to hardworking lower-income home-owners, especially given the challenging economic climate facing many communities," Garcia said.
He and Monroe County Commissioner Heather Carruthers held a teleconference with media Wednesday to discuss how to possibly delay the rate hikes.
"It's going to have a huge impact for us," Garcia said. "It's going to be an ongoing problem that we are going to find a solution for."
Garcia wants the rate hikes delayed so the government can study the financial impacts. He is "troubled by FEMA's failure to complete two studies mandated under the Biggert-Waters law," he wrote Federal Emergency Management Agency Administrator Craig Fugate. The federal law, approved in 2010, established the rate increases.
The first study -- which was supposed to be done by April -- would examine how to encourage participation in the National Flood Insurance Program and how to educate consumers on both the program and their flood risks, Garcia wrote Fugate.
The second study would examine the affordability of National Flood Insurance Program premiums, the effects of increasing premiums for low-income homeowners, and how FEMA might make the premiums more affordable, Garcia said.
Owners of primary residences will be able to keep their subsidized rates until they sell their home, which means the new owners will be hit with the rate hike. Garcia said he is concerned about the chilling effect that will have on Florida's fragile real estate market.
Insurance executive Mel Montagne, who has been reviewing the rate increases on behalf of FIRM (Fair Insurance Rates in Monroe), said rate hikes on existing policyholders' primary homes probably won't happen for another five years.
But 25 percent annual increases will be in effect immediately for new policyholders, secondary and commercial property owners, he said.
They're not just one-time hikes, but annual increases set to occur until the rates reach what FEMA has determined to be actuarially sound levels.
A house insured for $200,000, plus $80,000 in contents, that is a foot below base flood elevation and costs $2,235 in flood insurance today would cost $5,623 in flood insurance under Biggert-Waters -- or nearly $500 a month in flood insurance alone, Carruthers said.
That same house, if it were 10 feet below base flood elevation and cost $2,235 in flood insurance now, would cost more than $25,000 under Biggert-Waters, she said.
On Wednesday, Garcia credited Carruthers and FIRM for their work fighting both windstorm and flood insurance rate increases.
The proposed rate hikes come at a time when Monroe County government officials are asking FEMA for rate reductions.
County and FEMA officials met in Washington, D.C., in June and discussed the possibility of Monroe County applying for re-entry into the National Flood Plain Management Community Rating System (CRS).
The voluntary incentive program recognizes and encourages "community flood-plain management activities," said county Growth Management Director Christine Hurley. Those would include such things as, for example, enforcing the downstairs enclosure ban.
In exchange, flood insurance rates are discounted.
The county previously participated in the program, but left in the 1990s after FEMA officials criticized it for not doing enough to deter the proliferation of illegal downstairs enclosures, county officials said.
Monroe County was first enrolled in the CRS on Oct. 1, 1991, which provided policyholders a 5 percent discount on flood insurance premiums. The county left the program on May 1, 1997.