CLEARWATER, Fla. – Oct. 3, 2013 – The government shutdown wasn’t the biggest grievance against Congress voiced by Gov. Rick Scott and a group of state and local leaders here Tuesday.
A throng of homeowners, real estate agents and city officials who met outside the Pinellas Realtor Organization’s building expressed shock and anger that officials in Washington had failed to stop massive flood insurance hikes that just went into effect.
Collin Elston, a retiree who recently bought a house in Treasure Island, said he expected foreclosure as his original $2,000 flood insurance bill likely will climb to $12,000 a year.
“This is our dream retirement home; it’s now turned into a nightmare,” the 71-year-old said.
About two-thirds of the 33,000 single-family homes designated for rate increases aren’t on waterfront lots, Pinellas County Property Appraiser Pam Dubov said. Many of the houses are modest – in the $130,000 range – and 1,100 of their owners are low-income seniors, she said.
In Washington on Tuesday, Senators Bill Nelson and Marco Rubio joined a group of their colleagues who have vowed to stop or delay the Biggert-Waters flood insurance reform, but there was no mention of a forthcoming vote.
Most of their constituents in Clearwater faulted both political parties for the budget gridlock that has overshadowed a vote on flood insurance reform.
The governor, though, placed the blame on one person.
“President Obama is failing Floridians,” Scott said. “I’m here to call on the president to take immediate action to deal with the flood insurance program that’s going to devastate our real estate market right here.”
St. Petersburg Mayor Bill Foster, who followed Scott in speaking at Tuesday’s gathering in Clearwater, said Republicans and Democrats both failed to press the “pause button” in time.
The 29 members of the Florida delegation neglected to make the issue a priority, he said, drawing cheers from the crowd of several hundred people.
Clearwater Mayor George Cretekos, who leads the Barrier Islands Government Council, noted that U.S. Reps. Bill Young, Kathy Castor and Gus Bilirakis voted for legislation that would delay rate hikes for a year. The Senate has not voted on the matter.
Biggert-Waters was passed in 2012 with the goal of mending a deficit of more than $20 billion in the National Flood Insurance Program. The bill calls for the removal of so-called subsidies that have kept rates low for older homes in high-risk areas built prior to accurate flood maps. Many of the rate increases took effect during the past year, including a measure that drives premiums up to their full risk rate when a home is sold – above $20,000 a year in extreme cases.
On Tuesday, rate hikes for businesses, repetitive flood loss properties and many homes went into effect.
U.S. senators from Florida, Louisiana and other hard-hit states held a news conference Wednesday promising to stop the increases until the Federal Emergency Management Agency finds a way to make the program affordable for struggling homeowners.
“This is about people. This is not just about some government program,” Rubio said.
The Republican senator has stopped short of saying whether he would vote in favor of specific legislation to stop or delay flood insurance reform. There still is debate in the Senate about different bills and no consensus on whether delays should be for one year, two years or more, and what types of properties should be exempt.
Nelson, a Democrat, has sponsored legislation to delay Biggert-Waters and said implementation should be delayed for a year at least until FEMA completes a mandated affordability study.
“The obvious solution right now is to have a delay of at least one year until the affordability study comes out,” he said.
In Florida, state and local officials are looking for ways to mitigate the financial hardship of the bill. Some have suggested creating a state flood insurance program or even pursuing a lawsuit against the federal government.
Attorney General Pam Bondi released a statement saying the matter could be resolved fully only by Congress, but her office is consulting with the state’s Office of Insurance Regulation to see if there is any other recourse.
Scott deflected media questions about ways the state could solve the issue, repeating his criticism of Obama’s leadership on both the budget and flood insurance issues.
Elston, the Treasure Island retiree, said he and thousands of homeowners throughout the state might be forced out of their homes if Congress doesn’t act. He bought a home with his wife in June with the expectation of a $2,000 annual premium, unaware of the flood reform situation. With a home at five feet below base flood elevation, Elston expects his rates to increase six-fold the next time he renews – much more than his Social Security and retirement funds can handle.
“We are faced after three months in the house with looking at – unless something happens with the government – we are looking at foreclosure within a year or so,” he said.