FEMA ‘Disaster Deductible’ Needs Work, NAHB Says

Filed in Codes and Regulations, Home Building by on March 31, 2016 0 Comments

NAHB is asking the Federal Emergency Management Agency (FEMA) to reconsider whether requiring stricter building codes is an effective way to meet a “disaster deductible” that has been proposed as a requirement that states and localities must meet before being eligible to apply for federal disaster relief assistance.

In a January notice, FEMA said its rationale for instituting the disaster deductible is this: Under the Stafford Act, local governments are typically reimbursed for 75% of eligible clean-up costs beginning at $1 million in assessed damages. FEMA believes the Stafford Act is skewed too heavily to federal aid, while state and local governments need not demonstrate sufficient pre-disaster preparedness.

FEMA’s proposal suggests that governments can demonstrate they have met such a disaster deductible in several ways, including creation of a self-insurance fund, adoption a disaster relief fund at the state or local level, or adoption of stricter building codes.

NAHB comments took issue with FEMA’s suggestion that local governments could demonstrate they met this disaster deductible requirement by simply adopting stricter building codes. FEMA ignores underlying questions of statutory authority, a distinct disconnect between those impacted by the costs of adopting stricter building codes and those benefited by access to the Stafford Act funding accessible via meeting the disaster deductible, and basic structural hurdles of trying to use stricter building code adoption as a proxy for meeting the disaster deductible concept.

“NAHB supports FEMA’s efforts to take proactive steps to increase the nation’s readiness and capacity to respond to catastrophic disasters,” but serious questions and concerns remain concerning the proposal, the association wrote in its comments March 21

NAHB emphasized that issues concerning FEMA inappropriately limiting the credit options under the proposal and wrongly targeted building codes as a means to satisfy the deductible requirement.  NAHB called on FEMA to reevaluate the design of the disaster deductible proposal should it decide to proceed with this rulemaking.  NAHB staff will monitor FEMA’s actions on this proposal over upcoming months. For additional information, contact Tamra Spielvogel at 800-368-5242 x8237.

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