NAHB Opposes OMB Proposal to Reform National Flood Insurance Program

Filed in Capitol Hill by on October 5, 2017 4 Comments

The Office of Management and Budget Director Mick Mulvaney yesterday submitted a proposal to congressional leaders to reform the National Flood Insurance Program. NAHB Chairman Granger MacDonald issued the following statement regarding the proposal:

“While NAHB supports reforms to the National Flood Insurance Program (NFIP) that will keep the program fiscally sound and preserve rate affordability, we strongly oppose the new proposal by OMB Director Mulvaney to phase out new NFIP policies for newly-constructed homes. It would simply prevent home builders from being able to provide safe and affordable housing to consumers. By creating uncertainty in the housing market, this proposal would also harm local communities and impair economic growth.

“New homes are built to more stringent safety standards and usually fare much better than the older housing stock in flooding disasters. Moreover, new construction policyholders pay full-risk rates, so they put more into the NFIP than they take out in claims. Why does OMB needlessly propose to penalize new construction? It would only hurt the fiscal soundness of the NFIP and fail to ease taxpayer burdens.

“NAHB will continue to work with Congress and the administration to achieve needed reforms to the NFIP that will ensure it remains efficient and effective in protecting property owners, creates more stability in the housing market, and improves the financial viability of the program.”

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Comments (4)

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  1. Ken Boynton says:

    In addition to new housing , could NAHB have discussions on second home flood insurance. Our second home which is beachside in Connecticut has gone up to $9000.00 dollars for $250k of flood insurance. For the first time we have had to drop flood insurance. Before flood insurance was redone a few years ago it remained affordable ? This effects housing because lenders require flood insurance on loans and with rates like this will slow and limit buyers to properties for second homes.

  2. A large percentage of Americans live in areas subject to hurricanes, floods, tidal waves, tropical storms, dams that may break and whatever. NFIP, I worked for USDHUD / Disaster Assistance Agency predecessor to FEMA. At that time we and the US Core of Engineers compiled information that insurance companies could use as the NFIP. It rolled out at $25 per month in 1973. The rates have had a rapid increase while resistance to paying claims has also increased.
    More Americans live in areas near water than ever. North Carolina Outer Banks (OBX) seems to have the best solution homes built on piers designed to clear tidal surge flooding. One of my brothers has two homes on the Russian River in Forestville, CA. The homes are on top of an 11′ lover level not used for living space. Builders solved the problem because people wanted to have a home on the beach or river. We still need affordable NFIP as we improve.

  3. Dante Archangeli says:

    Even though NAHB’s position might be economically advantageous for some builders, it does not make economic sense for the nation overall.

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