In March 1995, FEMA came up with the following maximum amounts of coverage for flood insurance:
- $250,000.00 for residential property structures and $100,000.00 for contents.
- $500,000.00 for nonresidential structures and $500,000.00 for contents
In September 1995, the average price for homes in Suffolk, Nassau and Queens was $155,000.00 (according to the Long Island Board of Realtors MLS).
In September 2012, the average price for homes in Suffolk, Nassau and Queens was $355,000.00 (according to the Long Island Board of Realtors MLS).
In the 17 years that the FEMA flood insurance maximums have been in effect, the price of homes on Long Island have increased 129.03%, without FEMA increasing the amount of available flood insurance.
FEMA Disaster Assistance Recoupment Fairness Act:
In December 2011, the FEMA Disaster Assistance Recoupment Fairness Act was enacted, which gave FEMA the legal authority to waive certain debts for disaster survivors who received improper payments, these funds, could have been used to “shore up” (no pun intended) FEMA’s cash reserves.
Further points to consider;
- In the Federal Register dated January 25, 2007, the Office of Management and Budget (OMB), published a final Bulletin entitled, “Agency Good Guidance Practices”, which established policies and procedures for the development, issuance, and use of significant guidance documents by Executive Branch departments and agencies. FEMA failed in this regard.
- Within FEMA exists the Policy Division whose mission “is to lead and coordinate development of policies that support effective and efficient delivery of Agency programs across the full spectrum of preparedness and emergency management, and represent agency interests in departmental, national and international policy making. This division failed to meet their mission.
- Within FEMA exists the Strategic Planning & Analysis (SP&A) Division whose mission is to “help the agency make innovative and informed decisions about FEMA’s long-term direction and to facilitate integrated strategic planning, analysis, and decision making”. This division failed to meet their mission.
- Within FEMA exists the Program Analysis & Evaluation (PA&E) Division whose mission is to “give the agency an independent analysis and evaluation capability that enhances decision making, program performance transparency, and accountability”. This division failed to meet their mission.
- FEMA’s May 2011 Strategic Foresight Initiative failed to address home value increase.
- FEMA’s February 2012 Strategic Foresight Initiative failed to address home value increase.
- In FEMA’s “demography paper” dated May 1, 2011, it stated “The population along the Atlantic, Pacific and Gulf coasts grew from 47 million in 1960 to 87 million. The level of overall coastal population growth since 1980 is similar to the rest of the nation. However, the limited space for development in coastal areas results in greater population density. Excluding Alaska, non-coastal counties average 98 persons per square mile while coastal counties average 300 persons per square mile. The most populated coastal county in the nation, New York County, NY (Manhattan), contains almost 72,000 per square mile.
1995 vs. 2012
- The director of the Federal Emergency Management Agency (FEMA) had a level II salary of $133,600.00 in 1995 and now has a $179,700.00 in 2012 (an increase of 34.51%).
- Price of gas went from $1.35 per gallon to $3.44 per gallon an increase of 154.81%
- Congressman salary went from $133,600.00 per year to $174,000.00 an increase of 30.24%
- The President’s salary went from $200,000.00 per year to $400,000.00 an increase of 100%
- The DOW went from 5,117.12 to 12,217.56 an increase of 138.76%
- A loaf of bread went from $1.35 to $1.88 and increase of 39.26%
- Available Flood Insurance for a private home through FEMA was $250,000.00, and is now $250,000.00, and increase of ZERO!
- FEMA cannot afford the larger policy limits: Yes they can, as they would have been collection higher premiums which would have increased their cash reserves.
- Nationwide home prices have not increased as fast as the New York/New Jersey Region: True, therefore people in those regions would not be taking out policy’s with the higher limits.
On July 6, 2012, the President signed into law the Biggert-Waters Flood Insurance reform and Modernization Act of 2012 although at that time the insurance available Flood Insurance through FEMA was not increased, someone realized how inadequate the $250,000.00 was.
The Biggert-Waters Flood Insurance reform and Modernization Act of 2012 required the Government Accountability Office to: “submit a report to Congress on: (1) the number of flood insurance policy holders currently insured; (2) the increased losses the NFIP would have sustained during the 2004 and 2005 hurricane seasons if the program had insured all policyholders up to $417,000; (3) the availability in the private marketplace of flood insurance coverage in the amounts that exceed the current coverage limits; and (4) the effect of either raising the current limits of coverage amounts or reducing the current limits of coverage on the ability of private insurers to provide sufficient flood insurance coverage to effectively replace the current level of flood insurance being offered under the NFIP).
In short, due to the Governments, specifically FEMA, failure to act for 17 years, to increase the amount of available flood insurance, the communities hit by Hurricane Sandy will soon begin to get hit again and again by the ever rising tide of homes that homeowners cannot afford to rebuild, homeowners that will lose their homes to foreclosure, banks that will suffer through another mortgage crisis due to the ever increasing numbers of loans that will that will go into default, local villages and towns that will see their tax revenues decrease due to the vacant properties and decreased values of the real estate in their municipalities. Homeowners, that were initially spared Sandy’s wrath, will now be hit by the remnants of the “Frankenstorm” as they see their home values drop due to the increasing amount of vacant and destroyed homes in their neighborhood. A drop in value that could cause many of these homeowners to become “upside-down” in their mortgage.
Just as Congress passed the FEMA Disaster Assistance Recoupment Fairness Act which gave FEMA the legal authority to waive certain debts for disaster survivors who received improper payments for disasters that occurred between August 28, 2005 through December 31, 2012, Congress, can, should and MUST pass a bill that would enable those home and business owners in New York and New Jersey, who already had the maximum coverage offered by FEMA, and did not have private insurance coverage to apply for and if the meet the present standards for coverage under the lower limits, to receive payments up to the $417,000.00 amount as stated in the Biggert-Waters Flood Insurance reform and Modernization Act of 2012.
Just as a side note, I suffered NO DAMAGE to speak of from Sandy, and neither did any relatives of mine. We were all very lucky.
In the two plus weeks that I walked around the Town of Islip helping the Emergency Management Department, and the days since that I spend in the Town of Babylon, I saw the devastation first hand. This is my town, my community and my state, that’s why I did all the above research and will help you in any way possible to fix this problem before Long Island, New York State and New Jersey fall off the cliff.