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Elevating Homes After Sandy: 'Wait-and-See Approach Is Prudent'

For owners of homes not substantially damaged by the storm, waiting for final flood maps and flood insurance rates could help in making decision.

With a flood map still in flux and flood insurance premium increases still not set, property owners may have too little information to make an informed decision on whether to rebuild their homes at a higher elevation, according to state officials and local insurance agents.

Record flooding from Superstorm Sandy on Oct. 29 caused billions of dollars worth of damage to the coastlines of New Jersey and New York, and in the aftermath of the storm, many owners are wondering if they will be required to elevate their homes.

This much is known: Emergency rules adopted by New Jersey on Jan. 24 require new and substantially reconstructed (where the cost of restoration equals or exceeds 50 percent of the market value of the structure before the damage occurred) buildings to be elevated in accordance with a temporary Advisory Base Flood Elevation (ABFE) map.  

The rest of Ocean City's homeowners face a decision based on:

  • Where their property falls on the new map: The Federal Emergency Management Agency (FEMA) released the advisory map last month. It recommends elevations at which a property can survive a 100-year storm with relatively minor damage. It also maps Velocity Zones (V Zones), where properties could sustain damage from storm waves of at least three feet on top of flood waters. Recommended elevations in V Zones are higher. 
  • Whether their flood-insurance premiums will increase dramatically: Shore property owners rely on the government's National Flood Insurance Program (NFIP), which has been billions of dollars in debt since Hurricane Katrina in 2005 and is subsidized by U.S. taxpayers. Legislation approved last year would eliminate taxpayer subsidies and make the program self-sustaining. That means potentially dramatic premium increases for the riskiest policy holders — owners whose properties fall below the base flood elevation on the new FEMA maps.
  • How much it will cost to elevate a home: Estimates have varied wildly in the aftermath of the storm.

The problem for homeowners is that all the factors are still variable.

The "advisory" ABFE maps do not yet take into consideration mitigating factors such as dunes, bulkheads and buildings. Some properties could be moved out of V Zones when new versions of the advisory maps are released in late summer and early fall. Preliminary maps for Atlantic County are due in September and for Cape May County in October. At that point, property owners will have the option to appeal before a final version of the maps is approved. 

Flood-insurance premium increases for most property owners have not yet taken effect either. FEMA has warned that the potential increases could be significant as the program moves toward a full actuarial basis, particularly for homes below base flood elevation.

But the only rate increases effective as of January 1, 2013, are for "pre-FIRM" construction (built before Dec. 31, 1974) for nonresident property owners (these increases are 25 percent).

More rate increases won't be effective until Aug. 1, when insurance premiums are likely to go up 25 percent annually for property owners until the flood-insurance program is self-sustaining. Properties far below base flood elevation could pay more than $30,000 annually, while properties that exceed the recommendations could pay less than $3,000.

"People are getting very upset over a lot of possibilities and a lot of unknown," said Michael McMahon of Ocean City's McMahon Agency. "We believe a wait-and-see approach is prudent. Unless you are in the design process of a new home or are required to elevate your home due to substantial damage from Sandy, the ABFE maps have no bearing on you at this time."

McMahon said that if property owners are not forced to elevate because of the 50-percent rule, they could benefit from having more information before making the decision.

__________

Read "FLOOD ELEVATION FAQs: New Jersey's Emergency Flood Elevation Rule" (or click on the attached PDF)

See "Guide to Making the Call on Elevating Your Ocean City Property."
__________ 

Anybody who holds a mortgage on a home in a flood zone is required to carry flood insurance. Buyers of properties in flood zones likely will have to pay the full actuarial flood-insurance rates and won't enjoy the same stepped 25-percent increases as existing policy holders when the changes become effective in August 2013.

"If your property was not substantially damaged, you do not need to take any action now," the state Department of Environmental Protection writes in a FAQ document (see links above) released this week.

"FEMA anticipates some changes to these maps (the ABFE flood maps) for both elevations and zones," the DEP writes. "The ABFEs currently reflect the most accurate modeling, topographic maps and scientific data available. FEMA plans to release updated flood maps over the next six to seven months, which will further fine-tune coastal flood elevations. The regulatory process to finalize the maps could take up to two years."

"Your rates could increase when FEMA adopts its final flood maps," the DEP writes. "If you do not meet its elevation standards, which are likely to be close to the ABFES, your rates could increase even more significantly."

The FAQ from the DEP also echoes what Gov. Chris Christie has been announcing this week — that the state will work to facilitate grants to help provide additional funding for homeowners to elevate their homes:

"FEMA can provide up to $30,000 to cover the Increased Cost of Compliance (ICC) with federal, state and local regulations if you have federal flood insurance. In addition, the Christie Administration intends to provide grants to homeowners with substantially damaged homes to help them offset some of the costs of elevation, mitigation and renovation, and intends to announce in the spring the mechanism for such grants. In order to access any additional funding, FEMA requires property owners reconstruct using the best available data."

The state says that even if homes are substantially damaged (requiring elevation), homeowners can live in the structures for up to four years if they take temporary measures to make homes habitable pending elevation.

walt hays February 08, 2013 at 12:37 PM
Finally, a voice of reason-"People are getting very upset over a lot of possibilities and a lot of unknown," said Michael McMahon of Ocean City's McMahon Agency. "We believe a wait-and-see approach is prudent. Unless you are in the design process of a new home or are required to elevate your home due to substantial damage from Sandy, the ABFE maps have no bearing on you at this time." Thanks MICHAEL!
Sam February 08, 2013 at 02:15 PM
So sorry but Every time I see that 30,000 quoted as my flood insurance rate I get upset very very upset!
nancy neal February 08, 2013 at 02:28 PM
Michael, This is very good post. Hopefully people will feel relieved and have a better understanding. Your postived response is welcoming.Thank You
anonymous February 08, 2013 at 02:43 PM
While we wait and see, let us try to think outside of the box on all of the possibilities that confront our future as barrier island property owners. The scariest thing we can do is react to the impetuous decisions of politicians and profiteers. We need to document, brainstorm and then somehow share all of our thoughts and ideas with each other and for now decide the best way to publish an ongoing dialogue throughout the state. Between the lines of pure emotional panic on the subject thus far, there are some very good questions and thoughts. I just thought this morning outside of the box....why not abandon our first floors and build up? perhaps something on the order of the great wall of China? whatever we all decide, let us make sure that all are informed with input and choice. Another thought...maybe we have 100 years to decide!
Newell138 February 08, 2013 at 03:46 PM
well something has to be done, I have written letters to Lobiondo, both state senators and Christie. Unless they want the residents of OC and other shore communities to end up like this: http://news.yahoo.com/poor-cages-show-dark-side-142611366.html something will have to change.
archie struthers February 08, 2013 at 03:59 PM
Michael re-stated some excellent advice. Don't panic and get as much information from the city, engineer or a realtor you trust. I think Christie tried to move fast with the heights for the right reason, as the sooner it gets codified the better. This really doesn't help someone who needs to rebuild now , and has a moving target to deal with. It's really difficult for some businesses who have to deal with ADA issues with any raise in height or addition of steps for ingress and egress to their building. Don't see how WaWa in either OC or Margate can address this problem, and may be part of the problem with their rebuild. We all need to examine all the issues , but a long drawn out process puts those in most need at risk.
FR Eedom February 08, 2013 at 04:34 PM
I have a simple question... Or what? Other than higher insurance costs-which only effects those who have mortgages because anyone else can simply opt to not have flood insurance... What are the consequences of not elevating an older home that has had more than 50% of its value damaged?
MDBJ February 08, 2013 at 06:00 PM
I'm so confused as to the basis for the rates "It recommends elevations at which a property can survive a 100-year storm with relatively minor damage." and " while properties that exceed the recommendations could pay less than $3,000" Ok: if my property "exceeds the recommendation" I could pay less than $3,000 for a policy that pays out a maximum of 250,000 -- when the 1 in 100 year event should cause "relatively minor damage" for where I am at. To me, relatively minor damage is certainly less than $10,000 worth of damage. Is this right? IF I get my home to a location that will cause less than $10,000 worth of claims every hundred years, the premiums will only be $3,000 per year. and it's mandatory
MDBJ February 08, 2013 at 06:04 PM
Wawa has limited numbers of crews... the customers of 12th st can be served by 34th, the customers of Margate can be served by Ventor Crews were perhaps in locations without adjacent stores first. If I was Wawa, and Sea Isle was knocked out (only 1 Wawa) and 1 of 2 Ocean City stores were knocked out.. guess which one I'd take care of first.....
Newell138 February 08, 2013 at 06:46 PM
someone has to pay for Katrina I guess. My insurance company says it will cost 300K to replace my house, so if my premium is 30K that means I am paying for the cost of my house every 10 years for a 100 year storm. Thats a pretty nice profit for the flood insurance program.
DSA February 08, 2013 at 07:40 PM
gimme a break
Ellen February 08, 2013 at 09:43 PM
What am I missing here? Why is my flood insurance only $600 a year?
Parker Miller February 08, 2013 at 10:32 PM
I understand that the flood insurance fund is billions of dollars in the red because of Katrina, hurricanes in Florida and the Carolinas outter banks, and flooding in the midwest. New Orleans is built below or at sea level. Is FEMA forcing buildings to be raised there and threatening high flood insurance rates? Or is the federal gov't building levees at its expense to protect New Orleans? Are the buildings in Florida that have lost their roofs forced to rebuild with hurricane resistant roofs? Are the buildings along the Mississippi that floods every 3 years forced to elevate or move? Where are our two US Senators? I've heard nothing of what they're doing about the Sandy damage. New Jersey gets back less from the federal gov't than any other state. It's about 65 cents back for every $1.00 sent to Washington. Billions are spent subsidizing everything from failed solar panel companies to foriegn governments, except NJ.
Elayna C February 09, 2013 at 12:18 AM
I was at a FEMA meeting last night and I spent hours talking to them. It does not matter if you were substantially damaged or not, you still have to elevate your home if you are below the Elevation rate that is on the new maps. The substantial damage only applies to getting the ICC money of $30K. Everyone with a mortgage, has to have flood insurance. Everyone with flood insurance will have to comply with the new regulations or face huge increases. This was made clear last night at the Seaside Heights FEMA meeting.
Elayna C February 09, 2013 at 12:20 AM
Consider yourself lucky. Mine was always almost 2K per year and my renewal now has me at just over 2K
jlf February 09, 2013 at 02:12 PM
I have lived on this island for about 30 years as a year round resident, I paid for flood insurance all of these years and it was never used. Now that claims have come in the insurance companies are upset, but isn't that the name of the game with insurance?
Elayna C February 09, 2013 at 03:04 PM
Exactly jlf. Also, we signed mortgage papers, if we have a mortgage, agreeing on specific terms and payments. We did this with the knowledge that we have purchased and are willing to pay back what we know we can afford. We understood that along with this come property taxes, which will raise, but at a normal rate throughout our lifetimes, and insurance, which will be the same. We did not sign up for mandatory payments that will equal more than our mortgages as time goes on. We also did not sign up for having to shell out also the same as our total mortgage to make a change to the property we purchased. We are all tax paying, law abiding citizens who contribute to the economy by paying our fair share. It seems that what is happening to us is illegal.
Clueless February 11, 2013 at 01:47 AM
PARKER MILLER - Welcome to the ranks of the 47%ers - loving himself some federal commy socialist money!!!
GEO February 12, 2013 at 07:03 PM
I met with an engineer this week about having my house elevated because it was substantially damaged. After looking at all the options, he says the house will have to be lifted an additional 8’ making it 11’ above the sidewalk with a total elevation of 15’. That’s 11’ for the new ABFE, plus 2’ for OC’s BFE+2 ordinance,1’ for the new stringers that will support the house, and another 1’ because I’m now in a “V” zone, the elevation is measure to the bottom of the joist and the joist are about 1’ thick. That raises my first floor to the exact height of my second floor. So, I asked if it would be possible to abandon the first floor, add helical posts to support the second floor, and build a new second floor. He didn’t think it was because the first floor of a “V” zone has to be designed to break away. So, either way, I’m going to have to climb 15 stairs just to get to my front door. It doesn’t seem right. Does anyone else have that many stairs?
Eric Sauder February 12, 2013 at 09:55 PM
I'm just curious but did he say how he could get 15 stairs in between the sidewalk and your entry way? Will you be allowed to extend your stairs towards the sidewalk? I suppose you would need a variance for that. When you put it all into practice it just doesn't seem practicable does it? I feel for ya.
Jack Geisler February 13, 2013 at 02:02 AM
My sisters new house will be 17 steps. My 1995 duplex is only 15 steps to the 1st floor.

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