全球智库信息集成服务系统

Key Findings

1. The cost of flood insurance is currently burdensome for about one-quarter of households in owner-occupied one- to four-family residences in the study area and is much more burdensome for lower-income residents.
2. Removing grandfathering — the ability to base premiums on previous flood zones and elevations when flood maps are updated — dramatically increases premiums for all one- to four-family properties when maps are revised to reflect increasing risk.
3. Such premium increases are projected to reduce property values and property tax revenue from what they would have been had premiums not increased; conversely, premium increases are projected to increase loan defaults and the percentage of households for which flood insurance is burdensome from what they would have been otherwise.
4. There are promising financial-assistance options that use means-tested eligibility criteria rather than general subsidies.
5. Grants and low-interest loans are not particularly attractive given the current rate structure and flood maps but become much more attractive when maps are revised to reflect increasing risk and when pre-FIRM rates and grandfathering are eliminated.
6. Government costs can be significantly lower with an option that combines an income-based subsidy with mitigation, but only under certain conditions.
7. Moving forward on any option requires answering a number of questions.

Hurricane Sandy struck New York City on October 29, 2012, with devastating consequences — highlighting the importance of programs and policies that promote greater resilience. Flood insurance is an important part of this resilience strategy, but as in other parts of the country, coverage is inconsistent among one- to four-family properties in New York City and is difficult for some households to afford. Compounding this challenge is congressional direction to phase out certain long-standing subsidies in the National Flood Insurance Program (NFIP), the primary source of flood insurance for one- to four-family properties nationwide. Additionally, increasing risk from flooding and the resultant ongoing efforts to update the city's flood maps will likely result in higher flood insurance premiums for many households.