Congressman McNerney Calls On FEMA To Make Flood Insurance Premiums Affordable For Smith Canal Area

Washington, D.C. – This week, Congressman Jerry McNerney (D-Stockton) wrote the Federal Emergency Management Agency (FEMA) to request that residents of the Smith Canal area in Stockton, Calif., be considered for a new category of flood insurance.  Areas that have made progress in improvements and/or reconstruction are eligible for this designation.  Congressman McNerney also called on FEMA to work in partnership with the local flood protection entity, the San Joaquin Area Flood Control Agency, to determine this status for the Smith Canal area.

 

“In San Joaquin County, we know how vital flood insurance and protection are to our homes and communities.  However, the premiums people pay should accurately reflect the risk they face of incurring flood damage to their properties.  In the Smith Canal area, progress has been made, and FEMA should recognize that,” said Congressman McNerney. 

 

The Smith Canal area was mapped into a Special Flood Hazard Area in October 2009, and property owners were given the opportunity to purchase a Preferred Rate Policy (PRP), which is approximately $450 per year. Unfortunately, some property owners were late to take out a PRP or allowed their policy to lapse and are now subject to pay full rate premiums.  Additionally, policies for some property owners have begun to increase because of the requirements that eliminated subsidized rates for non-primary residences, commercial properties, and substantially damaged or renovated properties.

 

“Flood insurance premiums are scheduled to increase and it is apparent that in the near future flood insurance premiums will be beyond many property owners’ ability to pay.  Furthermore, the prospect of increased rates has caused decreased property values, contributing to the ongoing struggle in the local housing market.  FEMA needs to recognize the local effort to improve the level of flood protection in the Smith Canal area, saving homeowners an unjustified increase in their flood insurance,” said McNerney.

 

 

 

 

November 13, 2013

 

 

The Honorable W. Doug Fugate

Administrator

Federal Emergency Management Agency

500 C Street SW

Washington, DC 20472

 

Dear Administrator Fugate:

 

I would like to call your attention to 42 U.S.C. § 4014, as modified by the Biggert-Waters Act (P.L. 112-141). Section 4014(e) authorizes a new category of flood insurance for people residing in communities that have made adequate progress on the reconstruction or improvement of a flood protection system. I believe that the Smith Canal area located in Stockton, CA may qualify for this category of insurance, and I urge your agency to work with the non-federal sponsor, San Joaquin Area Flood Control Agency, to determine its eligibility.

 

The Smith Canal area was mapped into a Special Flood Hazard Area in October 2009, and property owners were given the opportunity to purchase a Preferred Rate Policy (PRP), which is approximately $450 per year. Due in part to Biggert-Waters, some property owners were late to take out a PRP or allowed their policy to lapse and are now subject to pay full rate premiums.  Additionally policies for some property owners have begun to increase due to Biggert-Waters because of the requirements in Section 100205 that eliminated subsidized rates for non-primary residences starting January 1, 2013, commercial properties, and substantially damaged or improved properties after October 1, 2013.

 

Currently within the City of Stockton and unincorporated San Joaquin County, there are more than 5,000 homes in the Federal Emergency Management Agency (FEMA) 100-year floodplain.  This area is protected by levees that no longer meet the criteria needed to provide 100-year protection under FEMAs requirements. To address this issue, the community and the State of California partnered to pay for a project that restores a 100-year level of protection for Smith Canal residents. The cost is estimated at $36 million for a project that will provide a flood protection system to an area that has never flooded. 

 

Flood insurance premiums are scheduled to increase, and it is apparent that in the near future flood insurance premiums will be beyond many property owners’ ability to pay. Even homeowners who do not have a mortgage and are not required to purchase flood insurance are being impacted by Biggert-Waters flood insurance rates. If a property owner wants to sell their home and the buyer takes out a mortgage, the buyer will be subject to the actuarial insurance rate. The prospect of such high rates have devalued properties and impacted the ability to sell.

42 U.S.C. § 4104(e) reflects Congress’s recognition of the commitment made by local communities to expedite completion of a flood control project that will restore 100-year protection, can help ensure the marketability of existing properties, and provides equal consideration to all property owners who pay the assessment to rebuild the levee system. The Smith Canal area of Stockton can meet the requirements of Section 4104(e), ensuring that improvements will be completed within five years and providing equitable and affordable flood insurance premiums for property owners who have committed the funds to construct a project at no cost to the federal government.

 

I look forward to working with you and the San Joaquin Area Flood Control Agency to address this issue, and I thank you for your attention to this urgent matter.

 

 

Sincerely,

 

 

 

Jerry McNerney

Member of Congress