DENHAM SPRINGS — Changes in the National Flood Insurance Program threaten a major reduction in property values for many Denham Springs residents who live in flood zones, the city’s building official said Tuesday.
When homes located in flood zones are sold, the new owners may have to pay thousands of dollars more a year in flood insurance than the current owners, Rick Foster told the City Council.
In the case of current owners grandfathered under old insurance rates, new owners may have to pay five or six times as much for flood insurance, he said.
After hearing Foster’s detailed presentation, the council voted unanimously to ask the state’s congressional delegation to seek passage of a new law that would change a federal law on flood insurance passed last year.
The council’s resolution asked that the new law provide for flood insurance rates that can be transferred to new owners.
The resolution also asked for a special enrollment period under which people can purchase flood insurance at the rates charged before the passage last year of the Biggers-Waters Flood Insurance Reform Act.
The resolution also asks that Congress’ latest flood insurance law temporarily suspend the release of all new flood insurance rate maps.
Without such action, many people who purchase property in parts of Denham Springs and other areas may have to pay $6,000 to $9,500 a year for flood insurance that now costs owners of the same homes $1,000 to $1,500 a year, Foster said in an interview after the meeting.
The values of some homes already are dropping by tens of thousands of dollars, Foster told the council.
Older communities with homes built prior to governmental flood-elevation requirements are particularly susceptible to such situations, Foster said.
“It’s going to affect a whole lot of people,” Foster told the council.
“It could create ghost towns all across Louisiana,” Councilwoman Annie Fugler said before making the motion to pass the resolution.