Gretna — Many Jefferson Parish property owners are seeing sharp increases in their flood insurance rates this year thanks to a new federal law, and those hikes will continue despite flood protection designed to make the community safer.
Increases to flood insurance rates were the focus of a lengthy discussion at a Jefferson Parish Council meeting last month after the board received an update on the creation of new flood insurance rate maps for the area. Those maps establish the new flood zones in the parish and create the “base flood elevations” that will guide construction and permitting in the future. Their final adoption is not expected until 2014.
Due to the rash of projects completed through the U.S. Army Corps of Engineers Hurricane and Storm Damage Risk Reduction system, parish officials expect the new guidelines to benefit residents in Jefferson Parish. The parish received a huge update to its flood protection, and that should mean lower rates.
“I think in most places in Jefferson Parish, we’re likely to see a benefit,” Council Chairman Chris Roberts said.
But that good fortune won’t extend to everyone in the parish. The part of FEMA Region Six Natural Hazards Program Specialist David Hiegel’s presentation that generated the most interest was his reminder that due to the Biggert-Waters Flood Insurance Reform Act, some property owners can expect to see annual flood insurance increases of 25 percent for the next few years.
Those spikes will typically hit residents in the parish’s most flood-prone communities, Hiegel said.
Previously flood insurance rates were subsidized through a process called “grandfathering,” and those subsidized rates could be applied to hunting and fishing camps as well as primary residences.
In addition, when homeowners sold their homes, they could pass along those subsidies to the new owners.
That practice will eventually disappear under the new guidelines passed by Congress, Hiegel said. Premium subsidies are only available for primary residences, which are properties inhabited by a homeowner for 80 percent of the year. Subsidies will end for commercial properties, those properties with a history of severe losses due to flooding and those properties where a cumulative total of all flooding losses exceeds the market value of the home, he said.
Property owners will see their premiums increase by 25 percent annually until they are in line with the fair market rate, Hiegel said.
“Those subsidizing ratings will be going away across the country,” he said.
That could have a big impact on communities like Lafitte, Barataria, Crown Point and Grand Isle. Not only are those areas plagued by flooding, but they also have many of the parish’s seasonal homes. Without flood insurance subsidies, it isn’t feasible for many people to maintain insurance on their hunting or fishing camps, Roberts noted. It could also mean higher rents at rental properties.
“You’re going to have a lot of rental properties, tenants and landowners, who are impacted by this,” said Roberts, who joined with Parish President John Young in asking for separate meetings in Grand Isle. “I don’t want to blindside camp owners and people who own property in these communities. … The whole idea is you don’t want sticker shock when you get the bill in the mail.”
But the impact of the new rules isn’t just confined to those areas. Residents throughout the parish who live in areas with flooding issues are noticing higher bills, said Paula Blackwell, Jefferson Parish’s floodplain manager.
Blackwell said her office has been receiving calls from residents in communities like University City in Kenner about the costs, but she doesn’t have much help to offer them. Communities throughout the country are adopting resolutions in opposition to the plan, and Hiegel said that if Jefferson Parish politicians have problems they could consider a similar route.
“It’s a very serious issue,” Blackwell said.