Congress Moving on Re-authorization and Reform of National Flood Insurance Program

Just in time for Thanksgiving, the U.S. House of Representatives voted last Tuesday to approve House Resolution 2874 entitled the “21st Century Flood Reform Act.”   The Act must still pass the Senate and be signed by the President before becoming law with a current expiration date just around the corner – December 8, 2017.  But if the Act does become law, many may be giving thanks and a sigh of relief as it would extend the FEMA National Flood Insurance Program (NFIP) another 5 years by establishing a new expiration date of September 30, 2022.  However, the proposed law also makes some other significant changes to the current NFIP which could affect property owners, developers, realtors, and real estate investors throughout Florida.  So far, the Act appears to include many changes to current law, but here are two significant changes we think our readers would be particularly interested to know are working their way through the proposed legislation:

I.)  Disclosure of flood risk information upon transfer of property.

The new Act would require state and local governments (if they desire to be eligible to participate in the NFIP) to pass new mandatory flood history disclosure laws governing the purchase and sale of real property.   If state and local governments do not adopt such statutes or regulations by September 30, 2022, the Act mandates that NFIP insurance policies will not be issued in those areas of the country.

Specifically, the “21st Century Flood Reform Act” would require states to impose a “property flood hazard disclosure” duty on sellers or lessors of real property when transferring property.  In nearly all situations involving the sale or transfer of real estate, sellers are usually obligated by contract to disclose known problems with a property to a buyer.  However, this new “property flood hazard disclosure” would require that such a disclosure:

“(1) is made in writing;

“(2) discloses any actual knowledge of the seller or lessor of—

(A) prior physical damage caused by flood to any building located on the property;

(B) prior insurance claims for losses covered under the National Flood Insurance Program or private flood insurance with respect to such property;

(C) any previous notification regarding the designation of the property as a multiple loss property; and

(D) any Federal legal obligation to obtain and maintain flood insurance running with the property, such as any obligation due to a previous form of disaster assistance under the Robert T. Stafford Disaster Relief and Emergency Assistance Act received by any owner of the property; and

“(3) is delivered by or on behalf of the seller or lessor to the purchaser or lessee before such purchaser or lessee becomes obligated under any contract for purchase or lease of the property.”

II.)  New Definitions to replace “repetitive loss structure.”

The Act also would do away with the definition of “repetitive loss structure” and replace it with a new subsection of definitions that characterizes repetitive flood losses in more detail.  The new proposed definitions would include the following:

“(A) MULTIPLE-LOSS PROPERTY.—The term ‘multiple-loss property’ means any property that is a repetitive-loss property, a severe repetitive-loss property, or an extreme repetitive-loss property.

“(B) QUALIFIED CLAIMS PAYMENT.—The term ‘qualified claims payment’ means a claims payment of any amount made under flood insurance coverage under this title in connection with loss resulting from a flood event that occurred after the date of the enactment of the 21st Century Flood Reform Act, but not including any claim that occurred before a structure was made compliant with State and local floodplain management requirements.

“(C) REPETITIVE-LOSS PROPERTY.—The term ‘repetitive-loss property’ means a structure that has incurred flood damage for which two or more separate claims payments of any amount have been made under flood insurance coverage under this title.

“(D) SEVERE REPETITIVE-LOSS PROPERTY.—The term ‘severe repetitive-loss property’ means a structure that has incurred flood damage for which—

(i) 4 or more separate claims payments have been made under flood insurance coverage under this title, with the amount of each such claim exceeding $5,000, and with the cumulative amount of such claims payments exceeding $20,000; or

(ii) at least 2 separate claims payments have been made under flood insurance coverage under this title, with the cumulative amount of such claims payments exceeding the value of the structure.

“(E) EXTREME REPETITIVE-LOSS PROPERTY.—The term ‘extreme repetitive-loss property’ means a structure that has incurred flood damage for which at least 2 separate claims have been made under flood insurance coverage under this title, with the cumulative amount of such claims payments exceeding 150 percent of the maximum coverage amount available for the structure.”

Stay up to date with “The F.L.U.D. Zone” as we continue to monitor the progress of NFIP reform.  H.R. 2874 is now with the U.S. Senate and has been referred to the Senate Committee on Banking, Housing, and Urban Affairs.    A link to a summary and status of the “21st Century Flood Reform Act” can be found here.


Facing Increased Beach Erosion, Florida Looks Internationally for Sand

Florida, like other coastal states, faces the continual challenge of how to maintain beaches in the face of increased erosion, exacerbated by sea level rise, severe storm events, and certain coastal developments. Earlier this year, the U.S. Army Corps of Engineers completed a $11.5 million dollar project to restore beaches in Florida including widening Miami Beach. In September, Hurricane Irma washed much of this away, as seen in these before and after photos. Miami Beach’s environmental director reports that the sand dunes and wider beach were effective in slowing the storm surge and retaining some of the sand. Nevertheless, Irma washed away hundreds of thousands of cubic yards of sand in Florida, and significant storms will continue to affect beaches, particularly where seawalls, jetties, and other forms of shoreline armoring prevent the beach and coastal ecosystems from migrating inland. Continue Reading

Miami Voters Approve “Sea Level Rise” Bond Initiative

Yesterday, Miami voters approved a $400 million dollar general obligation bond initiative with nearly half of the bond money ($192 million) going toward infrastructure projects to specifically, “Reduce Flooding Risks; Improve Stormwater Infrastructure.”   Although the wording of the initiative on the ballot did not include the term “sea level rise,” the initiative was heavily promoted here in South Florida as a funding mechanism to pay for much needed infrastructure necessary to deal with flooding issues related to sea level rise and was dubbed “Miami Forever.”  The bond will also fund affordable housing projects and other capital improvement projects.  The breakdown of specific proposed projects and funding is featured in our previous blog on this topic from last week.  The vote split for the bond initiative in Miami’s general municipal election yesterday was 56.8% for the bond (13,621 voters) and 43.2% against (10,359 voters).  With this approval, the City can now borrow money on the municipal bond market, and the new debt will be backed by local ad valorem property taxes – which will not increase under the terms included in the ballot measure.

New Vacation Rental Regulations Coming to Miami-Dade

Miami-Dade County recently passed a new ordinance targeting vacation rentals, which would affect hundreds of active short-term rental properties including those listed on the popular websites AirBnB, HomeAway, and VRBO. This ordinance comes on the heels of several months of sparring between the City of Miami and AirBnB. Earlier this year, AirBnB sued the City over its regulation of short-term rentals. The new ordinance, which goes into effect 3 months from the date of passage (October 17, 2017), establishes zoning regulations for vacation rentals in the unincorporated areas of the County. Those seeking to rent their properties on a short-term basis will have to obtain a certificate of use, among other requirements. Vacation rental properties will also be subject to an inspection to ensure compliance with all applicable code requirements. Continue Reading

City of Miami Voters to Decide $400 Million Bond For Sea Level Rise and Affordable Housing

By August 30, 2017, Irma had transformed from a mere tropical storm system off the coast of Africa into a Category 5 Hurricane with South Florida appearing in its sights.  With only days before possible landfall in Miami, the entire city, its people, businesses and property owners shifted from their normal daily lives to making rushed emergency preparations for a major hit.  Even though Miami-Dade did not suffer a direct hit, damage to property was wide-spread and significant.  Such is life here in South Florida with the threat of extreme weather events and hurricanes recurring every year.

But as development continues to surge along the coast despite these risks, city and county governments are increasingly looking for answers about how to plan for inevitable impacts from severe weather events.  In particular, local governments are asking how they should not just plan for, but also, pay for smarter, more resilient public infrastructure – such as stormwater drainage systems, elevated roads, and public spaces.  In some coastal cities, like the City of Miami, questions are being raised about how to pay for these kinds of  infrastructure improvements in anticipation of more than just extreme weather, but also sea level rise, and predictable flooding problems linked to “King Tides.” Continue Reading

Reauthorization of the National Flood Insurance Program (NFIP). When does it Expire? Will it be reauthorized or changed?

One of the most significant land use issues facing Congress this year is reauthorization of the National Flood Insurance Program (NFIP).  The NFIP is a FEMA managed program that provides flood insurance, analyzes and improves floodplain management, and develops flood plain maps (called Flood Insurance Rate Maps or “FIRMs”) showing different types of flood zones.  The NFIP was created in 1968 as a national effort to respond to an ever-increasing need for flood disaster assistance and to give private property owners a way to get flood insurance in places where private insurance companies did not and would not offer flood insurance coverage.   With a previously set expiration date of September 30, 2017 looming and major hurricanes wreaking havoc on U.S. states and territories, Congress recently passed a short term extension of the NFIP with a new expiration date set for December 8, 2017. Continue Reading

“Florida 2070”: What Florida’s Land Development Patterns Could Look Like In 50 Years

What do land development growth patterns across Florida look like over the next 10, 20, or 50 years?  That’s a question local governments, developers, and property owners of all types consider when planning for the future and investing in real estate development projects. Understanding those patterns, where they will occur, and in what intensity are driven by statistics and data about population growth trends, as well as having an in depth understanding of an area’s capacity to adequately accommodate growth. Knowing where growth will come, leads to other more detailed questions about adequacy of roads, sewer, water supply, schools, public facilities, and a community’s quality of life. Where will people work and live? Will important agricultural lands be kept in production or converted to other land uses? Land development regulations, environmental law, and growth management policies all affect these growth patterns.  Continue Reading

Sea Levels Are on the Rise: Is Florida’s Coastal Development Rising to the Challenge?

King tide and rain storm inundates Brickell Avenue, Miami on October 5, 2017.

A recent report by the National Oceanic and Atmospheric Administration (NOAA) states that sea levels are rising in certain areas of Florida by a third of an inch per year – or more. Not just the actual level, but even the rate of sea level rise is increasing. This is happening while the population of Florida continues to grow, including in the city that is considered most at risk for sea level rise – Miami. While population and real estate investment continue to swell in Florida, many cities are putting their energy and resources toward a new kind of development, one that is more resilient.  In particular, the City of Miami Beach is investing millions of dollars in elevating over a hundred miles of roads and installing more storm water pumps .

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Zoning for Residences with Disabilities: Old Principles Apply to New Scenarios as the Opioid Epidemic Spreads

Florida, like much of the U.S., is struggling with a mounting opioid epidemic. Governor Rick Scott recently declared the epidemic a public health emergency in Florida. A study by the Florida Department of Law Enforcement/Florida Medical Examiners states that the number of deaths in the state directly caused by opioid use in 2015 numbered 2,538. The same study reported that another 3,896 deaths, while not directly caused by opioid overdose, revealed that opioids were at least present in the deceased person’s body. This is a stark increase in numbers of deaths related to opioid overdose from prior years, which had already been seeing a steady rise in these unfortunate statistics. The largest numbers of deaths are coming out of southeast Florida. This crisis affects not only the individual addicts and their families, but it also affects our communities and residential zoning districts.

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