Yes, Virginia, You Pay Subsidies Not Just to Banks but to Flood-Prone Homes of the Rich

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http://truth-out.org/news/item/22065-yes-virginia-you-pay-subsidies-not-just-to-banks-but-to-flood-prone-homes-of-the-rich

You are supporting the habits of the rich in more ways than you know, including their love of water views.

Readers may recall that we wrote about the Biggert-Waters Act, a bill to address rising losses in a Federal flood insurance program that had run on a self-supporting basis until the late 2000s. As New Jersey Spotlight explained:

Congress created the National Flood Insurance Program in the late 1960s after Hurricane Betsy hit New Orleans, causing over a billion dollars in damage. Flood insurance was nearly impossible to secure from the private market, so lawmakers felt the federal government had a duty to step in and provide help to residents along the coast. The program was set up to be self-sustaining, borrowing from the U.S. Treasury only when necessary, and it generally worked for several decades. But beginning in 2005, Hurricanes Katrina, Rita, Wilma and several other storms caused it to blow through its budget and go $24 billion in debt.

The mandated increases under Biggert-Waters started hitting at the same time when FEMA issued new flood maps. This is a periodic process, but the latest version reflected recent experience with more frequent and severe storms. As a result, people whose homes had never been in floodplains (and hence required to buy insurance) were newly included,. Those already in a flood area saw their premiums increase, at a minimum due to Biggert-Waters, plus many were hit by having their home moved into a higher risk category. The result was many faced increases of tens of thousands of dollars in annual premiums. For instance, a Bloomberg headline wailed about seven-fold increases; a NOLA story about St. Tammany Parish listed several cases of more than ten times premium increases.