Rep. Maxine Waters (D-Calif.) urged both Republican and Democrat legislators to bring stability to the National Flood Insurance Program. Her request comes after the Congressional Budget Office (CBO) released a report on how climate change is impacting the housing and financial markets.
In the report, the CBO estimated the amount of flood damage that will occur to homes with federally backed mortgages and what these mortgages will face in two multiyear projections, one focusing on 2020 and another on 2050.
During the 2020 projection period, meant to capture current climate conditions, homes with federally backed mortgages face expected annual damage (EAD) of $9.4 billion. CBO estimated that amount will increase to $12.8 billion (not adjusted for inflation) in the 2050 projection period if all factors other than the climate remained unchanged. Under a lower climate change projection, EAD in the 2050 period was $10.2 billion, and under a higher one, was $16.1 billion.
“The total expected damage over a 30-year period to homes with federally backed mortgages rises from $190 billion (in present-value terms) in the 2020 period to $258 billion in the 2050 period,” the CBO stated.
The report also discussed the projected locations of the damage. According to the report, between 40 percent and 50 percent of flood damage occurs outside of areas designated as special flood hazard areas by the Federal Emergency Management Agency (FEMA). More than half of all expected damage to homes is in coastal areas, and the top 10 counties in terms of EAD account for more than one-quarter of EAD nationwide.
“I’ve long sounded the alarm on the effects of climate change, and the CBO’s new report is a stark reminder that worsening climate change remains one of the greatest threats to our nation’s housing and financial systems,” Waters said. “The CBO also adds to a body of evidence that shows the FEMA mapping of special flood hazard areas (SFHAs) does not account for up to half of all homeowners with federal mortgages who are at risk of flood damage, with most expected damages concentrated in coastal areas. This is why I have continually pushed for increased funding and reforms to modernize the National Flood Insurance Program (NFIP) and FEMA’s mapping of SFHAs.
“The bottom line is that families across the country who are affected by increased flood disaster cannot afford to pay the price of the current instability of the NFIP,” she added. “While the House passed its 27th bipartisan short-term reauthorization of this NFIP through Feb. 2, 2024, this is part of a pattern that has put the NFIP repeatedly at risk of lapse throughout the years – something that industry and advocates alike have strongly opposed.”
In her call to fellow representatives to pass legislation that would bring stability to the NFIP through long-term reauthorization and reform, Waters mentioned the success the House Committee on Financial Services had in passing the NFIP Reauthorization Act in 2019. She stated she was confident the House could do so again.
“Now is the time,” she concluded.