The Federal Flood Insurance Program Is Changing, And Homeowners Fear It Will Push Them Out

Thalia Panton will never forget what happened to her quiet block in southern Brooklyn the night that Hurricane Sandy hit in 2012.

“Just looking at it, I'd never seen it so high,” Panton said. “It was dark. It was eerie, raining, raining, raining.”

Panton and her husband chose to buy a home in the Canarsie neighborhood back in the 1990s for the same reasons as many of her neighbors: it was removed from the hustle and bustle of the rest of New York City, and the suburban feel reminded her of her childhood home in Middletown, Delaware. With two young kids in tow, they bought a house near Fresh Creek, an inlet from the nearby Jamaica Bay.

But then Hurricane Sandy came, and the creek overflowed.

“Fast-forward two hours, about 8:30, that which I was seeing earlier was actually coming down the street and started to build up right here, where we're standing,” Panton told Gothamist/WNYC, which reported this story in partnership with the Center for Public Integrity and Vox.

As the floodwaters rose above her thighs, Panton says her quiet street devolved into chaos. Sparks flew from nearby downed electrical lines, parked cars began floating about in the currents, and some of her neighbors even considered using an air mattress as a makeshift raft if things got worse. All the while, Panton watched as sinkholes opened up beside her home’s foundation and water poured straight into her basement. When the waters finally receded, she was left with $60,000 in damage.

Like many of her neighbors, Panton didn’t have flood insurance at the time. Federal law requires almost all homeowners with a mortgage or another federally-backed loan buy insurance if they are living in a high-risk flood zone, but the maps created by the Federal Emergency Management Agency to mark flood risks for New York City haven’t been updated since 2007.

For the last several years, the federal agency has been working to develop new maps for much of the country’s coastlines that will more accurately depict a given neighborhood’s risk of flooding by taking into account rising sea levels and intense storms brought on by the climate crisis. FEMA did propose changes in 2015, but the de Blasio administration disputed their results and the two parties are now negotiating over the final maps. All the while, homeowners and housing advocates fear that the changes could also lead to flood insurance premiums becoming unaffordable for many Canarsie residents, effectively driving them out of the neighborhood.

Listen to Danny Lewis's report on WNYC:

“In order for people to maintain their homes and to live in Canarsie, they are going to have to have affordable flood insurance,” said Elizabeth Malone, an insurance specialist at Neighborhood Housing Services of Brooklyn. “And how we get there is going to be a very significant discussion, not just for Canarsie, but for all of the coastal communities in New York City.”

As sea levels rise due to climate change, the risk of flooding will increase for coastal neighborhoods. That in turn will likely require more people to buy flood insurance. At the same time, FEMA is proposing changes to the National Flood Insurance Program that could push premiums for Canarsie residents from an average of $600 a year to somewhere in the neighborhood of $3,000 to $6,000 as soon as 2022. Advocates say that for neighborhoods like Canarsie, which has a median household income of about $73,000, that could be a big problem.

“We're not talking about people who have irresponsibly built a beach house because they want to have a second home on the shore,” Malone said. “These are generational neighborhoods. Canarsie goes way back. So do all the coastal neighborhoods. We were built before these conditions happened.”

It’s a fear shared by Panton, who is retired and living on the pension she earned as a New York City Transit station manager. Currently, she pays about $2,400 a year for her policy, but is afraid that could increase dramatically in the years ahead.

“I don't know what's to come,” Panton said. “It's kind of scary.”

FEMA is expected to release the new flood maps by 2022. The head of the New York City Mayor's Office of Recovery and Resiliency, Jainey Bavishi, has been urging FEMA to offer households assistance based on what they can afford.

“There are some who are part of this debate that probably are not really thinking about affordability at all,” Bavishi said. “They want insurance rates to reflect the real risk of where people are living in order to dissuade people from living in those risky areas, right? But here in New York City, we know that if we transition to risk-based pricing immediately, it would lead to a huge foreclosure crisis.”

During the 2008 housing crisis, Canarsie's zip code had the most subprime mortgages in the city. And still, more than 10 years after the crash, the area–along with the neighboring Flatlands–has the 8th-highest foreclosure rate in the city. “We Buy Houses” signs are posted on lampposts and street lights every block or so, offering homeowners a quick buyout in exchange for selling their property on the cheap.

Malone, the housing advocate, says affordability needs to be at the heart of the debate over flood insurance reforms. She says rising premiums could knock the ground out from under households that are still paying off debts from Sandy repairs and suffering from predatory lending.

“The timeframe where we will start seeing foreclosures because people cannot afford their insurance, is a much closer timeline than the rising waters themselves,” Malone said. “We will be underwater financially before we are underwater physically.”

Another Canarsie homeowner, Wayne Clarke, didn't have flood insurance when Sandy hit. His home was soaked by six feet of water, but, unlike Panton, Clarke hasn't bought a policy since then. Ironically, he says, he had such a hard time getting government assistance after Sandy that he doesn't believe having flood insurance would have made it any easier.

“They gave you a hard time anyway,” Clarke said. “So if you don't have the flood insurance, what are they going to do, give you a hard time? You went through that already.”

The problem there is that FEMA has another proposal: in order to encourage people to buy policies, officials have proposed to make it so that those without flood insurance won't be able to get federal disaster aid in the future. Additionally, David Maurstad, FEMA’s deputy associate administrator for insurance and mitigation, says the flood insurance program has been vastly undercharging some people who live in flood zones. Add that to the fallout from major disasters like Hurricanes Harvey, Irma, and Maria, and the program is about $20 billion in the red. He argues that it is Congress’ responsibility to make sure that premiums are affordable.

“There comes a time when you have to evaluate the program and make these types of hard changes because they're important for the sustainability of the program,” Maurstad said.

Congress has until September to pass new rules -- or extend the current program for the 16th time in three years.