Article Courtesy of The Tampa Tribune
By Josh Boatwright
Published September 21, 2013
More than 33,000 single-family homes across Pinellas County, or 13 percent, are at risk of seeing their flood insurance rates spike this year, according to new figures compiled by the Pinellas County Property Appraiser’s Office.
For those who think the federal government’s reform of the National Flood Insurance Program will burden only the wealthy few that live on the water, Property Appraiser Pam Dubov suggests a closer look.
About 22 percent of all homes within the city limits of St. Petersburg could see their rates double or, in some cases, increase tenfold. Those 15,324 older homes are in neighborhoods that abut the water, such as Shore Acres, but inland areas on the northwest side of town aren’t exempt.
Along the Gulf of Mexico and Boca Ciega Bay, small towns could see the majority of their homes emptied of value as buyers shy from skyrocketing premiums, Realtors say.
More than 80 percent of the homes in South Pasadena, Madeira Beach and Redington Beach were built prior to the 1970s, when these communities joined the flood program, and some of their rates could increase by more than $10,000.
Many of those older homes aren’t million-dollar beach mansions but 1940s-era beach cottages closer to the $250,000 range. As a U.S. Senate subcommittee weighed a possible moratorium on the planned premium hikes Wednesday afternoon. But many people in Pinellas County, including Treasure Island Mayor Bob Minning, wonder if it’s too late for political maneuvers.
“I’m not optimistic,” Minning said.
“I think the best that can happen is a delay in the financial implementation; but from a real estate standpoint, considering home sales, any delay is just going to put that real estate market in limbo.”
About 75 percent of homes in Treasure Island could see rate hikes, according to the property appraiser’s data. Many of those are four to six feet below base flood elevation, based on updated flood maps.
“The folks who own these, some of them have been there forever and they’re not wealthy,” Minning said.
Minning’s concerns were echoed by many members of the Senate Committee on Banking, Housing and Urban Affairs Subcommittee on Economic Policy at a hearing in Washington, D.C.
Florida Gov. Rick Scott and Sen. Bill Nelson have also joined a growing number of elected officials from states such as Louisiana, New York and New Jersey calling for a delay in rate increases that are meant to balance a $24-billion deficit in the National Flood Insurance Program.
The House has passed an amendment that would put premium hikes on hold for a year, but the Senate has yet to vote on the measure. Time is running out, as the changes are set to take effect Oct. 1.
In Pinellas County, the property appraiser’s office has been inundated with questions from homeowners worried about the trigger in the flood insurance reform that causes rates to change dramatically when a home is sold.
The government is removing subsidies on older homes built before the program began and requiring residents to get an elevation certificate to ensure their rates accurately reflect flood risks.
The map the property appraiser’s office released Wednesday focuses solely on single-family homes built before cities joined the program in the early-1970s. It excludes condos and multifamily homes, which could represent another 20,000 properties, as it remains unclear how their premiums will be assessed, Dubov said.
She said she released the figures, in part, to debunk the myth that the rising flood insurance rates will only affect the beaches.
“More people need to be concerned about this than just people who live on the barrier islands,” she said.
Even individual homes within a flood-prone neighborhood could see vastly different rates, depending on their elevations.
It’s not clear how badly the changes could depress home values, but home sales are starting to slow down already, Dubov said.
“The fourth quarter is going to be very, very telling because the story is getting out, and the fourth quarter of 2013 hasn’t begun yet,” she said.
Jim White, a beach-area Realtor with Century 21, said sales are already slowing across the county.
Many of the older homes built on the ground, which was up to flood code at the time, will likely see all their value erased, he said.
“Those homes will no longer have any value in terms of the house because buyers will have to knock it down in order to build to the base flood,” White said.
“We’re all praying they do something to delay the bill.”