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Goodbye Federal Flood Insurance, You Will Be Missed

12 Oct
Goodbye Federal Flood Insurance, You Will Be Missed

Last week, the director of The White House Office of Management and Budget proposed new amendments on the National Flood Insurance Program. The program which accumulated $25 billion of debt, has been in place since 1968. It was created to protect homeowners who are living in flood-prone zones near coastal areas and rivers.

The new revision proposes the removal of the program for new homes that are built after 2020 in flood-prone areas. They will no longer be eligible to apply for the National Flood Insurance Program and will be required to obtain private insurance. It is important to note that homes that are built within the 100-year flood plain will not be affected. The Federal Emergency Management Agency will also have the rights to remove coverage on properties with have flooded several times.

The National Association of Home Builders has voiced out their discontentment on the new change, as it will affect many constructions in large parts of Florida, Louisiana and the Eastern Seaboard, which are been flood-prone areas. They argued that the change discriminates new constructions and hinders the development of safe and affordable housing. Moreover, the abolishment of the national flood insurance will force homebuilders to turn to private flood insurance which is limited in numbers and would most likely slow the growth. This proves to be a problem as lenders are concerned in investing towards a project without a reliable insurance. In Miami, every condo and house which is located East of Biscayne Boulevard is considered in a flood zone.  If the policy was taking effect now, new preconstruction condos such as Biscayne Beach, Elysee, Missoni Baia condo would not be eligible to get the National Flood Insurance Program.

Environmental activists, on the other hand, are agreeing with the White House. They argued that the abolishment of The National Flood Insurance would restrict and prevent developments on natural coastal and riverine area in which they wish to protect. It is important to note that the National Flood Insurance Program has previously drawn large criticism for its large subsidizing on homes that are prone to damage and destruction.

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Posted by on October 12, 2017 in News

 

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