Breaking the Cycle of ‘Flood-Rebuild-Repeat’: Local and State Options to Improve Substantial Damage and Improvement Standards in the National Flood Insurance Program

Sabin Center for Climate Change Law, Columbia Law School, January 2019

Columbia Public Law Research Paper

31 Pages Posted: 3 Apr 2019

See all articles by Dena Adler

Dena Adler

Sabin Center for Climate Change Law, Columbia University

Joel Scata

Natural Resources Defense Council

Date Written: January 22, 2019

Abstract

Congress established the National Flood Insurance Program (NFIP) in 1968 to reduce flood damages nationwide and ease the Federal government’s financial burden for providing disaster recovery. Due largely to recent flood disasters, the NFIP is over $20.5 billion in debt. A proportionally small number of properties insured through the program, known as “severe repetitive loss” (SRL) properties, are repeatedly flooded, repaired, and rebuilt. These properties contribute disproportionally to the rising debts of the NFIP program. Climate change impacts, including sea level rise, more intense and frequent precipitation events, and increased storm surge, put these already vulnerable properties at even greater risk and will greatly increase the number of properties caught in this cycle of “flood-rebuild-repeat.”

The NFIP contains an adaptive mechanism — the substantial improvement/damage (“SI/SD”) standard — which can break the cycle of “flood-rebuild-repeat.” The SI/SD standard requires property owners in the program who are making significant improvements or repairs to structures in areas most vulnerable to flooding to take certain measures to mitigate their risk. However, two critical shortcomings of the current FEMA SI/SD definition undermine the effectiveness of program: 1) the SI/SD standard is only triggered when damages or repair work are equal to or exceed 50 percent of the fair market value of the structure, and 2) the regulatory definitions of “substantial improvement” and “substantial damage” do not consider repetitive cumulative repair work or cumulative damage over time. This paper explains how reforming the SI/SD standard to calculate damages cumulatively over time and to be triggered for damages and repair work worth less than 50 percent of the fair market value of the structure can help the NFIP program better weather a changing climate, lessen the taxpayer burden, and increase the safety of homeowners. It analyzes the prevalence of heightened SI/SD standards among NFIP communities and in state model ordinances and discusses the benefits and challenges of implementing more rigorous SI/SD standards.

Keywords: Sabin Center for Climate Change Law, National Flood Insurance Program (NFIP), climate change impacts, extreme weather events, environmental law

Suggested Citation

Adler, Dena and Scata, Joel, Breaking the Cycle of ‘Flood-Rebuild-Repeat’: Local and State Options to Improve Substantial Damage and Improvement Standards in the National Flood Insurance Program (January 22, 2019). Sabin Center for Climate Change Law, Columbia Law School, January 2019; Columbia Public Law Research Paper . Available at SSRN: https://ssrn.com/abstract=3364627

Dena Adler (Contact Author)

Sabin Center for Climate Change Law, Columbia University ( email )

Jerome Greene Hall
435 West 116th Street
New York, NY 10027
United States

Joel Scata

Natural Resources Defense Council ( email )

1152 15th St NW #300
Washington, DC 20005
United States

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