Should Towns Cut Taxes to Compensate for Higher Flood Insurance?

Should beachfront towns give taxpayers a tax break to compensate for coming higher flood insurance rates due to two years of hurricane strikes?
Harry Simmons, mayor of Caswell Beach, N.C. and president of the American Shore and Beach Preservation Association (ASBPA), said towns should consider finding a way to offset higher flood insurance costs.
“We’re trying to encourage local governments to do the best they can to help folks with these potential cost increases in term of insurance, to figure out ways that will be less of a challenge all at once,” he said.
Simmons said a number of towns have faced redrawn flood maps in the past few years.
“We got hit with new flood maps five years ago and are soon to be looking at another redrawn of the flood maps,” he said, speaking of Caswell Beach.
A number of hazards were brought in the flood elevation issue that had not been there previously, said Simmons.
“We had to deal with it, people paid higher premiums and some people couldn’t do it, some people decided to sell and get out,” he said.
“I don’t know that we can save everybody’s situation but I think we have to do the best we can as a nation to allow folks to live in coastal towns or otherwise it’s just going to be a place where the prophecy will come to fruition where the only people that can live in a coastal community are the very wealthy,” Simmons continued.
While that has almost come to pass in Cape May County, Simmons said it was possible to buy a home on a barrier island in North Carolina for under $200,000.
He said until Hurricane Katrina, coastal residents have paid far more into the National Flood insurance program than has been paid out as claims.
“For many years, the coastal interests of the National Flood Insurance program were paying for flooding problems on the rivers of America and not so much the coast itself,” said Simmons. “That changed with Katrina.”
Claims are being made for Hurricane Sandy.
Simmons said changes to the National Flood Insurance program should be done in phases. He said a house that has to be completely rebuilt in New Jersey needs to be built to the current flood elevation and codes.
Homeowners who were not directly on the beach, such as owners of Victorian homes in Cape May, should not be hit with a large flood insurance bill, he said. Simmons noted Cape May homes were protected by the beach nourishment projects from the federal government.
“My biggest concern is because of the problems that happened from the middle to the northern part of the New Jersey shore, you’re going to have impacts on places like Cape May that probably ought not to have those same cost impacts,” he said.
He said he feared it would happen all over coastal America in “ways that don’t represent the real risks.”
A concern of ASBPA is how to protect the middle class that live in coastal America like teachers, construction workers and firefighters.
“How do we help them to continue to live in these communities?” asked Simmons.
He said he feared National Flood Insurance would try to make up for its failures of the past 30 to 50 years all at once. National Flood Insurance has limit of how much a homeowner can receive on a structure.
“There are people that suggest to us that existence of the National Flood Insurance program is encouraging people to build big houses at the beach that can’t be moved or protected any other way except to build a bulkhead,” said Simmons. “That’s not fair because all you’re really protecting is the first $250,000 of that cost by the National Flood Insurance program.”
He said the $250,000 limit on National Flood Insurance actually encouraged building houses under that cost.
On the question of whether a home should be rebuilt on the spot where another home was destroyed by a storm. Simmons said it was a case by case matter.
“Some houses should perhaps not go back, I’ve got places in my town where houses will never be built again but not many,” he said.
Simmons said that was a decision for local governments to make. He said a study from Delaware compared costs of restoring a beach against removing the houses.
“The cost of removing the houses was tremendously greater than the cost of restoring the beach,” he said.
“We’ve been factoring sea level rise into building and rebuilding beaches for many years,” said Simmons.
Coastal storm damage reduction projects from the Army Corps of Engineers, that occur every five years, include in the design what they believe the next 50 years of sea level rise will produce, he said.
ASPBA has not offered an opinion on pending legislation in New Jersey that would not allow towns that accept federal beach renourishment money to sell beach tags.
“We believe that access should be available where public money is used to put sand on the beach but we haven’t taken a position on whether or not parking should be charged or there should be beach tags,” said Simmons. “I think they are other things that beach tags and parking fees pay for in beach towns other than simply the access to the beach….”
ASBPA was founded in 1926 in New Jersey and has published a journal entitled “Shore and Beach,” since 1933. The organization played a major role in getting the Army Corps of Engineers involved in the beach building business in the 1930s and 1940s, said Simmons.
ASBPA has board members from throughout coastal America including city, county and state officials. Its primary focus is beach erosion issues, said Simmons. Their website is ASBPA.org.