We told you previously about the Homeowner Flood Insurance Affordability Act of 2014, recently enacted legislation championed by your Home Builders Association that will provide a significant boost to home building and remodeling as well as certainty and financial stability to the National Flood Insurance Program.
The numbers are in on the legislation, and NAHB’s experts estimate that in 2014, the new law will result in a total of more than $1 billion of housing market activity, including:
- $755 million in new home construction because the new law makes it easier for prospective new home buyers to sell their existing home and trade up.
- $361 million in additional remodeling activity because the legislation eliminates insurance costs that some home owners would have been required to pay on certain remodeling jobs.
The recently enacted legislation provides a more affordable rate structure for policyholders and repeals the requirement that flood insurance premiums increase immediately to full actuarial rates when homes are sold. It also restores “grandfathering” for properties that were paying premiums applicable to their initial flood risk rating, allowing owners to pay premiums based on the original risk zone rather than updated flood risk zones.
In addition, the legislation requires the Federal Emergency Management Agency to take local flood control structures into account during the remapping process and provides reimbursement for successful consumer map appeals. It also restores the “substantial improvement threshold” that triggers a higher flood insurance rate to the historic 50 percent of a structure’s fair market value, which is important for many remodelers.