NEW ORLEANS (AP) – Increases in federal flood insurance premiums expected to exceed 700% in the coming years are already leading people to hold back on home purchases and are likely to bring in an exodus of residents and businesses from southern Louisiana, officials said. a federal judge Thursday in New Orleans.
The testimony came at a hearing in a lawsuit Louisiana and nine other states filed against the federal government to block a sharp increase in national flood insurance rates. A phase-in of the new rates begins in 2021. The annual increase is limited to 18%. The Federal Emergency Management Agency says the new method of calculating rates has resulted in a decrease or little or no increase for most policy holders.
But the FEMA numbers also show big future increases in some Louisiana ZIP codes. State and local officials testifying Thursday said the increases are expected to result in some working-class people in south Louisiana leaving their mortgages, trying to sell their homes. family for generations, or drop their insurance.
“We’re already seeing a slowdown in new building,” said Matt Jewell, president of St. Charles Parish, west of New Orleans.
The implications go beyond hits to the real estate market and tax revenue. Officials say lower incomes can also hinder flood control and mitigation efforts. And some federal disaster programs require people in certain areas to have flood insurance — which officials say is out of reach.
State attorneys said during arguments before U.S. District Judge Darrel Papillion that participation in the National Flood Insurance Program requires local governments to adopt building-elevation policies and flood prevention efforts. floods that often require taxes – approved by voters who believe mitigation efforts will keep rates down.
“They made us liars,” Solicitor General Liz Murrill told Papillion.
Papillion heard arguments on the federal government’s motion to dismiss the case and on the state’s motion for an injunction blocking the rate increase pending further court proceedings. It was unclear whether he would rule on Thursday.
Florida, Idaho, Kentucky, Mississippi, Montana, North Dakota, South Carolina, Texas and Virginia are the other states listed as plaintiffs, along with several local governments and flood control bodies in Louisiana.
FEMA says its new premium system is an improvement over previous methods, which include data not previously used, including scientific models and costs associated with rebuilding a house The agency said the old method could result in people with lower-value homes paying more than their fair share, while those with higher-value homes paid less.
Returning to the old system of calculating premiums does not guarantee reduced rates, Justice Department attorney Yoseph Desta argued.
He and other government lawyers argued Thursday that the new rate plan has been in the works for years, that states have had plenty of opportunity for input, and that the lawsuit, filed and months after the phase-in began, filed later. They also argued that the states did not have standing to sue over the rates set by the National Flood Insurance Program.
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Louisiana Flood Legislation
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