Reducing the Flood Hazard Exposure of HUD-Assisted Properties

• Published in: Cityscape (Washington, D.C.) Vol. 19; no. 2; pp. 281 - 300
• Main Author: Hollar, Michael K.
• Format: Journal Article
• Language: English
• Published: Washington Office of Policy Development and Research (PD&R) of the U.S. Department of Housing and Urban Development (HUD) 01-01-2017; U.S. Department of Housing & Urban Development
• Subjects: Climate change; Costs; Disasters; Efficient markets; Emergency preparedness; Failure; Flood control; Flood damage; Flood insurance; Floodplains; Government agencies; Households; Housing developments; Housing prices; Impact; Impact analysis; Insurance policies; Moral hazard; Regulation; Risk management; Sea level; Storm damage; Urban development; United States > US
• ISSN: 1936-007X; 1939-1935

According to U.S. Global Change Research Program (2014), the global sea level has risen about 8 inches since reliable recordkeeping began in 1880 and is expected to rise another 1 to 4 feet by 2100. Prices did decline, however, by 2.6 percent in the 0.2 percent annual chance (500-year) floodplain. Since NFIP requires homebuyer notification of flood risk in the 1-percent annual chance floodplain but not the 0.2-percent annual chance floodplain, this finding indicates that home prices reflected the risk in the former, but the flood event provided new information to owners in the latter. Analysis HUD's assistance in floodplains generally consists of only noncritical actions, assisting or insuring the new construction or substantial improvement of single-family and multifamily properties. Because HUD does not routinely insure or fund critical actions, such as mortgage insurance of hospitals and assisted-living facilities, in flood zones, this analysis focuses on the impact to noncritical actions in a typical production year. Benefits of Rule The standard proposed in this rule that requires that buildings be constructed with at least 2 feet of freeboard above BFE is intended to protect HUD-assisted and HUD-insured structures and the owners and tenants in these units. [...]the benefits of the rule include reduced building damage and decreased costs to tenants temporarily displaced due to flooding, the latter of which includes avoiding search costs for temporary replacement housing and lost wages.