The U.S. Senate approved a bill Thursday aimed at gutting a once-popular flood insurance reform effort that wound up triggering premium spikes and bruising real estate values on Long Island and elsewhere.
The vote, which passed with bipartisan support, seeks to unravel much of a 2012 law intended to rescue the government-run insurance program from crushing debt by bringing premiums in line with the actual risk of flooding. Since 2012's superstorm Sandy, lawmakers have backtracked from those reforms, saying they were too much for homeowners to take.
"New Yorkers are still recovering from the destructive force of superstorm Sandy," Sen. Charles Schumer (D-N.Y.) said. "It makes no sense to raise flood insurance rates before we consider how homeowners will be able to afford to pay them."
The measure, which faces an uphill battle in the House of Representatives, could boost home values for up to 25,000 Long Islanders who have subsidized flood policies.
The bill would reinstate the long-running practice of allowing property owners to pass those subsidies along to buyers when houses are sold. Without that grandfathering system, which the reforms ended, houses in flood zones have become harder to sell, as prospective buyers are told their premiums could skyrocket.
In much of the rest of the country, the legislation would grant a four-year delay to premium increases set to phase in next year for homeowners. Those hikes, pegged to new flood maps, have not hit Long Island, because maps here were updated in 2009, before the increases were approved.
Insurance companies typically don't provide flood coverage, because they consider it too risky. So the government has long offered subsidized policies, which has led Washington to borrow more than $24 billion to fund claims.
That ballooning debt prompted lawmakers in 2012 to pass the Biggert-Waters Flood Insurance Reform Act, which called for phasing out subsidies and gradually raising premiums until they matched risk. Today's vote marks a sweeping reversal, as lawmakers move to dismantle a law they once enthusiastically backed.
The legislation still faces opposition from House Speaker John Boehner (R-Ohio) and the White House, which issued a statement saying the bill would "further erode" the flood program's finances.
The Senate bill also has drawn condemnation from environmentalists and deficit hawks. They say gutting the reforms will increase debt and encourage coastal development.
"It's simply irresponsible for the Senate to gut reforms they overwhelmingly adopted just a year and a half ago," said Steve Ellis, of Taxpayers for Common Sense, a watchdog group.
Yet, Sen. Kirsten Gillibrand (D-N.Y.) said the bill would allow time to ensure rates are affordable. "Our families working so hard to rebuild deserve nothing less," she said.