A bipartisan coalition of federal lawmakers introduced legislation Tuesday to postpone steep increases in flood insurance premiums that could squeeze homeowners trying to recover from superstorm Sandy.
The bills, introduced in both the House and Senate, would delay premium hikes approved by Congress in July 2012 as part of an effort to end decades-old subsidies that have left the government-run National Flood Insurance Program $17 billion in debt.
Now a growing number of lawmakers are rethinking those changes after Sandy, saying they could cause some homeowners' annual premiums to spike by hundreds, possibly thousands, of dollars.
"It is just not fair. Residents just getting over the destructive force of Sandy are now facing an equally destructive force -- unaffordable flood insurance premiums," Sen. Charles Schumer (D-N.Y.) said at a news conference in Washington.
The pending legislation could be a boon to the home values of up to 25,000 Long Island families who have subsidized flood policies. It would extend the long-running practice of allowing homeowners to pass those subsidies along to buyers when they sell their houses.
Critics, however, contend the move would delay fixing a program that drives up the national debt and encourages development in fragile regions. Steve Ellis, of the nonpartisan watchdog group Taxpayers for Common Sense, called the legislation a "transparent attempt to avoid any reforms."
"It does nothing," he said, "to fix a severely troubled program."
For decades, the federal government has been virtually the sole provider of flood insurance, because most private companies consider it too risky. Many of those government flood policies are subsidized, making the average premium around $650 a year. If written by a private insurer, the average would be nearly double, according to the Property Casualty Insurers of America, a trade group.
On Long Island, 32 percent of the roughly 83,000 flood insurance policies are subsidized, compared with 20 percent nationwide, according to the Federal Emergency Management Agency, which runs the flood program.
The approach has made coastal living more affordable for millions of people. But it has forced the flood insurance program to borrow more than $17 billion to fund claims.
The 2012 law to overhaul the program calls for gradually bringing flood insurance premiums up to full cost by no longer allowing buyers to retain the insurance subsidies when houses are sold. It would also end subsidies for vacation homes, businesses and properties with chronic flood problems. (There are about 420 of the latter on Long Island.)
The bills unveiled Tuesday echo similar legislation introduced in May by Sen. Mary Landrieu (D-La.) They call for continuing to grandfather subsidies to home buyers until FEMA studies the economic impact.
The new legislation, however, would not affect businesses, vacation homes and properties that flood regularly, whose rates would still rise 25 percent annually until premiums hit the actual level of flood risk.