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Flooding, insurance, and adaptation – a Rhode Island update

Shorefront cottages at risk from floodingAfter heavy rains that prompted the National Weather Service to issue a flash flood warning for all of Rhode Island, some of the state’s homeowners may be breathing a sigh of relief that just days earlier, on March 21, President Barack Obama signed the Homeowner Flood Insurance Affordability Act.

The new act gives relief to property owners who were facing major flood insurance increases under the Biggert-Waters Flood Insurance Reform Act of 2012, which raised National Flood Insurance Program (NFIP) rates to "reflect the true risks and costs of flooding," according the Federal Emergency Management Agency (FEMA).

Homes and businesses with mortgages that are located in a flood zone are required to be covered by flood insurance. Under Biggert-Waters, owners were faced with insurance rates that in some cases quadrupled overnight.

Rhode Island has more than 16,000 NFIP-issued policies, the majority for primary residences. The new act caps annual rate increases for primary homeowners at 18 percent, while businesses and second homes will see a mandatory 25 percent annual rate increase until they reflect rates based on actual risks. The act also allows the transfer of subsidized insurance to future property purchasers and provides refunds on purchases made after July 6, 2012, when insurance rates increased under the Biggert-Waters Act.

In 1968, Congress created the NFIP so homeowners, renters, and business owners could protect themselves against the risks associated with flooding.  When participating communities adopt and enforce ordinances that meet or exceed FEMA requirements, insurance can be purchased through the NFIP, often at subsidized rates that are much lower than typical risk-based insurance would cost.  Premiums, however, did not cover the actual costs—especially in light of unexpected damages from storm events and sea level rise—leaving the NFIP with a $24 billion debt, according to FEMA. The NFIP has paid out more than $117 million in claims in Rhode Island since 1978. Nearly half of that has been for damages incurred in the last few years from the March 2010 floods and Superstorm Sandy. These are the largest flood insurance claims in the history of the state, according to Senator Jack Reed’s office.

Property owners are increasingly looking to reduce flood risks and insurance rates. One method is elevation.

Insurance rates are directly correlated with elevation, according to Will Litvin, co-owner of the Lighthouse Real Estate Group in Wakefield. He said that raising up houses on stilts, where permitted, may be one way to maintain affordable flood insurance but presents certain challenges, such as compromising the insulation and durability of the foundation. "Certain houses may lose value due to these elevations," he said.

How property owners can reduce insurance rates by building or retrofitting homes or businesses to be more resilient to flooding will be discussed on Thursday, April 3, 2014, at the R.I. Shoreline Change Special Area Management Plan (Beach SAMP) stakeholder meeting from 6 p.m. to 8 p.m. at the Coastal Institute on the University of Rhode Island Bay Campus in Narragansett. Representatives from the Insurance Institute for Business and Home Safety’s FORTIFIED program and The Nature Conservancy will present various adaptation measures.

The Beach SAMP is intended to improve state policies to better address coastal issues such as flooding, erosion, and storm damages. Other efforts are focused on aiding local municipalities such as North Kingstown, South Kingstown, and Newport who are reevaluating community design and habitat restoration to protect against coastal hazards.

For more information on flood insurance policies, please visit the Rhode Island Emergency Management Agency, and for more information on coastal adaptation, please visit Rhode Island Sea Grant.

Newport gets "SEA Aware" of flooding, sea level rise threats

Downtown Newport and Ann St. PierDuring a major storm, homeowners can learn a lot about their property's vulnerability to flooding, as water seeps into basements, inundates septic systems, or damages structures. These threats also pose a community-wide risk to businesses, schools, hospitals, and other public buildings and infrastructure.

To help prepare Newport residents and businesses in advance of such an event, the city recently hosted a community meeting, SEA Aware, to explain the threat of flooding and sea level rise the city is likely to face.

Teresa Crean, Rhode Island Sea Grant/Coastal Resources Center extension specialist, helped the city bring agencies and organizations to the event including the R.I. Emergency Management Agency (RIEMA), Save The Bay, the R.I. Coastal Resources Management Council and the R.I. Department of Environmental Management's pier manager for State Pier #9, an important commercial fishing pier. 

New statewide flood maps from the Federal Emergency Management Agency (FEMA) have recently been issued, and flood insurance rates have increased, and a representative from RIEMA helped participants look up their properties in the state's flood insurance database.

Crean brought detailed maps showing the vulnerability to flooding of each parcel in downtown Newport, as well as all of the area's facilities and infrastructure—including everything from critical infrastructure and RIPTA bus lines to storm drains and manhole covers. These maps showed which parcels experience, or will experience, flooding at mean higher high water (roughly, an average of the highest daily tides) at present, as well as in the event of increasing sea level rise with storm surge. The maps also showed how far inland waters came during the height of the surge of the Hurricane of '38.

The maps were created as part of an effort to replicate a R.I. Division of Planning-funded project by Sea Grant/CRC in North Kingstown. That project mapped flood-threatened areas and identified vulnerable infrastructure to prioritize future investments. The Newport project is supported by Sea Grant, the van Beuren Charitable Foundation, and the Prince Charitable Trusts.

Some attendees were concerned that while the maps gave them better information, they were not sure how to proceed to protect their property. Crean said that the mapping is just the first step in helping Newport to increase its resilience to sea level rise and flooding. The next phase of the project will involve linking the city with the statewide Shoreline Change Special Area Management Plan (aka Beach SAMP), and to engage the business community in Newport to understand the opportunities and challenges to adaptation along the wharves and piers of Newport harbor.

In the meantime, SEA Aware offered a handout on steps residents could take to prepare for flooding. The handout noted that the city is  currently applying for status in the National Flood Insurance Program's Community Rating System, which would offer Newporters decreased premiums on their flood insurance based on actions the City is taking to reduce flood risks.  After acceptance of the application by FEMA, a rating will be assigned and Newporters could see reductions in their flood insurance premiums by the middle of 2014.

Detailed maps are available for Newport at http://seagrant.gso.uri.edu/climate/sealevelrise.html and for North Kingstown at http://seagrant.gso.uri.edu/climate/nk_phase2.html. An interactive statewide map is also available at http://seagrant.gso.uri.edu/climate/slr_tools.html (click on "Digital Elevation and Bathymetry Data Tool").

Rhode Island Sea Grant and the Coastal Resources Center are located at the University of Rhode Island Graduate School of Oceanography.

How much are we willing to pay to live on the coast?

Peaks Island, Maine. Photo by www.worldislandinfo.comAccording to economists, said professor Robert Johnston, people make decisions based on tradeoffs: What will I give up and what will I get in return? Johnston, an economics expert from Clark University, said in a presentation sponsored by Rhode Island Sea Grant at the University of Rhode Island.

Johnston discussed various ongoing research efforts to look more specifically at the tradeoffs of coastal management in New England communities, and the potential costs associated with climate change. He said resources managers can’t think about hazard adaptation in isolation from all the other management tradeoffs, noting that some of the key tradeoffs will be related to coastal development regulations.

"What are you going to do about all of the houses on the coast?" he asked. "How are you going to regulate development along with ecosystem services, like beaches people use for recreational purposes?"

There are property rights and equity concerns in play, but at the heart of Johnston’s talk was the question: What are people willing to pay to protect their homes or the ecological services provided by healthy habitats, such as clean water and storm buffers?

"These are the things we don’t buy at the store," Johnston said, referring to the benefits of having a beach or wetland. These non-market values can be hard to measure, but they influence people’s decisions.

The biggest challenge, Johnston said, is balancing development interests with a healthy environment. "Areas that are most valuable for their ecological services are where most people want to live," he said.

Those areas, however, are sensitive to development that can disrupt highly valued services. Wetlands, for example, filter runoff, prevent erosion through stabilizing vegetation and reduce flooding by absorbing water. Removing these systems through development takes away those services.

To evaluate management tradeoffs, Johnston said, three things need to be considered:

• What are the ecological services?
• Which services will change if the land changes?
• What are the benefits and costs of these changes?

"We found some unexpected patterns," he said of his research team. For example, Johnston discussed a project in Maine that looked at coastal development and riparian restoration efforts. While policymakers assumed home protection to be the highest concern for residents, it turned out that people were willing to pay the most for increased law enforcement and regulations on private property to protect habitat quality.

"We found people were willing to pay for setback regulations, which is very different from what policymakers assumed," he said.