Flood Insurance Affordability Study Will Focus On Sheepshead Bay & Gerritsen

Three years ago, many residents of Sheepshead Bay and its surrounding neighborhoods awoke to find themselves living as refugees after Sandy’s floodwaters engulfed their homes. Those who made it through the gauntlet of bureaucratic red tape and rebuilt, now face a new challenge: Rising flood insurance rates.

To understand how new flood maps and insurance premiums might threaten the affordability of neighborhoods in flood zones, the city is sponsoring a survey of homeowners in Sandy-affected areas, and has chosen Sheepshead Bay and Gerritsen Beach as two of the neighborhoods that will receive special attention during the study.

Caroline Nagy of the Center for NYC Neighborhoods, which has partnered with the city for the survey, said Sheepshead Bay and Gerritsen Beach were getting extra scrutiny because they are working- and middle-class neighborhoods. High insurance premiums could make homeownership unaffordable for many residents and create opportunities for wealthy developers to swoop in and buy out struggling homeowners, she said.

“If rising flood insurance premiums make homes unaffordable to working- and middle-class households, then we fear they would be displaced. They might face foreclosure or financial hardship or even abandon homes. And this would pave the way for changes to the neighborhood as they currently exist,” she said.

In the wake of Superstorm Sandy, Congress passed the Biggert-Waters Flood Insurance Reform Act, which will gradually raise flood insurance rates in order to get FEMA’s flood program budget under control. Within the next few years, homeowners in flood zones who have not elevated their homes could see their insurance premiums balloon to more than $10,000 a year.

Meanwhile, new flood maps, which the city has challenged, would double the number of people living in high-risk floodplains to more than 400,000 — a number greater than the population of New Orleans, according to a report by the Center for NYC Neighborhoods.

Doreen Garson, chief of Gerritsen Beach’s volunteer fire department, said the changes to the flood insurance program could put homeowners in a situation where they can’t afford the insurance premiums, but are also unable to sell their homes at a price that could pay off their mortgages.

“The concern of course is: Who can afford it? If the house has to be sold, who is going to be able to afford another thousand dollars a month on top of a mortgage? It is going to be very difficult to sell,” she said.

The survey is being conducted citywide, though certain neighborhoods were selected the receive special attention. Besides Sheepshead Bay and Gerritsen Beach, the study will also focus on Canarsie, Howard Beach, the Rockaways, and east Staten Island, according to the RAND Corporation, a non-profit that has been contracted by the city to conduct the survey.

“We’re looking to see the economic consequences of the changes in the flood insurance program. We want to know how many households and what types of households might be financially burdened or stressed by those changes,” said Lloyd Dixon, the project’s director and a senior economist for the Rand Corporation.

Participating homeowners are chosen at random. The survey entered its pilot phase last month when letters were sent out to the first 300 homes. Followups with homeowners are taking place this week.

Those who respond to the survey will get a $50 gift card as well as a free elevation certificate, which normally costs a homeowner between $800 to $1,000. The elevation certificates can be used to qualify for reduced flood insurance rates.

The elevation certificate is not just of value to the homeowner, said Dixon, it will be used in the study to evaluate how a home could be impacted by a future storm. Participants will also be asked questions about their incomes and expenses.

The survey is scheduled to be completed by the beginning of 2016, Dixon said. A report detailing the results, which will help the city develop programs to make flood insurance more affordable, will be finished sometime in the summer.