A bipartisan group of congressional lawmakers is pressing for a four-year delay to changes to the federal government's flood insurance program that are threatening to sock thousands of people -- including in the Keys -- with unaffordable premium hikes.
The move comes as the government is beginning to implement a significant overhaul of the much-criticized program. That overhaul passed last year with sweeping support. The revamped program was backed by both liberals and tea party conservatives but has caused a panic in places like Florida, where higher rates threaten to push some people out of their homes.
Some of the most ardent supporters of delaying the premium increases are conservative Republicans from Southern states, where the new rules have sent some home values plummeting because of uncertainty over insurance rates and because subsidized rates can't be passed along to buyers.
New flood maps threaten to saddle some homeowners who are paying a few hundred dollars a year now with annual premiums of more than $20,000.
The situation is a result of astronomical rate increases from the Federal Emergency Management Agency's National Flood Insurance Program that took effect Oct. 1, part of the 2012 Biggert-Waters Flood Insurance Reform Act.
Almost every Keys homeowner with a mortgage has depended on subsidized NFIP rates for affordable flood coverage, but owners of second homes and pre-FIRM houses are being hardest hit.
Pre-FIRM refers to houses built before January 1975, when FEMA's flood insurance rate map came into existence. Many of those homes are built at or below base flood elevation.
In the Keys, Realtors say the effects of the new rates have already been felt in terms of home sales being called off. They're unsure what a delay of Biggert-Waters would mean.
"I think the concerns will continue even after this resolution," said Jim Signor, owner of Re/Max Keys Properties in Key Largo. "It's still early on but from what I've heard, it sounds like a patch, not a fix."
"It's a concern to our business, but an even bigger concern to those who own the property this affects," Signor said.
"I applaud them for recognizing the impact the Biggert-Waters Act is having on people everywhere. It's horrendous," said Brian Schmitt, broker and owner of Coldwell Banker Schmitt Real Estate. "This fix, as far as I read it, is for primary homeowners only. It's not for people who have investment property. If this fix doesn't address non-primary owners, it's not going to help us. I don't know why they're making the difference."
In Key West, Bascom Grooms Real Estate owner Bascom Grooms said rate hikes cost him the sale of a $319,000 home on Summerland Key. "We had a contract on the property and the buyer walked away," he said.
He said that as a listing agent, his company is encouraging sellers to obtain elevation certificates so that a would-be buyer doesn't have to go through that three- to four-week process.
New legislation would delay the new rates for people purchasing homes from someone who currently has a subsidized policy or people who face higher rates when flood maps are updated.
People with second homes or whose property has repeatedly been flooded would still have to pay the higher rates, which are scheduled to rise by 25 percent a year until their premiums reflect the true risk of flooding. Biggert-Waters law protected subsidies for people who receive them if their houses hadn't been recently flooded. The new legislation would allow them to transfer the subsidy when they sell their home, thereby propping up home values.
Sponsors of the bill included Democratic senators Bill Nelson of Florida, Bob Menendez of New Jersey and Mary Landrieu of Louisiana. Republican sponsors are senators Johnny Isakson of Georgia, David Vitter of Louisiana and Thad Cochran of Mississippi. Rep. Maxine Waters (D-Calif.) -- who co-wrote the legislation raising rates -- is also on board.
"This is great news for many Floridians who've been told their flood insurance rates were going way up," Nelson said. "If people can't afford the coverage, what good is it going to do?"
It's unclear whether the drive to delay implementation of the law will succeed.
The flood insurance program has long offered below-cost rates for homeowners in flood zones and has racked up about $25 billion in red ink since its creation in 1968. It has been criticized for repeatedly paying off homeowners whose houses get flooded every few years.
But that doesn't happen in the Keys.
KeysNet staff supplemented this report.