News Release
Rising Flood Insurance Costs a Growing Burden to Communities and Homeowners in New York City
Mar 27, 2017
This report examines flood insurance cost in New York City and homeowners' ability to afford it. It makes projections for how changes in flood maps and pricing practices of the National Flood Insurance Program might increase premiums, analyzes the potential consequences of those increases on households and communities, and develops and evaluates several different approaches for assisting households that have difficulty affording flood insurance.
Economic Impacts of Rising Premiums and Policy Options for One- to Four-Family Homes
Format | File Size | Notes |
---|---|---|
PDF file | 9.3 MB | Use Adobe Acrobat Reader version 10 or higher for the best experience. |
Format | List Price | Price | |
---|---|---|---|
Add to Cart | Paperback224 pages | $39.50 | $31.60 20% Web Discount |
This report examines the cost of flood insurance in New York City and the ability of homeowners to afford it. It develops projections for how changes in flood maps and the pricing practices of the National Flood Insurance Program might increase premiums and analyzes the potential consequences of those increases on households and communities. It also develops and evaluates several different approaches for assisting households that have difficulty affording flood insurance. These include financial payments to households to offset the cost of flood insurance as well as mitigation grants and loans that reduce flood insurance premiums by making the home less susceptible to flood risk. This report builds on a previous work by the RAND Corporation on flood insurance in New York City, Flood Insurance in New York City Following Hurricane Sandy.
In addition to informing New York City's efforts to make its communities more resilient to flood risk, this work is also relevant at the national level. Congress instructed the Federal Emergency Management Agency (FEMA) to develop an affordability framework in light of legislation that directs FEMA to gradually eliminate certain program subsidies and to collect additional program fees. This report provides data and analysis that also inform that effort.
Policymakers should weigh the advantages and disadvantages of the different approaches for a flood insurance affordability program. In addition, moving forward requires addressing a number of questions.
Chapter One
Introduction
Chapter Two
The Affordability of Flood Insurance in New York City
Chapter Three
Flood Insurance Premium Scenarios
Chapter Four
Flood Insurance Affordability in Five Vulnerable Subareas
Chapter Five
Effects of Flood Insurance Premium Increases on Households and Neighborhoods
Chapter Six
Flood Insurance Affordability Program Options
Chapter Seven
Conclusion
Appendix A
Survey Methods
Appendix B
Development of the Project Geodatabase
Appendix C
AMI-Based Income Categories and the Correlation Between Household Income and Net Worth
Appendix D
Components of Housing Costs and Relationship Between Amount of Flood Coverage, Structure Replacement Cost, and Mortgage Balance
Appendix E
Flood Insurance Premium Model
Appendix F
Eligibility Requirements for Pre-FIRM and Grandfathered Rates
Appendix G
Economic Effects Model
Appendix H
Survey Instrument
This research was sponsored by the New York City Mayor's Office of Recovery and Resiliency and conducted by the RAND Institute for Civil Justice (ICJ) within RAND Justice, Infrastructure, and Environment.
This report is part of the RAND Corporation Research report series. RAND reports present research findings and objective analysis that address the challenges facing the public and private sectors. All RAND reports undergo rigorous peer review to ensure high standards for research quality and objectivity.
This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited; linking directly to this product page is encouraged. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial purposes. For information on reprint and reuse permissions, please visit www.rand.org/pubs/permissions.
The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.