FEMA’s Flood Maps Protect Banks and Mortgages; People, Not So Much

A lot rides on FEMA’s flood maps: zoning laws, land use, building codes, tens of billions of dollars in disaster relief, and the basic sense of safety that comes with knowing where the water will and won’t be during a storm. And one other thing: the entire flood insurance industry. But using these flood maps is like betting at the racetrack with a fifty-year-old form. They’re based on what was, not what will be.

“FEMA flood zone maps are essentially a matter of the past,” says Klaus Jacob, a climate disaster expert at Columbia University. “[The agency was] never asked by Congress to look forward.”

After the Great Mississippi Flood of 1927 — the most destructive in U.S. history, in which more than 640,000 people were displaced by thirty-foot floodwaters — private insurance companies stopped selling flood insurance for forty years.

“And then the developers and the banks said, ‘Whoa, hey, what’s going on? We can’t build any more houses — we can’t give them mortgages if there is no coverage,’ ” says Jacob. In 1968, the federal government created the National Flood Insurance Program. Five years later, Congress passed a law requiring the NFIP to make maps of flood zones. Anyone living in those zones with a federally backed mortgage would have to buy flood insurance. That worked for roughly another forty years.

“Then in 2005 we had Katrina, along with four other major hurricanes, and the NFIP went into a lot of debt,” explains Andrew Martin, who heads FEMA’s risk analysis branch for the New York region. “Like, $17 billion to 18 billion in debt.”

Congress passed the Biggert-Waters Flood Insurance Reform Act of 2012, which jacked up premiums to close the gap. But “people started seeing pretty quick increases,” Martin says, and so in 2014 Congress acted to cap them. Michael Grimm, then a Staten Island congressman, co-sponsored the House bill (roughly 65 percent of the borough’s residents own their homes) while New Jersey Senator Robert Menendez sponsored the Senate version.

Sandy made the costs of this approach painfully clear. When the storm hit, FEMA hadn’t updated its flood insurance rate maps for New York City since 1983, and thousands of homes mapped outside of flood zones were inundated. Sandy cost the NFIP $8.5 billion. By the end of 2014, the program’s debt had risen to $24 billion.

“It’s ultimately, if you are cynical, protecting banks and their mortgages rather than the population,” Jacob says.

While the Department of Buildings continues to use the maps — all new or renovated structures must be two feet above FEMA’s base flood elevations — the city has challenged them, claiming that FEMA’s estimates are incorrect. Martin says that FEMA is waiting on its own report from a panel of independent experts due in mid-October.

“I think we need to find a way as a country to divorce ourselves from this idea that insurance maps, where you buy a one-year insurance policy, should somehow guide investing for thirty years, forty years, fifty years, beyond that,” says Dan Zarrilli, the city’s chief resilience officer.