Jay Walsh grew up along the muddy banks of the Saugus River and has seen plenty of damage from big winter storms, but he says his modest home in West Lynn has never been inundated with flood waters.
Despite that, his property and large chunks of his working-class neighborhood were recently classified as a “high-hazard” flood zone by the Federal Emergency Management Agency. Walsh said the new designation, part of a sweeping revamp of the nation’s flood maps, will lower his property’s value and force him to purchase costly flood insurance, which is required for properties with a federally backed mortgage in high-risk areas.
For those who already have flood insurance, this month’s bills may show rate increases of 25 percent .
“It doesn’t make any sense,” said Walsh, 33, who bought the three-story house next door to the one where he was raised and where his 94-year-old grandmother still lives. “We’ve had flooding in the past, but nothing that bad. This is going to hurt a lot of people in my neighborhood.”
Walsh is one of tens of thousands of property owners across the Bay State who could be affected by FEMA’s nationwide redrawing of flood maps, many of which haven’t been updated since the 1970s. The move is aimed at shoring up the troubled National Flood Insurance Program, which is nearly $24 billion in debt.
Under legislation passed by Congress last year, FEMA is required to redraw the flood-zone boundaries and phase out decades-old insurance subsidies for owners of homes built in high-risk areas before the original federal maps were created.
FEMA has played down the impact of the new law, saying that only about 20 percent of all flood policyholders would be losing subsidies. Premiums for flood insurance depend on a number of factors — including the amount of coverage needed — but range from a low of $400 a year to more than $8,000 in high-risk zones, according to figures on the federal flood insurance website.
But many homeowners find themselves in flood zones for the first time, and facing the likelihood of having to pay hundreds or even thousands of dollars in premiums for flood insurance if they have a federally insured mortgage. Others who already buy flood insurance could see rates increase by more than 25 percent if their properties have been moved from a moderate-risk zone to a high-risk zone.
Lynn City Councilor Peter Capano said the changes will affect some of the city’s poorest neighborhoods, where residents are “just getting back on their feet” after years of struggling with high mortgage payments and other rising costs the economic downturn.
“This is only going to add to the financial burden,” he said. “These aren’t people living in coastal mansions. These are the people who can least afford it.”
Capano is trying to organize neighborhood opposition — the way homeowners in Scituate and other communities did — to fight the proposed changes. Scituate residents created a nonprofit group to contest the FEMA maps, and held a rally attended by Attorney General Martha Coakley, who urged the crowd of hundreds to “make noise” in their communities.
Opposition to the Flood Insurance Reform Act of 2012 is beginning to swell — even as major provisions begin to go into effect — among municipal officials, real estate brokers, property owners, lenders, and a majority of the Bay State’s congressional delegation in Washington.
In a Sept. 26 letter, Senator Ed Markey and other members of the delegation asked fellow lawmakers to postpone approval of the maps and insurance rate increases until a long-awaited study on the financial impact of the new law is conducted.
The delegation also called for a “affordability plan” to lessen the blow of the new flood insurance rules on low- and middle-income property owners.
“I want an affordability fix, not simply an affordability study about impacts of new flood maps,” Markey said. “The fear of rising flood waters should not be compounded by the fear of an unaffordable spike in insurance premiums.”
On its website, FEMA officials explain that the new criteria have brought more properties into the flood zones. FEMA is using a “100-year storm” model where there is a 26 percent chance of flooding over the span of a 30-year mortgage. The new elevations also add homes to zones at risk for coastal flooding or powerful waves.
Along with coastal homes and businesses, and those built near rivers, the new flooding elevations now apply to thousands of properties near lakes and ponds not previously considered at risk.
Federal officials said the changes are needed to prevent catastrophic losses similar to the aftermath of Hurricane Sandy, which flooded much of the Eastern Seaboard last year. But they also said the map changes have less to do with increased risks than with restoring the flood insurance program to financial solvency.
“It’s based more on funding than regional expectations,” said Brian Caufield, manager for FEMA’s map project.
In Lynn, roughly 840 homes are covered by the expanded flood zone, and in Saugus, about 600, officials said. Other towns, like Marblehead, had not tallied the properties affected by the new maps.
Property owners face a deadline of Oct. 17 to appeal their inclusion in the flood zone. They would need an elevation certificate from a surveyor or engineer showing their property is above the so-called base flood elevation — the level at which FEMA considers the annual chance of flooding to be 1 percent or higher. Obtaining a certificate, which can cost from $350 to $2,000 depending on the size of the property, does not offer any guarantee of relief, since it might still show that the property is within the flood zone, according to industry experts.
FEMA officials said they expect to finalize the new flood maps by next summer.
The flood insurance program collects $3.5 billion in premiums each year, but FEMA estimates an additional $1.5 billion is needed from previously subsidized policyholders to get its fiscal house in order.
FEMA estimates that roughly 1.1 million of its 5.5 million policyholders receive subsidies. Under the new law, more than 250,000 of them — business owners, those owning second homes, and people whose properties flood frequently — received rate increases that began this month.
Roughly 578,000 policyholders in hazardous areas will keep their subsidies until they sell their homes or suffer severe, repeated flood losses.
US Representative John Tierney, whose district covers Essex County, said the owners of homes and small businesses affected by the changes are confused about their placements on the maps, and concerned about the likelihood of having to purchase flood insurance.
“Many of them had no warning that this would happen,” Tierney said.
During a community meeting in Lynn’s City Hall on Monday, dozens of anxious homeowners hovered in front of maps of Essex County taped to the wall, trying to figure out whether their properties are in the newly configured high-risk flood zones.
“The maps are very difficult to read,” said Gloucester resident Dave Hodgkins as he studied the map of his neighborhood.
FEMA representatives spent several hours talking with homeowners, and gave a presentation about the new rules and how they will affect those who already have flood insurance or need to get it.
Bob Desaulniers, a regional insurance specialist for FEMA, said one option for homeowners is to elevate their house above the base flood elevation level, which he said would “substantially” reduce their insurance premiums. Raising a single-family home could cost between $40,000 and $100,000.
David Sterling, 72, said he has lived in the same house in Saugus for more than 60 years and it has never flooded in his neighborhood, but FEMA’s new maps put it in a high-hazard zone because of its proximity to the Saugus River. He plans to appeal the designation, but knows that time is running out.
“The maps are wrong, totally wrong,” he said. “These people are damn fools and the politicians are just pointing fingers at each other like little children.”