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Rebuilding Sandy Survivors May Violate Federal Flood Insurance Rules

The determination of exactly where construction officials take their measurements may seem trivial. But the difference between the top of a home’s first floor and its floor joists could be as much as two feet, so homes built in accordance with the state rules but out of compliance with the federal ones could end up costing homeowners significantly more to insure. These inconsistencies also came to the attention of federal officials, who raised them as concerns during the state’s comment period early last year, prior to its adoption of the new rules. In response, the DEP wrote that it “did not, as part of this rulemaking, intend to compare the requirements of the Flood Hazard Area Control Act rules with the [National Flood Insurance Program] or attempt to fully achieve compliance with its standards. The purpose of this rulemaking is to facilitate the safe, efficient and sustainable recovery of New Jersey’s eastern waterfront, which withstood unprecedented damage from Superstorm Sandy.”

“FEMA deals with the entire country, and I know New Jersey sometimes thinks it’s special. And of course we’re special, but we’re no more special than any other state,” said Mark Mauriello, who served as Acting DEP Commissioner from 2008 to 2010. “There aren’t a lot of options in this. The federal government says, ‘We’re willing to have your communities participate in this great program that will help your communities be safer and that will insure structures in these flood-prone communities against those losses.’ These are important federal initiatives, and for the state to have kind of a laissez-faire attitude about it to me is really inappropriate,” he continued. “I can’t really understand it, but I think it just is another example of ‘We’ll do what we want, and to heck with everybody else.’”

To current DEP officials within the Christie administration, the issue has been blown entirely out of proportion. “I think what we’re talking about here is really almost like minutiae,” said spokesman Larry Hajna. “It’s significant, but at the same time, it’s not the end of the world.” He added that the problems are easily fixable, but said there’s really no reason to worry.

“We have two sets of rules that apply in New Jersey,” he explained. “Since all buildings in New Jersey’s flood hazard areas are subject to both the Flood Hazard Area Control Act rules and the Uniform Construction Code, the highest standard always prevails. So we’re confident that people are building to the appropriate elevations.”

NJ Spotlight filed records requests with a handful of shore towns and was unable to find any examples so far where local officials allowed construction that’s prohibited by the federal requirements. But as the Sandy recovery continues, Miller fears that asking local officials to compare various sets of rules and determine which one to follow will inevitably cause problems.

“The state of New Jersey and the region is getting a lot of money for disaster assistance, and some of this money’s being used in rebuilding,” he said. “We don’t want a case where federal dollars are being used on non-federally-compliant construction. And I think that would be a real sore issue with the federal government if they found that money was being spent improperly.”

Indeed, the Federal Emergency Management Agency continues to be worried about this very thing, so last fall it sent a letter to Trenton, threatening sanctions if New Jersey’s Flood Hazard Area Control Act rules aren’t rewritten. These could range from probation -- which would add a $50 surcharge to each resident’s flood insurance policy -- to suspension from the National Flood Insurance Program, which would make federal flood insurance unavailable and also limit some forms of federal disaster assistance.

That would make a lot of homeowners extremely unhappy, and it would also put the brakes on the coastal real estate market, since buyers of homes in flood zones that were suspended from the NFIP wouldn’t be able to obtain federally backed mortgages without being covered by flood insurance.

Of course everyone’s hoping to avert that. In his response to FEMA back in January, DEP Commissioner Bob Martin continued to argue that with two sets of rules -- one of which violates federal standards and one of which doesn’t -- the state is not technically out of compliance. But pressured to comply, he agreed that his agency would go back to the drawing board and review its regulations to ensure consistency.

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