A CASE STUDY ON FLOOD INSURANCE AFFORDABILITY AND MITIGATION IN THE CITY OF BIRMINGHAM, AL. Edwin Revell, CFM

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1 A CASE STUDY ON FLOOD INSURANCE AFFORDABILITY AND MITIGATION IN THE CITY OF BIRMINGHAM, AL Edwin Revell, CFM Deputy Director Planning, Urban Design, and Watershed Management City of Birmingham Depar tment of Planning, Engineering, and Permits

2 OBJECTIVES Overview of Flood Insurance/Risk Stats Review BW-12 & HFIAA-14 Cost Increases Quantify Cost Increases for COB Flood Policyholders Impacts of Quantified Cost Increases at Community Level Possible Mitigation Response Options Final Comments

3 BACKGROUND STATS NFIP Regular Program March 1981 CRS Program December flood insured policies; 4500 flood insurable properties $1.1M Annual Premiums; $165M Policies in Force 785 Pre-FIRM Policies (85-90%) 760 Residential; 140 Non-Residential 735 In Floodplain, 161 Out of Floodplain 6400 Acres of Floodplain

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5 PROPERTIES EXAMINED BY CATEGORY Residential Single Residential 2-4 Family Family Other Residential Non Residential Number of Policies Avg Cost Pre-FIRM Non Primary Pre-FIRM Primary Pre-FIRM Non Residential Post FIRM Non Primary Post FIRM Primary

6 Cost Increases Examined Federal Policy Fee- af fects Pre/Post FIRM policies (PRP) Reserve Fund Assessment- affects Pre/Post FIRM policies (PRP) Base Premium Increase- af fects Pre-FIRM policies HFIAA Surcharge- affects Pre/Post FIRM policies (Primary/Non Primary)

7 COST INCREASE EXAMINED BY CATEGORY PRE-FIRM NON-PRIMARY OCTOBER_2013 OCTOBER_2014 APRIL_2015 APRIL_ FEDERAL POLICY FEE $22/$44 $22/$44 $22/$45 $22/$45 RESERVE FUND ASSESSMENT 5% 5% 10%/15% 10%/15% BASE PREMIUM INCREASE 25% 25% 25% 25% HFIAA SURCHARGE NO EFFECT NO EFFECT $250 $250 PRE-FIRM PRIMARY OCTOBER_2013 OCTOBER_2014 APRIL_2015 APRIL_ FEDERAL POLICY FEE $22/$44 $22/$44 $22/$45 $22/$45 RESERVE FUND ASSESSMENT 5% 5% 10%/15% 10%/15% BASE PREMIUM INCREASE NO EFFECT NO EFFECT 15% 15% HFIAA SURCHARGE NO EFFECT NO EFFECT $25 $25 PRE-FIRM NON RESIDENTIAL OCTOBER_2013 OCTOBER_2014 APRIL_2015 APRIL_ FEDERAL POLICY FEE $22/$44 $22/$44 $22/$45 $22/$45 RESERVE FUND ASSESSMENT 5% 5% 10%/15% 10%/15% BASE PREMIUM INCREASE NO EFFECT NO EFFECT NO EFFECT 25% HFIAA SURCHARGE NO EFFECT NO EFFECT $250 $250

8 COST INCREASE EXAMINED BY CATEGORY POST-FIRM NON PRIMARY OCTOBER_2013 OCTOBER_2014 APRIL_2015 APRIL_ FEDERAL POLICY FEE $22/$44 $22/$44 $22/$45 $22/$45 RESERVE FUND ASSESSMENT 5% 5% 10%/15% 10%/15% BASE PREMIUM INCREASE NO EFFECT NO EFFECT NO EFFECT NO EFFECT HFIAA SURCHARGE NO EFFECT NO EFFECT $250 $250 POST-FIRM PRIMARY OCTOBER_2013 OCTOBER_2014 APRIL_2015 APRIL_ FEDERAL POLICY FEE $22/$44 $22/$44 $22/$45 $22/$45 RESERVE FUND ASSESSMENT 5% 5% 10%/15% 10%/15% BASE PREMIUM INCREASE NO EFFECT NO EFFECT NO EFFECT NO EFFECT HFIAA SURCHARGE NO EFFECT NO EFFECT $25 $25

9 QUANTIFY COST INCREASES Key Information Flood Insurance data obtained from FEMA Flood Insurance based on May 2014 rates Coverage Information not included Key Assumptions Oct 2013 rate increases were reflected in May 2014 rates Total Premium included base premium, fees, surcharges, discounts Pre-FIRM non-residential rate increases star t April 2016 Total premium calculated as follows: Determine base premium Add ICC premium Subtract CRS Discount Add Reser ve Fund Assessment Add Surcharge Add Federal Policy Fee

10 COST INCREASE RESULTS $1, $1, Avg. Primary $1, $1, $1, $1, $ $ $ $ $ Avg. Primary $ Pre-Firm Primary T-Premium (2014) Total Premiums $385, $488, $554, $632, $721, Average $ $1, $1, $1, $1,690.48

11 COST INCREASE RESULTS $3, $2, Average Pre-FIRM Non Primary $2, $2, $1, $1, $ $ Average Pre-FIRM Non Primary $ Pre-Firm NonPrimary T-Premium (2014) Total Premiums $259, $416, $498, $599, $728, Average $ $1, $1, $2, $2,686.69

12 COST INCREASE RESULTS $9, $8, $7, $6, $5, $4, $3, Pre-FIRM Non Residential $7, $3, $2, $1, $ Pre-FIRM Non Residential

13 COST INCREASE RESULTS $2, $1, $1, $1, $1, $1, $ $ $ $ $- Avg. NON Primary $1, $1, Avg. NON Primary $ $ $ $ $ $ $ $ $ $ $ Avg. Primary $ $ $ Avg. Primary

14 QUICK SUMMARY OF COST INCREASES Projected ~187% increase in average annual Pre-FIRM primary premium cost over the next 4 years Projected ~280% increase in average annual Pre-FIRM nonprimary premium cost over the next 4 years Projected ~ 218% increase in average annual Pre-FIRM nonresidential premium cost over the next 4 years 785 Pre-FIRM policies impacted by cost increases ranging from 187% to 280% 25 Census Tracts and 33 City Neighborhoods impacted

15 POSSIBLE AFFORDABILIT Y MEASURES City-wide Median Household Income $31,445 City-wide Median Cost Burden Percentage 30% of Housing Related Expenses 35% median City-wide Median 200% Federal Poverty Level 55% median (ratio of person earning less than 200% FPL)

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17 WHO S IMPACTED AFFORDABILIT Y Census Neighborhood (s) Tract 1 North Eastlake Total Housing Units Pre-FIRM Units # Pre-FIRM Units % Occupied Units Vacant Units Median Household Income 1, % 1, $29,194 5 Kingston / East Birmingham 1, % 1, $18,763 7 Collegeville 1, % $14,167 8 North Birmingham 2, % 1, $24, South Pratt 1, % 1, $26, Enon Ridge / East Thomas 1, % $26, Wahouma 1, % $21, East Birmingham / 1, North Avondale 1, % $22, Smithfield 32 Tuxedo / Ensley 33 Ensley Green Acres 1, % $10, % $21, % $19,070 2, % 2, $29,114

18 WHO S IMPACTED AFFORDABILIT Y Census Tract Neighborhood (s) Germania Park / Oakwood Place Housing Units Pre- FIRM Units # Pre- FIRM Units % 2, % Occupied Units Vacant Units 1, Median Household Income $22, Rising - West Princeton % 40 Arlington - West End 2, % 42 Arlington - West End 1, % North Titusville 1, % 52 West End Manor 1, % 56 Eastwood / Crestline 2, % Germania Park 1, % Jones Valley / West End Manor 1, % Roebuck 2, % Springlake 1, % 131 East / West Brownville 2, % 133 Roosevelt 1, % citywide City of Birmingham 110, % , , , , , , , , , , ,746 21,977 $21,023 $16,345 $19,333 $14,844 $27,113 $50,875 $27,963 $30,655 $37,255 $33,088 $21,224 $25,667 $31,445

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22 COST BURDENED HOUSEHOLDS Census Tract Neighborhood (s) Owner Occupied Number Cost Percent Cost Total Persons Number Percent Units Burdened Burdened 1 North Eastlake 2, % % 5 Kingston / East Birmingham 3, % % 7 Collegeville 2, % % 8 North Birmingham 4, % % 12 South Pratt 2, % % 14 Enon Ridge / East Thomas 2, % % Wahouma 2, % % 24 East Birmingham / North Avondale 3, % % 29 Smithfield 1, % % 32 Tuxedo / Ensley % % 33 Ensley 1, % % Green Acres 6, % % Germania Park / Oakwood Place 3, % % 39 Rising - West Princeton 1, % % 40 Arlington - West End 3, % % 42 Arlington - West End 1, % % North Titusville 1, % % 52 West End Manor 4, % % 56 Eastwood / Crestline 4, % % Germania Park 2, % % Jones Valley / West End Manor 3, % % Roebuck 5, % % Springlake 3, % % 131 East / West Brownville 4, % % 133 Roosevelt 3, % % citywide City of Birmingham 205, % %

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26 Census Tract Neighborhood (s) Ratio of Persons Earning Less than 200% of Federal Poverty Level in 2013 Cost Burdened Households Owner Occupied Units Number Cost Burdened Percent Cost Burdened Total Persons Number Percent 1 North Eastlake 2, % % 5 Kingston / East Birmingham 3, % % 7 Collegeville 2, % % 8 North Birmingham 4, % % 12 South Pratt 2, % % 14 Enon Ridge / East Thomas 2, % % Wahouma 2, % % 24 East Birmingham / North Avondale 3, % % 29 Smithfield 1, % % 32 Tuxedo / Ensley % % 33 Ensley 1, % % Green Acres 6, % % Germania Park / Oakwood Place 3, % % 39 Rising - West Princeton 1, % % 40 Arlington - West End 3, % % 42 Arlington - West End 1, % % North Titusville 1, % % 52 West End Manor 4, % % 56 Eastwood / Crestline 4, % % Germania Park 2, % % Jones Valley / West End Manor 3, % % Roebuck 5, % % Springlake 3, % % 131 East / West Brownville 4, % % 133 Roosevelt 3, % % citywide City of Birmingham 205, % %

27 POSSIBLE IMPACTS Potential rise in foreclosures cost burdened areas, 200% FPL, economically depressed areas, etc. (recent calls/visits) Possible Reduction in Homeownership Possible Increase in Blight Possible Loss of Interest to invest

28 POSSIBLE COST MITIGATION RESPONSE OPTIONS Continue or work to Improve CRS Program Rating Educate residents on possible benefits of a rated policy Work with State and Federal levels of government for funding in the form of grants assistance and low interest loan. Continue to implement higher standards flood protection ordinance Educate residents on possible benefits of retrofitting or property protection measures Continue to participate in mitigation programs that assist with removing existing structures from hazard prone areas Continue to implement Map Correction Program ef for ts Implement Water shed mitigation and/or stormwater management projects

29 COMMUNIT Y RATING SYSTEM (CRS) PRE-FIRM NON PRIMARY TOTAL PREMIUM INCREASE COMPARISON CLASS 5 v. CLASS 6 v. CLASS 10 $1,800, $1,600, $1,400, $1,200, $1,000, $800, $600, $400, $200, $573, $1,662, $1,411, $1,362, CLASS 6 CLASS 5 CLASS10 $

30 ELEVATION CERTIFICATE (EC) COMPARISON OF PREMIUMS WITH EC VERSUS WITHOUT SAMPLE PREMIUM WITH EC PREMIUMS WITHOUT EC $ 2, $ 1, $ 1, $ 1, $ 2, $ 2, $ 1, $ 1, $ 1, $ 1, $ 2, $ 2, $ 1, $ 1, $ 1, $ 1, $ 1, $ 2, $ 2, $ $ 1, $ 1, $ 2, $ 2, $ 1, $ 1, $ 1, $ 1, $ 1, $ 2, Where FFE is greater than BFE could benefit; cost for EC can be expensive. Cost reduction benefit may not be immediate; be strategic

31 MAP CORRECTION PROGRAM An estimated 280 properties have been removed from floodplain or mandatory insurance purchase requirements via City s Map Correction Program efforts. Estimated annual savings without cost increases is $68,000. Estimated annual savings Year 4 with cost increases is $145,000 Program effort: Assist targeted residents in filing Letters of Map Change with the City completing the paperwork at no cost to residents Can benefit multiple policy holders at once Does not suit every property and policy Unique to properties with Lowest Adjacent Grade higher than the Base Flood Elevation

32 BUYOUT PROGRAM EFFORTS Acquired 1200 properties to date Estimated 240 as flood insured Average Annual Flood Ins Premium w/o increases is ~$1,200 Estimated Annual Flood Insurance Savings w/o increases is ~$290,000. Estimated Annual Flood Insurance Savings in Year 4 with cost increase is $612,000.

33 FINAL COMMENTS Quantify Flood Insurance Cost Reduction along with Risk Reduction Use Flood Insurance Data to Make Good Program Management Decisions Update Data Analysis Periodically What measures are good unbiased indicators of af fordability? Develop a prioritized cost mitigation strategy in the community risk factors and context (i.e. comprehensive planning, watershed planning, neighborhood planning) Determine the optimal combination of mitigation options What additional guidance and resources are available from FEMA, HUD, US Army Corps of Engineers to assist?

34 QUESTIONS!

35 ACKNOWLEDGEMENTS Denise P. Bell Katrina Thomas Amber L. Gray Jordan Clark Donald Wilborn Barry Williams Aulton Smith Janice Mitchell Floodplain Administrator Planner Planner Intern Planner GIS Section Manager GIS Analyst FEMA Edwin Revell Deputy Director

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37 MAP CORRECTION PROGRAM Current Estimated Total Flood Total # of Properties Estimated # of Insured Properties Average Flood Insurance Rate Insurance Cost Year 1 Cost Year 2 Cost Year 3 Cost Year 4 Buyout $1, $288, $380, $442, $518, $611, LOMA $1, $68, $90, $105, $123, $145,245.12

38 MAP