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 www.birminghamal.gov
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
BACKGROUND STATS NFIP Regular Program March 1981 CRS Program December 1993 900 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
PROPERTIES EXAMINED BY CATEGORY Residential Single Residential 2-4 Family Family Other Residential Non Residential Number of Policies Avg Cost Pre-FIRM Non Primary 256 8 7 0 271 958 Pre-FIRM Primary 391 17 19 0 427 902 Pre-FIRM Non Residential 0 0 0 87 87 3602 Post FIRM Non Primary 7 0 16 53 76 1327 Post FIRM Primary 36 0 0 0 36 582
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)
COST INCREASE EXAMINED BY CATEGORY PRE-FIRM NON-PRIMARY OCTOBER_2013 OCTOBER_2014 APRIL_2015 APRIL_2016-2018 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_2016-2018 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_2016-2018 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
COST INCREASE EXAMINED BY CATEGORY POST-FIRM NON PRIMARY OCTOBER_2013 OCTOBER_2014 APRIL_2015 APRIL_2016-2018 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_2016-2018 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
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
COST INCREASE RESULTS $1,800.00 $1,600.00 Avg. Primary $1,690.48 $1,400.00 $1,200.00 $1,000.00 $800.00 $600.00 $400.00 $200.00 $902.00 Avg. Primary $- 2013 2014 2015 2016 2017 2018 2019 Pre-Firm Primary T-Premium (2014) 2015 2016 2017 2018 Total Premiums $385,009.00 $488,439.29 $554,498.99 $632,271.54 $721,833.51 Average $902.00 $1,143.89 $1,298.59 $1,480.73 $1,690.48
COST INCREASE RESULTS $3,000.00 $2,500.00 Average Pre-FIRM Non Primary $2,686.69 $2,000.00 $1,500.00 $1,000.00 $500.00 $958.73 Average Pre-FIRM Non Primary $- 2013 2014 2015 2016 2017 2018 2019 Pre-Firm NonPrimary T-Premium (2014) 2015 2016 2017 2018 Total Premiums $259,816.00 $416,150.04 $498,067.58 $599,645.34 $728,092.06 Average $958.73 $1,535.61 $1,837.89 $2,212.71 $2,686.69
COST INCREASE RESULTS $9,000.00 $8,000.00 $7,000.00 $6,000.00 $5,000.00 $4,000.00 $3,000.00 Pre-FIRM Non Residential $7,854.03 $3,602.37 $2,000.00 $1,000.00 $- 2013 2014 2015 2016 2017 2018 2019 Pre-FIRM Non Residential
COST INCREASE RESULTS $2,000.00 $1,800.00 $1,600.00 $1,400.00 $1,200.00 $1,000.00 $800.00 $600.00 $400.00 $200.00 $- Avg. NON Primary $1,327.00 $1,698.00 2013 2014 2015 2016 2017 2018 2019 Avg. NON Primary $670.00 $660.00 $650.00 $640.00 $630.00 $620.00 $610.00 $600.00 $590.00 $580.00 $570.00 Avg. Primary $652.00 $652.00 $582.00 2013 2014 2015 2016 2017 2018 2019 Avg. Primary
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
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)
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 1,492 1275 85% 1,176 316 $29,194 5 Kingston / East Birmingham 1,968 1839 93% 1,453 515 $18,763 7 Collegeville 1,202 1175 98% 824 378 $14,167 8 North Birmingham 2,195 1758 80% 1,860 335 $24,333 12 South Pratt 1,700 1370 81% 1,215 485 $26,028 14 Enon Ridge / East Thomas 1,256 1176 94% 887 369 $26,625 19.02 Wahouma 1,145 1000 87% 774 371 $21,311 24 East Birmingham / 1,598 383 North Avondale 1,981 1335 67% $22,247 29 Smithfield 32 Tuxedo / Ensley 33 Ensley 38.02 Green Acres 1,429 1316 92% 974 455 $10,040 479 328 68% 376 103 $21,146 619 574 93% 458 161 $19,070 2,449 2270 93% 2,105 344 $29,114
WHO S IMPACTED AFFORDABILIT Y Census Tract 38.03 Neighborhood (s) Germania Park / Oakwood Place Housing Units Pre- FIRM Units # Pre- FIRM Units % 2,311 2005 87% Occupied Units Vacant Units 1,596 715 Median Household Income $22,923 39 Rising - West Princeton 867 621 72% 40 Arlington - West End 2,054 1719 84% 42 Arlington - West End 1,342 1074 80% 51.01 North Titusville 1,230 1119 91% 52 West End Manor 1,860 1619 87% 56 Eastwood / Crestline 2,541 2008 79% 57.01 Germania Park 1,321 1159 88% 57.02 Jones Valley / West End Manor 1,799 1530 85% 59.05 Roebuck 2,383 2183 92% 59.08 Springlake 1,996 1613 81% 131 East / West Brownville 2,216 1821 82% 133 Roosevelt 1,575 1217 77% citywide City of Birmingham 110,723 85157 77% 679 188 1,654 400 1,008 334 695 535 1,589 271 2,203 338 1,094 227 1,531 268 2,064 319 1,498 498 1,902 314 1,212 363 88,746 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
COST BURDENED HOUSEHOLDS Census Tract Neighborhood (s) Owner Occupied Number Cost Percent Cost Total Persons Number Percent Units Burdened Burdened 1 North Eastlake 2,825 1664 59% 666 306 45% 5 Kingston / East Birmingham 3,660 2795 76% 592 219 37% 7 Collegeville 2,391 2100 88% 307 137 44% 8 North Birmingham 4,127 2536 61% 1053 433 41% 12 South Pratt 2,975 1823 61% 747 238 32% 14 Enon Ridge / East Thomas 2,250 1266 56% 560 155 28% 19.02 Wahouma 2,034 1337 66% 258 119 46% 24 East Birmingham / North Avondale 3,691 2523 68% 343 86 25% 29 Smithfield 1,931 1215 63% 172 100 59% 32 Tuxedo / Ensley 892 727 82% 119 55 46% 33 Ensley 1,021 644 63% 273 122 45% 38.02 Green Acres 6,028 3906 65% 1227 463 38% 38.03 Germania Park / Oakwood Place 3,682 2470 67% 936 343 37% 39 Rising - West Princeton 1,801 1529 85% 163 112 69% 40 Arlington - West End 3,936 3045 77% 470 188 40% 42 Arlington - West End 1,945 1230 63% 406 104 26% 51.01 North Titusville 1,893 1513 80% 99 38 38% 52 West End Manor 4,077 2122 52% 1085 448 41% 56 Eastwood / Crestline 4,439 1635 37% 1409 441 31% 57.01 Germania Park 2,603 1627 63% 672 242 36% 57.02 Jones Valley / West End Manor 3,764 2220 59% 984 361 36% 59.05 Roebuck 5,109 2615 51% 1595 685 43% 59.08 Springlake 3,352 1609 48% 716 256 35% 131 East / West Brownville 4,300 2504 58% 1263 385 31% 133 Roosevelt 3,155 1744 55% 804 272 33% citywide City of Birmingham 205,937 112354 55% 43449 15154 35%
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 2,825 1664 59% 666 306 45% 5 Kingston / East Birmingham 3,660 2795 76% 592 219 37% 7 Collegeville 2,391 2100 88% 307 137 44% 8 North Birmingham 4,127 2536 61% 1053 433 41% 12 South Pratt 2,975 1823 61% 747 238 32% 14 Enon Ridge / East Thomas 2,250 1266 56% 560 155 28% 19.02 Wahouma 2,034 1337 66% 258 119 46% 24 East Birmingham / North Avondale 3,691 2523 68% 343 86 25% 29 Smithfield 1,931 1215 63% 172 100 59% 32 Tuxedo / Ensley 892 727 82% 119 55 46% 33 Ensley 1,021 644 63% 273 122 45% 38.02 Green Acres 6,028 3906 65% 1227 463 38% 38.03 Germania Park / Oakwood Place 3,682 2470 67% 936 343 37% 39 Rising - West Princeton 1,801 1529 85% 163 112 69% 40 Arlington - West End 3,936 3045 77% 470 188 40% 42 Arlington - West End 1,945 1230 63% 406 104 26% 51.01 North Titusville 1,893 1513 80% 99 38 38% 52 West End Manor 4,077 2122 52% 1085 448 41% 56 Eastwood / Crestline 4,439 1635 37% 1409 441 31% 57.01 Germania Park 2,603 1627 63% 672 242 36% 57.02 Jones Valley / West End Manor 3,764 2220 59% 984 361 36% 59.05 Roebuck 5,109 2615 51% 1595 685 43% 59.08 Springlake 3,352 1609 48% 716 256 35% 131 East / West Brownville 4,300 2504 58% 1263 385 31% 133 Roosevelt 3,155 1744 55% 804 272 33% citywide City of Birmingham 205,937 112354 55% 43449 15154 35%
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
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
COMMUNIT Y RATING SYSTEM (CRS) PRE-FIRM NON PRIMARY TOTAL PREMIUM INCREASE COMPARISON CLASS 5 v. CLASS 6 v. CLASS 10 $1,800,000.00 $1,600,000.00 $1,400,000.00 $1,200,000.00 $1,000,000.00 $800,000.00 $600,000.00 $400,000.00 $200,000.00 $573,222.00 $1,662,161.24 $1,411,392.50 $1,362,545.55 CLASS 6 CLASS 5 CLASS10 $0.00 2013 2014 2015 2016 2017 2018 2019
ELEVATION CERTIFICATE (EC) COMPARISON OF PREMIUMS WITH EC VERSUS WITHOUT SAMPLE PREMIUM WITH EC PREMIUMS WITHOUT EC 2014 2015 2016 2017 2018 1 $ 2,051.52 $ 1,026.00 $ 1,631.26 $ 1,957.18 $ 2,361.32 $ 2,872.36 2 $ 1,809.60 $ 1,226.00 $ 1,553.87 $ 1,768.41 $ 2,020.81 $ 2,311.06 3 $ 1,795.66 $ 1,071.00 $ 1,358.64 $ 1,544.32 $ 1,762.77 $ 2,013.98 4 $ 2,030.14 $ 987.00 $ 1,577.87 $ 1,890.44 $ 2,278.02 $ 2,768.14 5 $ 1,730.59 $ 1,081.00 $ 1,371.24 $ 1,558.78 $ 1,779.41 $ 2,033.15 Where FFE is greater than BFE could benefit; cost for EC can be expensive. Cost reduction benefit may not be immediate; be strategic
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
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.
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?
QUESTIONS!
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 205-254-2479 Edwin.Revell@birminghamal.gov
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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 1200 240 $1,204.04 $288,969.60 $380,282.40 $442,339.20 $518,541.60 $611,558.40 LOMA 287 57 $1,204.04 $68,630.28 $90,317.07 $105,055.56 $123,153.63 $145,245.12
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