A cu­mu­la­tive headache

Bel­laire home­own­ers sur­prised as dam­age from past floods is counted against them

Houston Chronicle - - FRONT PAGE - By Mark Col­lette

Af­ter Anna Kronzer’s one-story, 1940sera Bel­laire home took on a foot of wa­ter dur­ing Hur­ri­cane Har­vey, news from the city per­mit­ting of­fice came as a shock: Work done years ago by the pre­vi­ous home­owner would put her over a fed­eral thresh­old re­quir­ing her house to be raised to cur­rent stan­dards.

The Fed­eral Emer­gency Man­age­ment Agency re­quires that homes with sub­stan­tial dam­age, in which re­pairs cost more than 50 per­cent of the struc­ture’s value, be brought into com­pli­ance with cur­rent build­ing codes. That usu­ally means el­e­vat­ing the house, which can cost $100,000 or more.

In Bel­laire, where more than a third of the city’s 6,700 homes flooded, the rule comes with a twist: Dam­age as­sess­ments are cu­mu­la­tive, which means even if Har­vey ex­acted only 20 per­cent dam­age, a home­owner could be forced to el­e­vate if the house also had flood re­pairs in 2015 and 2016.

Peo­ple who can’t af­ford it might be forced to tear down and sell, be­cause stan­dard flood in­sur­ance doesn’t cover el­e­va­tion costs.

The rule up­set home­own­ers like Kronzer who weren’t aware of it and had never been told what their prop­erty’s cu­mu­la­tive dam­age to­tal was. It came as a sur­prise in a re­gion where nei­ther the city of Hous­ton nor Har­ris County use cu­mu­la­tive dam­ages. And it puts dis­as­ter-rav­aged res­i­dents, ea­ger to re­turn home as fast as pos­si­ble, at odds with a pol­icy de­signed to get

peo­ple out of harm’s way, thrust­ing city of­fi­cials into an awk­ward po­si­tion.

Har­ris County En­gi­neer John Blount said FEMA tried about 10 years ago to per­suade the county to use cu­mu­la­tive dam­ages, but the county re­fused be­cause there was no way to pro­tect home­buy­ers. State law re­quires sell­ers to dis­close that they know a prop­erty flooded, but it’s un­likely a buyer would be told about the cu­mu­la­tive dam­age pol­icy or how much dam­age had al­ready been counted against the prop­erty.

“How would a buyer know he was $3,000 away from hav­ing to tear a house down be­fore he bought it?” Blount said. “I un­der­stand it from a flood­plain man­age­ment stand­point, but from a prac­ti­cal stand­point you’ve got to pro­tect buy­ers.”

FEMA of­fi­cials did not im­me­di­ately re­spond to re­quests for com­ment.

Don’t make as­sump­tions

Bel­laire City Man­ager Paul Hof­mann is con­ven­ing a task force to study a broad range of flood con­trol is­sues, in­clud­ing cu­mu­la­tive dam­ages and whether to keep us­ing them. He said no one cur­rently em­ployed at the city can re­mem­ber when the pol­icy — which is not man­dated by city or­di­nance — went into ef­fect. Blount sus­pects it hap­pened when FEMA was urg­ing other lo­cal ju­ris­dic­tions to do it.

Last week, Bel­laire loos­ened the pol­icy so that only flood-re­lated dam­ages count. Pre­vi­ously, any im­prove­ments — even cos­metic ones, like the gran­ite coun­ter­tops and wood floors added to Kronzer’s house — would add to the to­tal. The owner of a $100,000 home that had a $25,000 ren­o­va­tion in the past would al­ready be con­sid­ered to have 25 per­cent dam­age be­fore the first drop of rain fell. The idea is to get older homes into com­pli­ance with cur­rent flood codes as the home value in­creases.

City of­fi­cials warned res­i­dents against mak­ing as­sump­tions about how the pol­icy af­fects them. Home­own­ers should work through their sit­u­a­tion with some­one at the city’s per­mit­ting of­fice be­fore de­cid­ing what to do, Hof­mann said. Not every­thing in a con­trac­tor’s bid will nec­es­sar­ily count to­ward the dam­age as­sess­ment, he cau­tioned, and a visit to the per­mit­ting of­fice doesn’t com­mit the home­owner to any course of ac­tion.

FEMA al­lows cities to count cu­mu­la­tive dam­ages — and gives them a break on their flood in­sur­ance for it — be­cause it brings older homes into com­pli­ance faster. That’s of grow­ing im­por­tance in a world fac­ing more fre­quent heavy down­pours, and in a metro re­gion where up­stream devel­op­ment paves the way for big­ger down­stream floods.

It keeps tax­pay­ers from hav­ing to foot the bill for flood dam­age to prop­er­ties that grow rapidly in value, as they do in Bel­laire. The fed­eral flood in­sur­ance pre­mi­ums that home­own­ers pay aren’t enough to cover dam­age. The Na­tional Flood In­sur­ance Pro­gram owes more than $24 bil­lion to the U.S. trea­sury.

“It is not the city of Bel­laire’s in­tent to force peo­ple out of homes,” Hof­mann said. “It is the city of Bel­laire’s in­tent to keep peo­ple safe.”

It’s largely work­ing, ac­cord­ing to data City En­gi­neer James An­drews pre­sented Oct. 2. Of the nearly 2,000 homes that flooded, only about 47, or 2 per­cent, were built to cur­rent stan­dards.

Yet some res­i­dents have told Hof­mann they made it un­scathed through Trop­i­cal Storm Al­li­son in 2001, through the floods of 2015 and 2016, and are will­ing to gam­ble they’ll never see an­other Har­vey.

In­sur­ance dis­counts

Kronzer is now faced with the prospect of tear­ing down and start­ing over, us­ing a com­bi­na­tion of flood in­sur­ance, sav­ings and con­tri­bu­tions from rel­a­tives. She plans to el­e­vate her new home to com­ply with cur­rent codes to elim­i­nate any doubt over the fu­ture of the cu­mu­la­tive dam­age pol­icy.

The pol­icy is an op­tion for cities that par­tic­i­pate in FEMA’s Com­mu­nity Rat­ing Sys­tem. The pro­gram scores cities on a wide range of flood con­trol and pol­icy mea­sures. A com­mu­nity with more than 4,500 credit points is Class 1, earn­ing 45 per­cent off fed­eral flood in­sur­ance pre­mi­ums for homes in the flood plain. A Class 9 city, with at least 500 points, can get a 5 per­cent dis­count.

Bel­laire is a Class 7, with at least 1,500 points and a 15 per­cent dis­count, ac­cord­ing to FEMA records.

A city can get up to 90 credit points for ap­ply­ing a cu­mu­la­tive dam­age stan­dard, de­pend­ing on how long the dam­age tally ac­cu­mu­lates, whether it in­cludes non­flood re­lated im­prove­ments, and other fac­tors. It’s not clear how many points Bel­laire earns for its stan­dard or whether chang­ing it would af­fect the city’s over­all rat­ing and in­sur­ance dis­count. Hof­mann said his staff was look­ing into it.

“From what I un­der­stand, the de­ci­sion we made last week to only in­clude flood-re­lated dam­age in the cu­mu­la­tive costs shouldn’t lower our score or our rat­ing,” he said in an email.

Kronzer said she was never in­formed when she bought the house in March that it al­ready had a cu­mu­la­tive tally against it.

“I get where the reg­u­la­tion comes from,” she said. “They don’t want us to keep flood­ing. The gov­ern­ment doesn’t want to keep pay­ing through in­sur­ance to get us whole again. But it’s frus­trat­ing.”

She thought buy­ing in Bel­laire was a sound fi­nan­cial de­ci­sion. The city of about 18,600 res­i­dents is en­cir­cled by south­west Hous­ton and has a me­dian home value of $710,000, ac­cord­ing to the U.S. Cen­sus Bu­reau.

Be­fore she closed on the house, she talked to neigh­bors across the street who lived there for 40 years. They in­formed her the street had never flooded.

Even if the house had been el­e­vated to cur­rent stan­dards, that wouldn’t have been enough for Har­vey. It still would have taken on 6 inches of wa­ter.

“I get where the reg­u­la­tion comes from. They don’t want us to keep flood­ing. The gov­ern­ment doesn’t want to keep pay­ing through in­sur­ance to get us whole again. But it’s frus­trat­ing.” Anna Kronzer, Bel­laire res­i­dent

Michael Cia­glo / Hous­ton Chron­i­cle

A con­trac­tor moves lum­ber Tues­day into the drive­way of a Bel­laire home that flooded.

Yi-Chin Lee / Hous­ton Chron­i­cle

Bel­laire has shocked home­own­ers by count­ing past flood dam­age against them.

Michael Cia­glo / Hous­ton Chron­i­cle

FEMA al­lows cities to count cu­mu­la­tive dam­age be­cause it brings older homes into com­pli­ance faster. Most of Bel­laire’s nearly 2,000 flooded homes were not built to cur­rent stan­dards.

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