▶ 0:11:56The subcommittee on housing and insurance will come to order. Without objection, the chair is authorized to declare a recess of the committee at any time. This hearing is titled mitigation and multiple loss properties factors influencing the high cost of flooding. Without objection, all members will have five legislative days within which to submit extraneous materials to the chair for inclusion in the record. I now recognize myself for four minutes for an opening statement.
▶ 0:12:23I'd like to thank our witnesses for being with us today and I very much look forward to an important discussion focused on the National Flood Insurance Program with special emphasis on mitigation efforts and multiple loss properties. The National Flood Insurance Program or NFIP was established in 1968 in response to repeated flood disasters that resulted in the need for federal disaster relief.
▶ 0:12:46At the time, Congress felt the NFIP could make flood insurance coverage more widely available at reasonable terms for those who needed it. Flood FIP is the primary source of flood insurance coverage for residential properties across the country. The NFIP is managed by FEMA. It's primarily funded through premiums from policyh holders, but premiums charged by the program often do not fully reflect the real flood risk.
▶ 0:13:12When premiums from the National Flood Insurance Fund are insufficient to pay claims, the program has authority to borrow from the Treasury. For most of its history, the NFIP borrowed relatively little from the Treasury. However, after a very destructive hurricane season in 2005, Congress increased the borrowing limit for the program to roughly 20 billion to pay claims.
▶ 0:13:35Then, after Hurricane Standy in 2012, Congress increased that borrowing limit again to 30.425 billion. The NFIP has continued to acrue debt in the years that have followed. Most recently, the program borrowed two billion in additional funds in February 2025, bringing the program's current debt to billion. That leaves just 7.9 billion more in borrowing authority before the program has reached its borrowing cap.
▶ 0:14:04In order to appreciate what is driving the increasing debt for this program, we need to better understand what is driving the risk within the flood insurance program. During this hearing, we have witnesses prepared to speak on two important factors that affect the program's financial health. Multiple loss properties and mitigation. Multiple loss properties are properties that flood repeatedly, often costing NFIP and taxpayers significant money.
▶ 0:14:30According to the GAO, as of 2021, unmitigated multiple loss properties made up about 2.5% of all NFIP policies, but 48% of NFIP claims. We can find some public reporting that tells the story of these properties that repeatedly flood. For example, the Washington Post reported in 2024 that one property in Virginia Beach has flooded an astounding 52 times, including four floods in 2020, two in 2021.
▶ 0:15:00The property received payments totaling around 784,000 from the program. I'd like to submit that into the record without objection. The mismatch between the number of these repetitive loss properties covered by the NFIP and the amount of claims paid out to those homes demonstrates a significant structural challenge for the program. While multiple loss properties constitute a significant driver of insurance claims, mitigation is a potential means of limiting flood damage across the country.
▶ 0:15:29Methods of mitigation can vary, but in general, there are four main strategies for mitigating risk. acquisition, elevation, flood proofing. All of these mitigation tactics can be used to limit flood losses in areas that are otherwise prone to flooding. Any conversation about the future of NFIP will naturally feature some differences of opinion based on regional divides. And that's okay.
▶ 0:15:54Whether you're from an area that floods frequently or one that floods rarely, we all have a unified set of goals. And those are we need to abate the flood risk. High flooding risk means more damages for homeowners and more claims and debt is added to the already severely indebted NFIP. And with that, I yield back. I now recognize the ranking member of the subcommittee, Miss Presley, for four minutes for an opening statement.
▶ 0:16:26Thank you, Mr. Chairman, and thank you to our witnesses for joining us today. The focus of this hearing is on flooding, the cost of the National Flood Insurance Program, but also the real life impacts for households, businesses, and families due to the increase of flooding during the ongoing affordability and climate crisis. Flooding accounts for 90% of all US natural disasters, making it the most common and costly natural disaster. Some communities and properties experience this burden repeatedly.
▶ 0:16:56We refer to them as frontline communities and they are disproportionately communities of color in low-income neighborhoods. Many that were redlined into these floodprone areas and underinvested in. These households are disproportionately located in floodprone areas and face the harshest impacts. These communities all across the United States aren't doing anything wrong, but remain the victims of climate change, driven by corporate greed and government policies denying climate change even exists.
▶ 0:17:27Compounded by the housing affordability crisis, many of these families are now locked into these areas where natural disasters occur most. Take Chelsea in my district, the Massachusetts 7th. This vibrant community was redlined. perfectly good properties were appraised at lower values because appraisers wrote these homes were quote acquired by Jewish people unquote. We cannot deny this history because we all continue to feel the impacts today.
▶ 0:17:56This underappraisal and systemic and systematic devaluation meant homeowners receive less money for their properties. This isn't just an issue in my district. It's an issue across the country where households were redlined, underinvested in, denied loans, and are now being punished for living in those areas and having fewer resources. We need more support for these communities, not less.
▶ 0:18:23Private insurers have increasingly withdrawn from the very communities that need coverage the most due to the escalating costs of climate disasters. We need to support government agencies that often go overlooked but are essential like the National Oceanic and Atmospheric Association, Noah, who operates the Integrated Ocean Observing System, and the Federal Emergency Management Agency, FEMA, who operates the National Flood Insurance Program.
▶ 0:18:51In 2009, under then chairwoman Waters, committee Democrats passed legislation with bipartisan support to reauthorize and strengthen the National Flood Insurance Program, also knew flood insurance program for eight years. Unfortunately, the legislation under consideration today does not go far enough. Severe repetitive loss properties remain a major challenge.
▶ 0:19:17Outdated maps and pricing often fail to reflect true risk, leaving many repeatedly flooded homes unrecognized as high- risk and limiting effective mitigation. Tens of thousands of these homes remain underinvested in and under Now, meanwhile, Trump has no plan to address the growing insurance crisis, is weakening FEMA, threatening to fire up to 50% of the staff there.
▶ 0:19:47This should not be a partisan issue. Flooding impacts red states, blue states, states on the coast, and states in the heartland. Democrats welcome the opportunity to work across the aisle to address repetitive loss properties, expand property level mitigation, and to strengthen federal, state, and local financing tools. I look forward to hearing from our witnesses about their proposals.
▶ 0:20:17I yield back.
▶ 0:20:19Gentleoman yields back. I now recognize the ranking member of the full committee, Miss Waters, for one minute for an opening statement. Thank you very much. Extreme weather events like wildfires, hurricanes, and flooding are causing record damage uh to communities all across America.
▶ 0:20:41But the Trump administration says climate change is a hoax and is dismantling FEMA, the agency charged with managing emergencies. The president is also illegally withholding critical funds and gutting federal programs to help people recover from disasters.
▶ 0:21:00Today, this committee can begin to push back on the president and begin the important discussion around one of those disaster related programs, the National Flood Insurance Program.
▶ 0:21:14So, I hope Republicans will work with Democrats to reform the NFIP, including by bolstering mitigation funding, ensuring affordable coverage, modernizing mapping, forgiven legacy debt, and finally authorizing NFIP for the long term. I yield back the balance of my time.
▶ 0:21:37Gentle lady yields back.
▶ 0:21:42Would the ranking member like a point?
▶ 0:21:44I'd like to be recognized for a point of personal privilege.
▶ 0:21:47General lady is recognized.
▶ 0:21:49Thank you so very much, Mr. Chairman. I'd like to take a moment to recognize Patrina Thomas who has served as the Democrats director of member services for the past four years. Patrina first joined the committee as a staff assistant and was one of my first hires as chairwoman. She was then promoted to be the committee's clerk and then promoted again to director of member services. In each role she has held on to the committee.
▶ 0:22:18Patrina has distinguished herself as a person of intelligence, wit, kindness, and thoughtfulness. She has worked with members and staff on both sides of the aisle to ensure that committee operations run smoothly, that members and staff are well informed about committee activities, and that all of our members can achieve their legislative goals.
▶ 0:22:44So, while we will miss Patrina, we're proud of her accomplishments and wish her the best as she embarks on this next phase of her career. So on behalf of committee Democrats, I'd like to express my deepest thanks and appreciation for all of her work.
▶ 0:23:18If I was in charge, I'd have you speak,
▶ 0:23:22but I'm not. So, you're welcome.
▶ 0:23:29Gentle lady yields back. Today, we welcome the testimony of Dr. Alicia Quente, the uh director of financial markets and community investment at the US Government Accountability Office. Dr. Dr. Diane Horn, a specialist in flood insurance and emergency management at the Congressional Research Service. Mr. Steven Ellis, the president of taxpayers for Common Sense, Mr.
▶ 0:23:52Joel Sketa, a senior attorney at the Natural Resources Defense Council, and Miss Samantha Medllock, the founder and president of Climate Risk Advisors. We thank each of you for taking the time to be here. Each of you will be recognized for five minutes to give an oral presentation of your testimony. Without objection, your written statements will be made part of the record. Just an advisory, we are expecting the full house to call for a vote momentarily. Uh we will allow the uh presenter to finish their testimony.
▶ 0:24:22We will take a short recess and we will reconvene immediately after those votes. All right. Uh Dr. Uh, Penteci, you are now recognized for five minutes for your oral remarks.
▶ 0:24:41Thank you very much, Chairman Flood, Ranking Member Presley, and members of the subcommittee. Thank you for the opportunity to discuss GAO's work on the National Flood Insurance Program and flood mitigation strategies, including those to address repetitive loss properties. My remarks today are drawn primarily from GAO's body of work on NFIP reform, flood mitigation, and property acquisition in reports we've issued between April 2017 and July 2023. My statement will focus on two main areas.
▶ 0:25:11The role of mitigation in addressing NFIP's fiscal exposure from repetitive loss properties and how targeting mitigation could reduce NFIP's fiscal exposure and address Repetitive loss properties are NFIP insured properties that have suffered multiple flood losses of a certain magnitude over a certain period. These properties create significant challenges for the program because they drive a large share of claims and their numbers have increased over time.
▶ 0:25:38FEMA administers several mitigation grant programs that can reduce flood risk for NFIP insured properties. About 77% of property mitigations from 18 1989 through 2025 were funded by the hazard mitigation grant program. FEMA has primarily mitigated flood risk using acquisitions. That is a state or local government purchasing land and structures that flooded from willing sellers and demolishing the structure.
▶ 0:26:07Congress and FEMA could improve the use of property acquisitions to reduce repetitive loss properties by addressing some key challenges. We identified challenges related to the acquisition process as well as options to improve the process. For example, one major challenge is the length and complexity of the acquisition process. According to FEMA and stakeholders we interviewed, it typically takes two to three years to plan a project, apply for and receive a grant, and then purchase and demolish high-risisk properties.
▶ 0:26:38Another challenge is limited state and community capacity. The complex acquisition process is particularly challenging for communities that lack dedicated grant managers or technical staff. And of course, there are financial challenges. The non-federal cost share for an acquisition project, typically 25% of project costs, can deter community and homeowner participation.
▶ 0:27:01Given these and other challenges we heard about, GIO identified a set of options to improve property acquisitions and made recommendations to FEMA and to Congress that they determine whether and how to implement one or more of them.
▶ 0:27:14FEMA agreed with our recommendations and has implemented some, but not all of Turning to the topic of NFIP's fiscal exposure, GAO has reported several times, most recently in 2023, about the unsound nature of the NFIP program because current premium rates do not fully reflect a given property's risk of flooding. As a result, there is a shortfall between the premiums the program collects and the full risk premiums that would need to be collected to keep the program solvent.
▶ 0:27:44In 2023, we estimated that 66% of premiums were not at full risk. We calculated that this would result in a total total premium shortfall of 26.7 billion by 2037. To address this, we recommended that Congress authorize and fund means-based assistance for NFIP policyh holders unable to afford their full risk premiums rather than limiting how much premiums can increase each year.
▶ 0:28:10Among other things, this approach would make the program more transparent and would help address the program shortfall. Targeting mitigation efforts to those properties with the most heavily discounted premiums could also help address NFIP's fiscal exposure. These will dis disproportionately be repetitive loss properties as they generally have greater risk and higher full risk premiums. Mitigating these properties would help NFIP achieve actuarial soundness sooner.
▶ 0:28:38Moreover, other mitigation activities such as elevating, flood proofing, or relocating repetitive loss properties would reduce their risk of flooding and therefore their full risk premium, making those premiums more affordable for homeowners. In conclusion, mitigating flood risk for NFIP insured properties can provide important benefits. We've made a number of recommendations to FEMA and Congress to improve the property acquisition process without addressing addressing mitigation challenges.
▶ 0:29:07The number of repetitive loss properties will continue to grow, increasing costs to NFIP policyh holders and federal taxpayers. However, mitigation alone will not resolve the program's financial challenges. A more comprehensive approach that incorporates, among other things, reforms to both mitigation processes and the program's premium rates is needed. Chairman Flood, Ranking Member Presley, and members of the subcommittee, this completes my prepared statement. I'd be pleased to answer any questions you may have at this time.
▶ 0:29:38Thank you for your statement. Dr. Horn, you are now recognized for five minutes for your oral remarks.
▶ 0:29:44Thank you, Chairman Flood, Ranking Member Presley, and Representative Waters, and members of the subcommittee. Thank you for the opportunity to testify before you today. My name is Diane Horn. I'm a specialist at the Congressional Research Service where I cover federal policies surrounding flood insurance and mitigation of natural hazards. In this testimony, I will focus on FEMA hazard mitigations programs which provide funding intended to reduce the cost and damage of flooding. Thank you.
▶ 0:30:14Congressional funding for flood mitigation is increasing, but not as much as the risk is increasing. There's significant evidence that flood risk from all types of funding is from all types of flooding is increasing. The Noah billion dollar database shows that the cost associated with floods increased from $19 billion in the 1980s to 74 billion in the 2010s. This is due to a number of factors.
▶ 0:30:38Population growth and disasterprone areas, rising property values in these areas, inflation and increasing building costs, inadequate building codes and climatological changes in weather and patterns and storm intensities. Congress has increased mitigation funding in recent years, particularly since 2018. There has been increased funding both for the National Flood Insurance Program mitigation activities and for the other FEMA hazard mitigation programs.
▶ 0:31:05However, this increase in mitigation funding is being outpaced by the factors that caused increased flood risk. Flood mitigation activities can be funded by a number of federal agencies. FEMA is the largest funer. Most people will think of the NFIP first in terms of flood risk reduction. Communities are required to adopt flood plane management standards set by FEMA in order to participate in the NFIP.
▶ 0:31:30And according to FEMA, the NFIP's flood mate managers and standards have saved the nation almost $2.4 billion dollars annually in in reduced losses in flood losses avoided. The NFIP also promotes other activities such as flood mapping, hazard mitigation planning, and the adoption and enforcement of building codes. There are five FEMA hazard mitigation programs that can flood mitigation activities.
▶ 0:31:57Most of these can fund mitigation against all types of natural hazards, but they all can and do fund flood mitigation. The flood mitigation assistance grant program, which is part of the NFIP, is only available to communities that participate in the NFIP in order to reduce or eliminate flood damage to buildings and structures insurable under the NFIP, particularly multiple loss structures.
▶ 0:32:21And the different HMA programs are funded in different ways, but in recent years, we've seen Congress use a number of approaches to increase funding for hazard mitigation, set aside funding for predesaster mitigation in the disaster relief fund, and additional appropriations. And I should point out that other significant funding comes from agencies such as SBA through their disaster loan program and the HUD community development block grant disaster recovery funding, CDBG, DR, and also their mitigation program.
▶ 0:32:50However, publicly available data is not sufficient to ex ass assess the extent to which recent increased funding has reduced flood losses, particularly to multiple loss properties. A number of studies have showed that NFIP insured structures with multiple losses represent a s significant portion of NFIP claims. You will hear about some of those studies in today's hearing. However, if you use publicly available data, we can't say how much of the NFIP claims are due to these properties.
▶ 0:33:20FEMA's open FEMA database, for example, has data on multiple loss properties. It gives details of severe repetitive loss and repetitive loss properties, but not the dollar amount of claims for these particular structures. for uh some although we know how much funding was announced for the different hazard mitigation programs. We don't necessarily know how much has actually been obligated for some programs like the revolving loan fund. We don't have publicly available data. It's not on open FEMA.
▶ 0:33:50So we don't know how much is obligated. In some cases it appears from open FEMA data that no new mitigation program funding has been approved. For example, the hazard mitigation grant program looks like it hasn't had funding approved for about a year. In some cases, it's very clear that there isn't any hasn't been funding available. So, the flood mitigation grant program has had no notices of funding opportunity in fiscal years 24, 25, or 26.
▶ 0:34:18This means that we can't assess whether increases in mitigation funding have advanced congressional policy objectives such as funding more mitigation projects or mitigating more structures. much less whether it's led to reduced loss without access to more recent data. Thank you.
▶ 0:34:35Thank you, Mr. Ellis. I would uh suggest pulling that microphone straight up to your Yeah, there you go. Uh you are now recognized for five minutes for your oral remarks.
▶ 0:34:44Thank you. Good afternoon, Chairman Flood, Ranking Member Presley, and members of the subcommittee. Thank you for the opportunity to testify. I'm Steve Ellis, president of Taxpayers for Common Sense, a national nonpartisan budget watchdog. I've worked on flood insurance and disaster policy for more than three decades, and I've testified before Congress on the National Flood Insurance Program multiple times since joining TCS in 1999. Unfortunately, what I'm here to say today is not new.
▶ 0:35:10The problems we're discussing, multiple lost properties, underinvestment and mitigation, misaligned incentives, failure to learn from the past have all been understood for decades. Taxpayers have been paying the price. What has been missing is action. Let me start with a simple point on flood insurance. The best way the best way to reduce rates is to reduce risk. Risk is both widespread and growing. Nearly 18 million residential properties nationwide face substantial flood risk.
▶ 0:35:38As of February of last year, the NFIP was $22.5 billion in debt to the Treasury and is expected to continue losing money. That doesn't include 16 billion in debt that was forgiven in 2017. In total, taxpayers have borne roughly $40 billion in costs. We've known for years that multiple loss properties, especially severe repetitive loss properties, account for a significant share of claims. And importantly, we know where they are.
▶ 0:36:04One study found that each year between 2012 and 2021, about 1,200 severe repetitive loss properties and nearly 5,000 repetitive loss properties were newly identified. It's on government, too. Buyouts are slow or incomplete, leaving homeowners feeling trapped. There is little planning for inevitable floods and mitigation and buyouts are done a property at a time instead of entire neighborhoods. This is a failure to act on what we already know and to help people get out of harm's way because the evidence is clear.
▶ 0:36:34Mitigation works. Every dollar invested in mitigation saves multiple dollars in future disaster costs. Put simply, it's cheaper to prevent damage to than to rebuild after it. We have proven tools, strategic buyouts done at scale, elevation and flood proofing, relocation, communitywide mitigation, including green infrastructure. But we are not using these tools consistently. The brick program created in 2018 to strengthen predesaster mitigation was a step in the right direction. But it has been stalled until recently.
▶ 0:37:03And that is a classic case of being a pennywise and a pound foolish because taxpayers will pay one way or another. The question is whether we invest upfront in mitigation or continue paying far more after disasters. Regarding pricing, risk rating 2.0 is an improvement because it better reflects actual property level risk. Price is one of the most important ways to communicate risk and influence behavior.
▶ 0:37:26Artificially suppressing rates encourages development and redevelopment in high-risisk areas shifts costs onto taxpayers and misleads homeowners about the dangers they face. The answer is to provide targeted means tested assistance outside the rate structure. Improve transparency on around rates. Expand participation especially through a stronger private market. When homeowners are learning about bundling flood insurance with home and auto from a gecko or flow or mayhem or emu, more people will be protected.
▶ 0:37:58Mapping must be updated using the best available technology. It is too often failed in risk communication. Homeowners believe that they are if they are not in the special flood hazard area, they don't need flood insurance until they sadly find out that they do. We also need to learn from failure. When when there's a relatively small aviation accident, the NTSB investigates and issues recommendations. But after major disasters, despite billions of dollars in federal spending, we don't have a comparable process.
▶ 0:38:27A national disaster safety board or similar independent process could provide fact-based analysis and recommendations of what went wrong and how it can be fixed or what would or what went right and can be applied elsewhere. Finally, reauthorization. Instead of another short-term extension or lapse, the upcoming NFIP reauthorization is an opportunity to fix long-standing structural problems and provide stability. The problems we're discussing today are not new.
▶ 0:38:53We know where the highest where the highest risk properties are that mitigation works that risk price riskbased pricing is essential that current policies lead to rebuilding over risk reduction. The question is not what to do. The question is whether we will do it. If we want to lower flood insurance rates, we must lower flood risk. That means investing in mitigation, aligning incentives, improving pricing, expanding coverage, and learning from failure. Thank you for the opportunity to testify. I look forward to your questions.
▶ 0:39:22Thank you, Mr. Ellis. Mr. Scatter, I'll ask you to do the same with your microphone. Make sure it's up there. There we go. You are now recognized for five minutes.
▶ 0:39:31Good afternoon. Good afternoon, Chairman Flood, Ranking Member Presley, and members of the subcommittee. Thank you for the opportunity to speak today. My name is Joel Scattera, and I'm a senior attorney at the Natural Resources Defense Council. Flooding is the most common natural hazard in America. It happens in every state, and the danger is only growing. Congress created the National Flood Insurance Program to protect people and reduce flood damage nationwide. But the data tell a troubling story. The program is falling short. Here's one number that says it all.
▶ 0:40:02Since the NFIP was created in 1968, nearly 250,000 properties have flooded repeatedly. And that number grows every single year. We call these repetitive loss properties. They represent some of the most floodprone homes in our country. And yet only 16% of them have ever received any mitigation assistance. The problem is even worse for the most severely affected homes, what we call severe repetitive loss properties or SRLPS.
▶ 0:40:28These homes have floated in an average of five times each of uh each. They make up less than 1% of all NFIP policies, but they've accounted for over 10% of all claim payments in the program's history. Between 2018 and 2022 alone, the number of SRLPS grew by more than 7,000, but only 630, I'll repeat that, only 630 received help to reduce their flood risk. We are falling further behind every year, and the burden doesn't fall equally.
▶ 0:40:57Rural and low-income communities bear the brunt of flooding and have the least access to resources to recover. This is a crisis that's hiding in plain sight. So, how do we solve this problem? I urge Congress to focus on four reforms. First, increase flooding for flood mitigation. Make it faster and easier to access. Right now, it can take more than 5 years between a flood and the completion of a FEMA funded buyout. Five years. That's not disaster relief. That's purgatory.
▶ 0:41:25Congress should allow flood insurance to be used directly for buyouts, cutting through the delays that currently make this option inaccessible for many homeowners. We should also reduce the cost share burden on rural and underserved communities which currently can't afford even the portion of the federal grants to fund buyouts. Second, update our flood maps. Over 63,000 repeatedly flooded properties sit outside FEMA's mapped high-risisk areas. FEMA's current maps reflect the past, not the future. They don't account for changing development patterns nor changing rainfall patterns.
▶ 0:41:55Congress should require FEMA to incorporate future flood conditions. Congress should also require FEMA to map with greater accuracy. FEMA flood maps represent the 1% annual chance flood at the 50th percentile confidence, meaning there's a 50% chance that flooding could occur beyond that so-called 100-year flood plane. That's the flip of a coin. We are making development decisions based on the flip of a coin. When 40% of NFIP claims come from properties outside the map flood zone, we clearly have a mapping problem.
▶ 0:42:24Third, update the NFIP's building standards. The en the minimum flood plane development standards haven't been compre comprehensively updated since the 1970s. Meanwhile, 18% of our most severely flood damaged properties were built after these standards were adopted. Meaning they were supposed to be safer, but they're not. We need higher freeboard requirements, stronger standards for critical infrastructure, and rules that reflect the science of what's coming, not what's already happened. Fourth, give home buyers and renters the right to know their flood risk.
▶ 0:42:54Right now, in many states, a seller can hand you the keys to a home that has flooded multiple times and never say a word. A study that found a study found that home buyers of previously flooded homes can expect to face on average more than $55,000 in flood damages over the course of a 30-year mortgage. That's not a footnote. That's a financial catastrophe waiting to happen to most families. FEMA itself has said that states with strong flood disclosure laws have higher rates of flood insurance. Congress should make flood disclosure a condition of participating in the NFIP.
▶ 0:43:24The bottom line is this. Flooding is getting worse. The communities most at risk have the fewest resources to protect themselves. And the program meant to help them is falling short. Congress has the tools to fix this. More accessible flood mitigation funding, climate updated flood maps, modern building standards, and the simple transparency to let people know when they're walking into a home whether it has flooded in the past. Thank you for this time.
▶ 0:43:51Thank you very much, Miss Bedlock. You are now recognized for five minutes for your oral remarks.
▶ 0:43:56Thank you, Chairman Flood, Ranking Member Presley, Chairman Hill, and Ranking Member Waters, and members of the subcommittee. Thank you for the opportunity to testify on the challenges of flood risks and costs. I'm Sam Medlock. I appear today in my individual capacity and do not represent any Floods are among the most frequent and costly disasters in the country. The National Flood Insurance Program underwrites more than a trillion dollars in coverage serving millions of American policyh holders.
▶ 0:44:25Yet, the program is under profound strain. The NFIP is burdened by structural designs that rely on debt to operate, requiring repeated congressional action to forgive that debt or to raise borrowing authority. Premiums are rising beyond reach of families who can least afford to be um and uh who and when disasters strike and the underlying risk continues to grow.
▶ 0:44:54At the heart of the program's dysfunction is a small number of properties driving enormous losses. As we've heard from the panel today, the figures are staggering and And yet, a DHS Inspector General audit found that more than 70% of severe repetitive loss structures remain unmititigated. That's 27,000 homes. We keep paying. The risk keeps rising and the debt keeps climbing.
▶ 0:45:23So, it is urgent to reform the NFIP to reduce the growing risks and costs of flooding. First, we must prioritize hazard mitigation genuinely and urgently and focusing on these multiple loss properties. investments in predesaster mitigation um return orders of magnitude uh on those investments um with the adoption of flood resilient codes and standards generating even greater returns.
▶ 0:45:53So we know that for every dollar that we spend on hazard mitigation, we're getting a return of $6 to 7. um for investments in advancing resilience-based codes and standards, we can get returns of more than $10 for every dollar invested. So, we know what works. Communities that have plans and projects ready to go need funding to implement those projects to mitigate hazards on the ground.
▶ 0:46:18Underresourced communities that are falling behind need a strong federal partner to help develop plans to buy down risk through community-led projects. Second, it is necessary to address the debt. The NFIP's $20 billion burden isn't just an accounting problem. It distorts premiums. It constrains investment. It makes affordability even harder. This cycle of debt reflects catastrophic storms like Katrina, Sandy, and Harvey, but not actuarial failure.
▶ 0:46:48Congress should forgive the debt and reset the NFIP with structural reforms so the program can price risk rationally and avoid future debt. Third, we must protect affordability. The NFIP is taking needed steps toward actuarial soundness, tying ratings more closely to risk and correcting a long-standing structural inequity. Under the legacy system, lower value homes were effectively subsidizing higher value ones.
▶ 0:47:17But accurate pricing only works if risk is reduced. Premiums that are sound but unaffordable will drive households out of coverage entirely, shifting those costs back to taxpayers through disaster assistance. We need means tested assistance and robust investments in technical and financial assistance at the pace and scale to meet this growing and urgent need.
▶ 0:47:41The legislation noticed for today's hearing reflects, I believe, a shared recognition that we should not indefinitely subsidize risk, but we must actively manage the transition out of it. Restricting coverage without investing in buyouts, relocation, and mitigation simply moves costs somewhere else onto families and disaster assistance accounts. The path forward requires three things working together. Affordability protections for households at greatest risk and need.
▶ 0:48:10aggressive investment in hazard mitigation and insurance structures that signal and reduce risk. Without this alignment, we risk trading one set of challenges for another. But with it, we have an opportunity to reset the NFIP on a more sustainable, equitable, and forwardlooking path. Thank you. I welcome your questions.
▶ 0:48:31Thank you for your testimony. Two items for the record. One is a statement of the National Association of Mutual Insurance Companies to this committee dated March 26, 2026. And the second is a statement of the American Property Casualty Insurance Association dated the same date. Without objection, both are received. For what purpose does the gentleman uh from Arkansas, chairman of the full financial services committee, seek recognition?
▶ 0:48:55Mr. Chairman, I'd like to uh have a point of personal privilege.
▶ 0:48:59Gentleman is recognized. I want to add my uh thanks and appreciation along with that of our ranking member of the full committee to Patrina Thomas for her outstanding contributions over many years to the to the committee. She's been a just an incredibly bright spot in a dreary location here at House Financial Services Committee.
▶ 0:49:21She's always got a smile on her face and she's always worked with the minority of the majority to have a good outcome for our committee and I wish her well in her future and thank you for your service to the committee. Y back. We'll now turn to member questions. I recognize myself for five minutes for questioning. Uh Mr. Ellis, in my opener, uh I spoke about homes that flood very frequently, such as one in Virginia Beach that is flooded dozens of times.
▶ 0:49:51In your testimony, you described some of these homeowners as trapped. Can you help us understand why a homeowner in one of these very floodprone properties might not move on their own? I understand why many homeowners wouldn't want to leave their home, but we also need to make sure we're protecting the Absolutely, Chairman. I mean, that's what Taxpayers for Common Sense is all about is protecting taxpayers. And I think that that we we may be looking at two different instances.
▶ 0:50:17I mean, one instance is this homeowner in Virginia Beach where I'm assuming is it's a it's a relatively valuable property, but in other places, you're talking about homeowners that are in maybe not as valuable properties and that the community isn't poised to uh tackle um buyouts right away. Then it takes months, they start rebuilding their homes and then they become sort of trapped in it. They're not getting enough uh funding to be uh to to move out of there. And so I think it is looking at these as case by case basis.
▶ 0:50:45And then also we need to make sure that our disaster assistance is provided in a sliding scale that essentially uh rewards communities that that are planning ahead and and for these inevitable disasters because we know a property that has flooded before is likely to flood again and a property that's flooded multiple times is is almost certainly going to flood again. All right, next question. This is for Dr. Horn, Dr. Kley, and Mr. Ellis.
▶ 0:51:08What does the data say about how effective the money we have already obligated for mitigation has performed over time for reducing risk? Let's start with uh Dr. uh Khackley.
▶ 0:51:25Could could you repeat the question? I'm not sure.
▶ 0:51:27What does the data say about how effective this mitigation money that we've handed out has been over time? So I don't think that we have done work that looking specifically at at the effectiveness of the program over time. We've looked at at um just how many properties have been able to be mitigated and we've looked at the the um challenges to mitigation and acquisition in particular, but we have not done that that last step of uh effectiveness.
▶ 0:51:56But maybe one of my colleagues here,
▶ 0:51:58Dr. Horn, you might have to pull that microphone right up to your face there.
▶ 0:52:01Yes. Thank you very much. You could all tell it was my first time.
▶ 0:52:04You're doing great. What do you What What's your answer to that?
▶ 0:52:07So, the most recent funding, it's not actually easy to tell the big increases that we've seen in the last few years. And one of the reasons for that is simply that the data sets that are available, at least publicly available, don't tell you what the claims have been. So, that property in Virginia Beach, and I used to live in Virginia Beach, I'm pretty sure I know what road it's on.
▶ 0:52:30we don't know how much they've actually received in claims up to the moment and the reason for that is that's in a completely different data set. So FEMA can provide that information but in general if you wanted to look at what was publicly available. The other challenge I think with looking at the effectiveness of mitigation is that unless you buy the property out you're not guaranteeing that it will not flood again. If you actually buy the property out and nobody's there then it won't flood.
▶ 0:52:59But otherwise, you might elevate a property or do something and then it doesn't get hit by a storm for a long time. So, it's not easy to attribute current actions if there hasn't been a current flood to see the impact.
▶ 0:53:13Mr. Ellis, briefly,
▶ 0:53:15yes. Uh, Sherman, I would echo what uh Dr. Horn has said about the availability of data and then also about buyouts being permanent mitigation. Um, but I would also flag that not all mitigation is created equal. uh that certainly a buyout is more permanent, but then we also have issues and I believe it was in um uh Dr.
▶ 0:53:34Kekley's testimony and the written testimony about checkerboarding and how it's only affect you know not buying out entire uh subdivisions and so you actually aren't really mitigating the risk nearly as much as you could but then also that that that you know the mitigation dollars go further in certain areas and less further in other areas simply because of the cost of of goods and services.
▶ 0:53:54Okay. And that leads to my next question. At what point does it make sense just to buy the homeowner out? And and do we find a situation, you know, you're on Virginia Beach, you got a great view, you've got all this stuff going for it. There's this government program. It's always going to be there. You're always going to get your premium, your uh as long as you're paying your premiums, you're going to have that coverage. Are are people gaming the system or they're like, "This is great. They'll they'll fix my house every three years and we can stay right where we're at." What do you think, Mr. Ellis?
▶ 0:54:23Sadly, I think you're right, Mr. Chairman. And I think that that those are cases where we need to be removing these properties out of the flood insurance program. Taxpayers shouldn't be rebuilding and rebuilding and and in these instances. Other ones are different, but certainly there are people that abuse the system just like any other system.
▶ 0:54:38Is there an inspector general that looks at this stuff?
▶ 0:54:41The the Department of Homeland Security Inspector General will be the only one. There isn't a separate FEMA inspector
▶ 0:54:46Okay. Thank you very much. All right. Uh the uh ranking member from Massachusetts, Miss Presley, is now recognized for five minutes.
▶ 0:54:55Thank you, Mr. Chair. The frequency of floods in Boston has tripled in the past few decades. For the people I represent in the MA7th, uh that is not an abstract statistic. It means higher costs, lost homes, and long-term trauma. We're living in an environmental justice crisis made worse by Trump and Republicans who insist on rolling back climate resilience programs and the harm falls disproportionately on marginalized people. Mr.
▶ 0:55:20Scotta, we know communities of color in low-income neighborhoods face repeated instances of flooding threatening safety, stability, and affordability. What are some of the contributing factors?
▶ 0:55:31Thank you for your question. Um, one of the contributing factors has been red lighting. As you mentioned earlier, uh there were multiple studies conducted um by organizations like Redf fin that showed uh redlinining had directly led to communities of color being put into these high flood high-risisk flood zones. Um other issues are that uh in certain areas um lower valued homes are all people can afford and the reason why they're lower valued is because they're in floodprone uh zones.
▶ 0:55:58And so it's really important that when we do mitigation funding, we are targeting those homes because just providing insurance doesn't stop flooding from happening. We really need to get people out of harm's way, whether it's through buyouts, through elevation, through other means. Thank you.
▶ 0:56:13Thank you. And and I would uh add to that list systemic divestment, structural racism, a lack of affordable housing uh to that list. So, when we say communities of color in low-income neighborhoods are overexposed to flood risk, this is what we mean. Families and workers in places like Chelsea and Dorchester are living on the edge of an economic and climate disaster. In fact, in East Boston alone, twothirds of buildings facing future flooding are mixed use.
▶ 0:56:42So, that means both homes and businesses are at risk. Families could see their homes and their livelihoods damaged or completely disappeared. So this will cost millions of dollars, hundreds of jobs, especially in transportation, food service, and accommodations, the very sectors that sustain our communities. So I want to talk about solutions.
▶ 0:57:01In Massachusetts, less than 2% of the state's roughly 3 million housing units carry the National Flood Insurance Program coverage, leaving most homes uninsured for floods. We need to ensure people can keep coverage and protect their homes. Miss Kackley, what does GAO recommend to help low-income homeowners in places like my district keep an FIP coverage that is affordable?
▶ 0:57:31Thank you for the question. Um we are actually doing work right now on the um the flood insurance protection gap um because your your concern is is valid that that uh um there are very many people in this country who are at risk of flooding but do not have um flood insurance of any kind either through NFIP or through um private insurance.
▶ 0:57:53And so we are looking right now at what is the available evidence about um the extent to which consumers purchase flood insurance, the financial effects of uh being uninsured, um factors that uh that um influence whether consumers will purchase flood insurance and then the actions that consumers that would increase uh consumers purchase of flood insurance and that work will be will be um available later this this year. Um
▶ 0:58:21thank you. I think it's important to make plain for folks watching at home that the consequences of the proposals that are before us right now, this would further strip flood insurance coverage. So, I just want to make sure people understand that. Miss Horn, in a a sentence or two in my remaining minute here, what would it mean for homeowners if severe repetitive loss properties were barred from NFIP coverage, especially in those older coastal
▶ 0:58:46Thank you. Thank you for the question. the they always have the option of trying to buy insurance in the private market, but the likelihood is that that would be difficult to obtain or potentially just so expensive that they would not receive they wouldn't be able to buy it without access to some form of insurance.
▶ 0:59:06They would be reliant either on disaster assistance if that is forthcoming or state assistance or they would not be getting assistance to help with recovery from floods. Thank you. At this very moment, what we need are sol more solutions and less problems. So that's why we have to stop cutting FEMA's workforce. We have to stop defunding community grants. We have to stop allowing corporations to poison the environment, exacerbate the climate crisis.
▶ 0:59:33Congress needs to pass legislation that helps frontline communities and advances environmental justice. I don't believe that homeowners should be p punished by the government because a flood happened. Our charge is clear. center equity, strengthen resilience tools, and ensure families who are higher risk are covered at a price that they can actually afford. Thank you. I yield back.
▶ 0:59:57Gentlewoman yields back. The gentleman who is also the chairman of the full financial services committee from the great state of Arkansas, Mr. Hill is now recognized for five minutes.
▶ 1:00:07Thanks, Chairman Flood, and appreciate holding this important hearing. M Miss Kley, we may start with you briefly. The GAO had a report out after Katrina and that was a subject of a hearing in this committee probably 10 years ago, but it asserted that somewhere just under a billion dollars of mitigation money given to the state of Texas and the state of Louisiana was found to be wasted.
▶ 1:00:35In other words, the money was sent to parishes and counties for people to raise their houses out of the flood plane. So Joe gets $15,000 to raise his house. And the point of this GAO study was they didn't do it and they didn't have any accountability on seeing it done and therefore GAO reported that that was money, you know, not properly allocated. Do you recall that study?
▶ 1:01:04I I it was not a study that I did was probably a different part of of GAO because we have there are folks that do disaster assistance work in in a just a different um
▶ 1:01:14but it's an example that here you are nearly a billion dollars that could have been spent in so pre you know event
▶ 1:01:22You know and so that that's that's a key point I think for us to consider. Mr. Ellis. Um, there's an old economic premise that I'm sure is well known to you with your uh bias towards highquality market economics. It goes something like this. When in a hole, stop digging. So, I'm curious of these all these properties that have been cited as repeat properties.
▶ 1:01:47How many of them, like in your example of between 2011 and 2020 or whatever the example was, how many of those were recently approved by a state or local jurisdiction as opposed to being a historic uh site? You any idea on longevity of
▶ 1:02:06Uh, Mr. Mr. Chairman, that was a a Rand uh corporation study and um I don't recall right off the top of my head whether they were uh just eventually became severe repetitive or repetitive loss or whether they were historic properties. I'm not sure.
▶ 1:02:20This is this is again a major issue for this committee which is the federal taxpayers are subsidizing state and local counties and city mayors who are interested in economic development and property taxes and they're approving uh people to build houses up in one-way ravines with no fire suppression in Los Angeles County or they're building in flood planes and they shouldn't be building or maybe not at the density at which they're building and under the conditions.
▶ 1:02:47Is that a fair description of what's happening in America today?
▶ 1:02:51Certainly, Mr. Chairman, and I can add to that. I also think about Houston where you had Ike come through and then just years later, you had hurricane Harvey and some of the same properties flooding and these are areas where we should have learned from that disaster. And it gets back to my comment about having a disaster uh a national transportation safety board for
▶ 1:03:08Yeah. So after Katrina, I was involved with a group that built houses in Lome, Louisiana, which is an unincorporated area on the shores of Lake Pont Train. Probably uh uh in terms of sea level, minus 6 in, I would guess, something like that. And uh none of the people that we helped rebuild their houses had a mortgage because these are houses they inherited from, you know, somebody in their family. And this is a floodprone area and they live in a floodprone area.
▶ 1:03:38Uh but of all the houses that we've repaired, only one was raised with mitigation dollars. And my question is, should the people should the state and local governments require flood insurance for people even if they don't have a mortgage interest? Who wants to answer that question? I mean, this is the state and local governments need to take responsibility here. This can't be Uncle Sugar. And by the way, we didn't have flood insurance before Camille in 1968. So, you are on your own.
▶ 1:04:08This is a modern 50-year-old issue here, trying to help Americans have access to flood insurance, which I which I get. I get the premise of it. But where is the state and local responsibility here? They create more risk to the portfolio. They don't mandate mitigation and they don't require people who we are going to rebuild their house, federal taxpayers, from having flood insurance even though they don't have a federal banking
▶ 1:04:34Mr. Mr. Chairman, I'm all for attaching strings to federal assistance. You can either decide not to take it or you can take it and you can actually be responsible to taxpayers. And that's certainly how we've looked at disaster spending and which is a other committee's jurisdiction, but nevertheless, they're very intertwined issues. And so certainly there has to be some local and state responsibility as we approach this and that Uncle Sam shouldn't be Uncle Sugar shouldn't be Uncle Sucker should be actually providing assistance in in a strategic way and encouraging communities to provide the
▶ 1:05:04I appreciate that. Thank Thank you, Mr. Jose. I just want to conclude, Mr. Chairman, by saying that if we had that sort of discipline, you would attract more private insurance into this market. Yield back.
▶ 1:05:13Gentleman yields back. I do want to renew my interest in working on an FIP bill with the ranking member as it would be appropriately called flood waters. I now recognize the ranking member of the entire f uh financial services committee from California, Miss Waters, who is recognized now for five minutes.
▶ 1:05:37Thank thank you very much, Mr. Chairman. I uh of course have been just listening to um the conversations about FEMA and thinking about uh the reauthor the last reauthorization was bigger waters.
▶ 1:05:54Me many people thought we were saying bigger waters uh but the these are the names of of course bigger than waters and now we're talking about the president of the United States wants to dismantle FEMA and talk about turning it over uh to private interest. It is very hard for me to even think about the dismantlement of FEMA.
▶ 1:06:22As a matter of fact, I can remember Katrina when I and Jesse Jackson and Cleo Fields went to the airport and picked up folks at the airport, some of whom had medical problems and couldn't get to doctors. And we drove all across the state picking up people off the highway and finding shelters for them. And here we are with a war in Iran.
▶ 1:06:47And the president just asked us for $250 billion dollar I believe in order to pay for the war. And that doesn't count the billions that it cost when he first started the war. It is inconceivable uh that we know that flooding is inevitable and that we'll have more Katrinas and more flooding all over this country and the president of the United States wants to get rid of it.
▶ 1:07:16Well, I want to tell you, FEMA uh has a deficit. Pay it off. Forget about making them pay it. They can't pay it. Uh number one, we should strengthen FEMA. Our mapping is behind about 20 25 years. I would say we need to spend the money on mapping so that we can indicate the flood zones and mitigation.
▶ 1:07:42We have never seriously indulged on mitigation in this country and we have found that there are new technologies uh that can create all kind of mitigation that will help us to reduce the damage to floods. But we're talking as long as this president is president of the United States, we're not going to get it done. So when we talk about what are the answers, the answer is getting rid of the president. Uh, and let's be real. Let's be serious about it.
▶ 1:08:12He doesn't give a darn. He doesn't give a darn about the loss of property and the loss of lives. Why he's thinking about private privatizing, I don't know, but it must be some money in it for him because everything he does is about money. That's enough said. Thank you people for coming here today uh for helping us to even dig deeper into what is needed and helping us to understand uh why it is so important to have FEMA.
▶ 1:08:38I appreciate your work but it's for not if this president remains in office. Thank you very much.
▶ 1:08:45Gentle lady yields back a vote in the house has been called. Pursuant to the previous order, the chair declares the committee in recess subject to the call of the chair. We will reconvene 10 minutes after the last vote in the series has been called. The committee stands in recess.
▶ 1:41:32The m the committee will come to order following our recess. I now recognize the gentleman from Wisconsin, Mr. Fitzgerald, for five minutes.
▶ 1:41:40Thank you, Chairman. Uh Dr. Kley based on GAO's work uh what are the primary drivers behind the concentration of NFIP losses among repetitive and severe repetitive loss properties and why has uh this issue persisted despite years of policy attention.
▶ 1:42:08So the concentr the your question is what is the the reason for the concentration of NFI of severe repetitive loss properties?
▶ 1:42:17Yeah. I mean it's received a lot of uh discussion and attention and I'm still wondering why we find ourselves in that
▶ 1:42:24Yeah. Well, because the program allows them them to remain in the they're they're still in the program and and uh and there's if you were to remove severe repetitive loss properties from the NFIP program, which would which would solve the problem on one side, it puts um people in a position where they may not be able to get um uh flood insurance at all.
▶ 1:42:47And then you also have the the uh the issue if if they have a federally backed mortgage, they are required to have um man uh a flood policy. So you're you're they're basically between a rock and a hard place if they're if they're not in the program.
▶ 1:43:03Very good. So a change there could have a significant result.
▶ 1:43:08A change in that category could have a significant result on where we're at. change a change in in um how you deal with se severe well repetitive loss properties and severe repetitive loss properties can have a a significant uh impact on the program. It it won't solve the problem though the problem of of NFIP being insolvent is is beyond just those kinds of properties and goes to the need for more comprehensive reform.
▶ 1:43:36Very good. Thank you Dr. Horn. How well does the current NFIP pricing structure reflect the actual flood risk uh particularly uh for the properties that have experienced the multiple losses which we were just discussing?
▶ 1:43:54Thank you. It depends very much on the individual property because historically the Congress directed that certain policies would be at less than full risk based rate. So under risk rating 2.0 you know the new pricing policy people are moving towards their full risk base. FEMA refers to this as the glide path but Congress has actually put a limit on how much their premiums can be increased each year.
▶ 1:44:19So for primary residences they can only be increased at 18% per year for severe repetitive loss the ones that we've been talking about it could be increased at 25% per year but what we don't know is for an individual property how long that glide path is. So Jo I think said that it was going to be something like 2037 before 95% of policies were paying the full risk based rate.
▶ 1:44:44So it's it's just going to be very variable depending on how far below their full risk based rate of particular and policy is right now.
▶ 1:44:54Very good. Thank you. Um and then Mr. Ellis uh I wanted to just talk a little bit about the taxpayer liability ask you a question on that. Um, I I know this is maybe overly broad, but what policy tools such as limiting coverage for SRL properties or expanding buyouts um would most effectively reduce the taxpayer liability. Does do you have any thoughts on that?
▶ 1:45:24Well, well, certainly I think you you can tackle it from both. And by doing a a smart buy B buyout system that like buys out whole neighborhoods that are at risk, you're going to have a a significant reduction in the risk to taxpayers. I mean, there's no doubt about it. And then obviously if you are able to tackle severe repetitive losses properties to mitigate them so that they're not in that category anymore or conduct buyouts for those, it is going to have beneficial impact.
▶ 1:45:50But has been previously stated, there's the programs underwater for more than just the reason of severe predeterive loss pro properties. There's just the rates are finally coming to being more actuarial or closer to actuarial, but they haven't been for decades and that's a legacy
▶ 1:46:07Very good. Thank you. I yield back,
▶ 1:46:10Gentleman yields back. The gentleoman from Michigan, Miss Talib, is now recognized for five minutes.
▶ 1:46:15Thank you, Mr. Chair. We all know that flooding is a tremendous issue. that's why we're here. Um, and every single one of our districts have been impacted by it. But in recent decades, the city of Detroit, especially even some of the surrounding um, cities have seen an increased rainfall intensity and volume and growing likelihood of larger storms. Um, from city of Dearborn, which is the second largest city in my community in 2021, a month's worth of rainfall in 24 hours, causing a once in a century flood.
▶ 1:46:45And that same year, Western Wayne communities um as well as Dearborn Heights suffered significant rainfall um flooding as they had a two two years prior in 2019. And I could tell you in Dearborn Heights, we I know Chairman Flood talked about this when do we finally like, you know, purchase the homes and FEMA and so forth. And we've done that over a dozen homes. Um and they're not in the flood maps.
▶ 1:47:11Uh but because of the severe damage and continuation even losing frontage uh their backyard uh foot uh of uh just is literally being swallowed up by by the excessive flooding. But rainfall volume for a 10-year storm in Metro Detroit is expected to increase not by a little bit but 67%. Um and no one thinks about the Midwest when they think of flooding and that has to change. Um, you know, FEMA was created in a way to help the coastal uh communities.
▶ 1:47:42Um, and you know, now with flooding being so prevalent in the Midwest, you know, FEMA doesn't cover basements like people think. It has to be there has to be a bedroom down there and all these other things. And that to me is really left a lot of my families um uh in homes in disrepair. Two years after a lot of these storms, they now have mold. they have toxins in their home because again uh FEMA wasn't covering the cost of mitigating and cleaning out those basements.
▶ 1:48:11So, you know, even in this time, Mr. Scattera, given the changing conditions and everything, you know, do you see the importance obviously in changing FEMA's mapping, but also in what they will cover in damage? Uh again, we have fix our flooding basement act. one, it's educating my colleagues that this is actually factually true, that basements are not covered, uh, unless there's a bedroom down there.
▶ 1:48:38And and second of all, uh, the fact that even years later, we're seeing mold and toxins and a creation of an unsafe home. Uh, meaning in many ways it needs to be demoed at this point because of the excessive flooding. So, if you could talk a little bit about the importance of both. I know mapping is so important, but at this time I also think even if we did fix that, it still won't cover basements.
▶ 1:49:03Yes, thank you. And you are correct. Basements usually are not covered by NFIP policies. Um I think one of the things that we could or FEMA could do to address this issue is to increase the amount of money that's provided through increased cost of compliance funding. So, ICC funding is triggered when there's a flood that damages more than 50% of the value of a home. Right now, a homeowner who gets uh that type of damage only gets about $30,000. Yeah,
▶ 1:49:30that's far less than what it costs to actually mitigate a home nowadays. It didn't stay in line with inflation and it's not even helpful when they do get that money because they often can't afford to make up for the rest of that cost. So if FEMA were to um increase the amount of ICC funding that goes to homes, we can mitigate them a lot faster and actually reduce the overall exposure of the NFIP.
▶ 1:49:50Can we do that without having I mean with the National Flood Insurance Reform Act of 94 requires that FEMA assess whether a community's maps needs updated 5 years. We can do that separate from that correct
▶ 1:50:00from the mapping. Yes.
▶ 1:50:01Yeah. Okay. Um and I I really urge my colleagues to really think about this and this is important again. Um we have consistently talked about coastal communities, other places that have flooding, but the fact that we are now allowing basements and uh other these other various issues um around not being our infrastructure not being able to handle the record rainfall and how basements are integral part of a home.
▶ 1:50:26You if you're not mitigating and getting the toxins out of that basement and it costs a lot of money. I have contractors that won't even come out and do it because they can't guarantee they'll get paid from FEMA, right? And so it's just a creating a cycle and leaving homes uh in complete disrepair. If we cleaned it and every it would be a habitable home. It'll be able to folks be able to live, you know, there for years and be able to do some of the I think mitigation. Lastly, um you wrote an article, Mr. Scattera, arguing that under this administration, FEMA has faced death by a thousand cuts.
▶ 1:50:55What are some of the ways that FEMA has been undermined?
▶ 1:50:59Um I think some of the ways that FEMA has been undermined are through just reductions in the hazard mitigation programs. Yeah. Um, it's good to see that brick is back up and running. That is essential for reducing risk. I'd also like to see uh hazard mitigation grant program be more utilized. A lot of the buyouts are through that program.
▶ 1:51:16Thank you. Thank you, Mr. Chair.
▶ 1:51:18Gentlewoman yields back. The gentleman from Tennessee, Mr. Rose, is now recognized for five minutes.
▶ 1:51:23Thank you, Chairman Flood and Ranking Member Clever for holding this important hearing. And thank you to our witnesses for your time uh being with us today. I care a great deal about protecting taxpayers from mounting national flood insurance program debt while still encouraging responsible risk management. That's why I fully support Representative Downing's discussion draft to bar newly designated severe repetitive loss properties from the NFIP. But I believe that's only a first step.
▶ 1:51:54Right now, taxpayers are effectively lending money to this program so it can repeatedly pay claims on the very riskiest properties in the country. And to me, that is fundamentally unfair. In my view, real reform means drawing a hard line and removing all severe repetitive loss properties from NFIP coverage. So, the federal government is no longer acting as an open-ended ATM for chronic loss properties. Mr.
▶ 1:52:22Ellis, given your experience, what principles do you think should guide us as we look at how to treat these severe repetitive loss properties from uh going forward so that taxpayers are better protected.
▶ 1:52:36Thank you, Congressman. Uh, one of the things is that we need to have better data and understanding of where where the severe repetitive loss properties are and so that we can get to some of these issues about whether they're like impoverished and they they can't get out of there or if it's the Virginia Beach property that's, you know, well off and has been flooded dozens of times as mentioned by the chair. And so I think one is is to get the information. The other is is to have strings attached to these funding and to try to move people out of these properties to buy them out or to uh uh mitigate the properties.
▶ 1:53:06And so, and then lastly, I think the other thing that's important for um uh taxpayers is to move this program to get closer to actuarial rates where it's going to be attractive to the private sector to offer flood insurance and so that that way more Americans who really do need it can get coverage because they're buying it from their private
▶ 1:53:24So, picking up on that, Mr. Al, you've recommended targeted means assistance so that help goes to those who truly need it rather than being buried in the rate structure. Let me ask you about the flip side of that. Right now, isn't it true that taxpayers can still end up backstopping flood risk for expensive properties and highinccome owners through the National Flood Insurance Program as a whole?
▶ 1:53:48And why shouldn't we go further and means test the program itself so that taxpayers are not effectively subsidizing flood risk for wealthy homeowners and high-v value coastal properties and instead focus any subsidy only on lower and middle inome families uh who would otherwise be priced out of coverage
▶ 1:54:07here here Congressman Rose uh certainly we agree that this any means I mean means tested assistance should be directed to these uh uh lower income homeowners that are that are affected so that they can have the flood insurance coverage and that there have been moves. I mean, in the previous flood insurance rate maps, the government accountability office has documented huge cross subsidies that were occurring from interior counties to coastal counties where people were paying more than they should be paying in the interior counties and the coastal counties were paying less.
▶ 1:54:36Thankfully, with risk rating 2.0, that's becoming less of an issue, but it is critical. And the only other thing I would say is there's limitations on the amount of coverage you can get. So, it also affects some of the higher value homes as well. Thank you, Dr. Horn. As you know, the National Flood Insurance Program still dominates the flood insurance space and the private market remains relatively small by comparison.
▶ 1:54:57As we consider potential reforms to the NFIP, are you aware of any proposals over the years that were specifically aimed at encouraging greater participation by private flood insurance providers? And if so, could you briefly describe the kinds of approaches that have been discussed? Thank you.
▶ 1:55:18Historically, if you if you look at things that Congress has introduc at least has been introduced into Congress, there have been bills, for example, for setting up a reinsurance pool. The NFIP as it was originally formulated was actually a pool of private insurers and that was what they call part A. They eventually moved to fully public.
▶ 1:55:39There are examples in other countries of there being a reinsurance pool to get basically private insurers need to know that they are going to make a profit for their shareholders or they need some sort of incentive. And so there are multiple ways that that could be done and there have been bills that have been introduced over the years. I don't think that any of them I think one of them might have been voted on but most of the rest of them were introduced but didn't go any further.
▶ 1:56:09Thank you Dr. Horn. I see my time is winding down and so in the interest of not going over I yield back. Mr.
▶ 1:56:16gentleman yields back. The gentleoman from Georgia, Miss Williams is now recognized for five minutes. Thank you, Chairman Flood and our ranking member Clever for holding this hearing today. And thank you to our witnesses for providing your expertise to this topic that is at the top of mind for so many of my constituents. Flooding is one of the costliest challenges facing this country. And y'all, the bills just keep going up.
▶ 1:56:39But behind every dollar figure is a neighborhood, a home, a family, a family that has been through it before and is scared that they will unfortunately have to go through it again. In my district, communities like Pool Creek and Westview, they don't get the luxury of being surprised because even moderate rainfall means flooded streets, damaged homes, and school delays. It's not a disaster when we already know that it's coming. It's an all too familiar calendar event.
▶ 1:57:05The question before us is not just how much flooding cost us, it's why we keep choosing to pay for it instead of preventing it or taking necessary steps to mitigate it. I would like to add for the record an article by Capital B News. The Black Mecca's climate plan is costing black Atlanta residents their homes. And in this article, there's a picture of a car literally underwater in my district in Buckhead.
▶ 1:57:29And that is maybe surprising to some of you because I'm not Atlanta's not coastal and if you look at my district, I literally went through area by area and there is literally not one river that flows through my district. But yet this is what happens with even moderate rainfall. This car is completely submerged in water.
▶ 1:57:48It will be received into the record without objection.
▶ 1:57:51Thank you, Miss Metlock. Severe repetitive loss properties or 1% of NFIPinssured homes, but a disproportionate share of claim playouts. We know chronic flooding is not random. It is concentrated. In communities like Pool Creek and Westview, residents don't need a major storm or major disruption. Moderate rainfall does it regularly. We know the rain does not discriminate, but the flooding, unfortunately, is going into communities of color at a disproportionate rates. So, what is driving that?
▶ 1:58:19And why are low-income communities and communities of color always at the center of it? Thank you for the question. What we do see is a historic pattern of um in areas that are floodprone, of folks that are lower income, of communities of color.
▶ 1:58:39Um, and these longstanding patterns um, reverberate now over time and continue to make it that much more difficult for families to be able to get a pathway um, either to mitigate their home in place or to relocate in ways that keep fragile um, social ties intact. We also know that in many of these communities, folks are interdependent on each other.
▶ 1:59:05they may be relying on family members or neighbors nearby for things like elder care or child care. Um, and it it's critical to move beyond our current approach of mitigation, including with buyouts that are parcel by parcel going one at a time. So, it's um a a long-standing challenge that uh is traceable back to early settlement patterns, but continues to reverberate over time.
▶ 1:59:35Miss Metlock, what you're describing points to a real gap, not just in infrastructure, but in resources to act before the next flood hits. Mitigation funding is limited, hard to access, and for families in my district, waiting on the next disaster declaration is not a mitigation strategy. is just waiting waiting for that next disaster.
▶ 1:59:55That is why I introduced the bipartisan whole home repairs act with my colleague Troy Downing that provides flexible grants for homeowners and small landlords to make critical repairs before the next damage is done, not after. How could targeted funding like this prevent properties from entering the repetitive loss cycle in the first It's um it's exactly the intervention that can make the biggest difference particularly if it can be deployed at scale.
▶ 2:00:22We already see examples across the country where local leaders or regional partners or even states were able to um uh do pilot programs to engage in hazard mitigation. We certainly see FEMA supporting that where it's able to. Uh but even with the reintroduction and the release of the brick program again yesterday, it is a drop in the bucket compared to the scope and scale of need that is out there.
▶ 2:00:52But there are examples where um uh hazard mitigation whether it's through elevation or strengthening the home um is is enabling folks to be safer to reduce their insurance cost to reduce the disruption and misery associated with repeated flood. Um and so our our challenge today I think is to take that example and scale it across the country where it can make the biggest difference.
▶ 2:01:21We already know that these are proven um models and examples uh but it should not be like I have run out of time but Mr. Chairman I do have questions that I would like to submit for the record as we continue this very costly and timely conversation.
▶ 2:01:35We will accommodate your request. Thank you. The gentleman from New York Mr. Garbarino, who is also the chairman of the Homeland Security Committee, is now recognized for five minutes.
▶ 2:01:45Thank you, Mr. Chairman. Thank you all for the witnesses uh for being here today. I was glad to see that my bill uh the Community Flood Resilience Act included in today's hearing is a is a discussion uh draft. This bill helps floodprone communities, especially those with low participation in the NFIP, better protect themselves by linking risk mitigation with risk transfer.
▶ 2:02:07By using paramedic insurance, payouts are triggered by measurable thresholds like rainfall, allowing communities to access funds quickly and recover faster after This bill also allows FEMA mitigation funding to support community-based insurance solutions, ensuring communities both reduce their risk and have reliable, timely financial support when flooding occurs.
▶ 2:02:31By aligning mitigation with risk transfer and encouraging public private collaboration, this approach helps communities recover more quickly and build long-term resilience. Dr. Poente Cackley, how can we ensure that this integrated approach linking flood mitigation investments with risk transfer tools like paramed metric insurance is effectively implemented within existing FEMA programs so that communities actually see faster recovery times, reduce costs,
▶ 2:03:01and measurable improvements in long-term resilience.
▶ 2:03:05Thank you for the question. I think that parametric insurance is is a a tool that can be used as as part of um the the more comprehensive reform of NFIP. I think there are definitely benefits um to the to the um to the practice of of uh community- based um insurance especially in in terms of getting payments to to homeowners faster.
▶ 2:03:33There are also some things that would have to be um considered and and um and sort of work work around the the the the downsides of of parametric insurance. One of which is is mainly that um policyh holders no longer have an incentive to mitigate if they know they're going to get a payment just because the event happened.
▶ 2:04:00So there there is I'm sure there's there are ways to design the program to make that less of an issue, but it is something that needs to be considered.
▶ 2:04:11Is that something that FEMA can do on uh right now or do we have to direct them to to do it?
▶ 2:04:16I'm sorry. Can
▶ 2:04:17can FEMA do that on its own? Can it use tools use these tools like parametric insurance and and and uh can they effectively implement them on its own or do we have does Congress have to direct them to do this? I think the would probably require authorization to to to do that.
▶ 2:04:30Okay. Um Dr. Horn, from a policy and program design perspective, how can Congress best structure FEMA mitigation funding and flood insurance frameworks to support approaches that combine risk mitigation with risk transfer, including parametric insurance, while encouraging effective public an effective public private partnership.
▶ 2:04:54Thank you. Excuse me. historically much more funding has gone to post- disaster mitigation activities than pred disaster mitigation. It really has only been in recent years that Congress has begun putting more funding into predesaster mitigation and it still doesn't receive as much as the hazard mitigation grant program for example. Most much more money has gone out through that than through the other programs.
▶ 2:05:24The key thing about pred disaster mitigation is you don't have to wait for it to happen. You can identify places that are at risk and you can apply for funding that would reduce that risk before it happens. So in terms of structuring this, the flood mitigation assistance grant program from the NFIP again has historically been paid for just by NFIP policyh holders, which means that any funding that the NFIP spends on mitigation, they don't have available for flood plane management or paying claims or any of the other things the program
▶ 2:05:54does. Congress addressed that significantly in the infrastructure investment and jobs act where they appropriated $3.5 billion to the flood mitigation assistance grant program. But the in terms of what could be done, I think an increased focus on pre- disaster mitigation, not waiting for a disaster to happen, but identifying places at risk and trying to reduce that risk before they ever flood.
▶ 2:06:19I appreciate that and I I was happy to vote for the um infrastructure bill and um I like the focus I do like the focus on premigration. I know on Long Island where I'm from, we have worked very closely with local municipalities uh and the Army Corps to um to figure out what needs to be done and through our new community project fund request and appropriations, we've been able to get money towards those uh premitigation dollar uh premitigation efforts. So, thank you very much and I yield back. Gentleman yields back.
▶ 2:06:49The gentleoman from New York, Miss Velasquez, is now recognized for five minutes.
▶ 2:06:53Thank you, Mr. Chairman. And uh I would like to state to the uh for the record that I um agree with ranking member uh waters um about the efforts taken by the Trump administration to dismantle FEMA. Miss Metlo, wouldn't you agree that these efforts make it difficult for the NFIP to operate effectively? I'm sorry. Do you mind repeating the question, please?
▶ 2:07:21Wouldn't you agree that the the efforts taken by the Trump administration to dismantle FEMA uh that it will make it difficult for the NFIP to operate effectively? Thank you.
▶ 2:07:39Um certainly as the agency operates uh with fewer staff or under greater uncertainty it can make it more difficult to administer the full range of programs.
▶ 2:07:52Thank you. And over the years and even few minutes ago I have heard my many of my colleagues uh particularly on the other side of the aisle argue that the NFIP doesn't operate with actuarily sound rates or that repetitive loss properties continue to threaten the of the program.
▶ 2:08:17One of the most important ways we can do that is by investing in pre- disaster mitigation strategies. Can you explain the importance of Congress investing in pre- disaster mitigation strategy to make our communities more resilient and help keep rates affordable for the NFIP policy
▶ 2:08:40Thank you. It is uh probably the single most important thing that Congress can do in advancing the community um keeping insurance rates affordable and within reach.
▶ 2:08:54Um and ultimately buying down risk in the first place to stem uh humanitarian um impacts and and the human misery that goes with repeatedly flooding um repeatedly having to evacuate and living with the uncertainty of a home that is floodprone and unmitigated. And can you explain uh how programs like the NFIP and CDBGDR can help deliver this type of funding to states and localities?
▶ 2:09:26Certainly um as these programs are designed uh to advance rebuilding stronger uh whether it's through the payouts through the national flood insurance program or uh the funding made available through community disaster um uh CDBGDR through HUD as long as they are not rebuilding what was harmed in the first place but instead learning the lessons that that the disaster has to teach then it can break the cycle of disaster.
▶ 2:09:55Do you believe that private insurance carriers uh are equipped to deliver this type of grants?
▶ 2:10:04If they were to be asked to take on the NFIP portfolio tomorrow, I don't believe they're equipped to do it that quickly.
▶ 2:10:11So, doesn't their inability um speak directly to why the NFIP remains Uh the NFIP is essential social infrastructure. Um it will take some time um that will not be measured in weeks or months or even single years. It's going to take time to grow a robust private market that can take on the full scope and scale of flood risk for the United States.
▶ 2:10:39Um uh it will also take significant reforms including investments and hazard mitigation to buy down the risk and buy down that portfolio in the first place. Um, that said, I do think that there's appetite, but it's going to take time to grow it, but importantly bring it in reach for
▶ 2:10:55Well, that's the reason why I have called for a 10-year reauthorization. Mr. Scott, you have been quoted as saying the NFIP with the right reforms can become a tool that not only ensures people's homes, but also helps community adapt to a weather riskier future. Can you explain your quote? What type of reforms would you recommend?
▶ 2:11:21Thank you. Yes, the NFIP is more than just an insurance program. It also sets the floor for building standards across the country, provides flood plane mapping, and it also provides mitigation. All three combined can help reduce risk beyond just insurance payouts. Some of the biggest reforms though that need to happen need to happen with mapping. Um the maps are insufficient, they're out ofd, and they're backward-looking. as well as looking at how to um get more mitigation funding into people's hands, especially lower income communities that don't have the resources to adapt.
▶ 2:11:49Wouldn't you agree that as a baseline starting point, all parties should publicly acknowledge that climate change is real and the impact it is having on our communities is real.
▶ 2:12:05Gentleoman's time is expired.
▶ 2:12:07I yield back.
▶ 2:12:08Gentleoman yields back. The gentleman from Montana, Mr. Downey, is recognized for five minutes.
▶ 2:12:14Thank you, Mr. Chairman, and thank you uh to the witnesses for being here today. You know, the National Flood Insurance Program and the coverage over multiple loss properties has been of particular interest to me as the former insurance commissioner of the state of Montana. And one of my main concerns has been making sure that Montana rateayers, Montana taxpayers are not subsidizing the risky and costly policies issued in these flood prone areas.
▶ 2:12:43And u you know some of these very problematic repeat losses. I mean maybe tough to hear but sometimes God tells you don't rebuild there and my constituents shouldn't have to suffer just because somebody else does. Um I'm going to start with uh Dr. Poente Has the National Flood Insurance Program, which is obviously subsidized by the federal government, has that incentivized construction in extremely risky areas?
▶ 2:13:14So in the past where where um National Flood Insurance Program premiums were um heavily discounted in many areas, I think that probably was true. As we've now moved to risk rating 2.0 know and premiums are moving toward full risk rates. I think that will be very much less um true. And for severe repetitive loss properties in particular, if you have them paying full risk rates, you they're not going to be the problem that they have been.
▶ 2:13:41Thank you, Dr. Horn. Would you agree? What do you think?
▶ 2:13:45Thank you. So certainly new policies that come into the NFIP for the first time are being charged the full riskbased rate from the beginning. It's the people that have been with it for a long time. And I think that one of the things that a lot of people don't realize is that there have been studies of flood insurance programs around the world. And the NFIP is one of the few, if not the only one that links development in some way to flood insurance.
▶ 2:14:15And some of that is through the community rating system and through the NFIP minimum standards. My other witnesses have talked about how those could be improved and certainly tying more development controls or more rebuilding would be useful, but in fact the NFIP is doing some of that. It just needs to be strengthened. Thank you. Congress can do that, of course.
▶ 2:14:37I I appreciate that. Um, in order for an insurance program to be financially sound, the rates it charges must reflect the risk that that the policy holder carries. And the only way to truly reduce costs is to reduce risk. Government subsidies often mask the underlying cost drivers. Uh I'm going to move to Mr. Ellis.
▶ 2:14:55So severe repetitive loss properties represent less than 1% of insurance properties but account for around 10% of all NFIP claims which underscores their disproportionate cost to the NFIP. So my question is should Congress explore prohibiting continued NFIP coverage to properties that have multiple losses and if so where should that threshold be? Thank you, Congressman, and thank you for your leadership in these issues.
▶ 2:15:22I think that uh I think as of 2022, there were 44,000 properties that were severe repetitive loss properties. And so, it's a universe that we should know better and that would help us decide that threshold, whether we're talking about is somebody who really can't get out of that that structure and it's impoverished or whether it's a wealthy beach owner that's taking advantage of the taxpayers and sucking money out of Montana.
▶ 2:15:44And so I think that that's something where we want to understand that but I think it is critical to tackle those particular issues that are c those particular properties that are causing so much loss and damage to the
▶ 2:15:54Thank you. Uh moving back to Dr. Horn, another way to reduce risk in the flood insurance market is to take those risky properties out of the pool altogether like through FEMA's voluntary buyout program. So what can Congress or FEMA do to increase participation in FEMA's buyout program? So, as you've heard from other witnesses, one of the big challenges of the buyout program is that it takes a long time.
▶ 2:16:18So, people may agree to take the buyout and then they see their neighbors take the insurance money, rebuild their house, and they're still waiting. The other challenge again that other witnesses have referred to is this sort of checkerboard effect that you get because FEMA's buyouts are completely voluntary. You can't force somebody to take it. And so it would be possible, for example, to offer incentives for multiple properties to take a buyout at once.
▶ 2:16:43I believe that the CDBG money after hurricane after hurricane Sandy was some of that I think it was New York State that did that that if three to five properties took a buyout together, they could get I think 10% more than their pre flood value. So Congress could certainly provide incentives for people to take a buyout.
▶ 2:17:04Well, thank you. Uh, I have a lot more questions, but not a lot more time. So, Mr. Chair, I yield.
▶ 2:17:09The gentleman yields. The gentleoman from Oregon, Miss Binham, is now recognized for 5 minutes.
▶ 2:17:15Thank you, Mr. Chair. Um, good afternoon. I'd like to thank our panel of witnesses for joining our committee today and for sharing their perspectives and expertise. Across the country, families are living with the reality of more frequent, more intense flooding, whether that's from coastal storms, atmospheric rivers, or post wildlife flash floods. And the economic burden is growing every year.
▶ 2:17:41As you know, the National Flood Insurance Program remains the backbone of recovery and risk management for millions of households. But short-term patches have left our communities with uncertainty. And as you've been mentioning, we need a long-term reauthorization of NFIP that provides stability for homeowners, clarity for governments, and a stronger platform for modern mapping and mitigation.
▶ 2:18:07So, I'm glad that our subcommittee is focusing on this topic today, and I'm eager to see a sustained effort to deliver these aims for the American people. So, I was a little jealous to hear that uh Representative Downing has also introduced other um flood plane um acts with other people, but I'm proud to have introduced the bipartisan flood plane enhancement recovery act with him as well.
▶ 2:18:32And we know that healthy flood planes provide a variety of important services to both our ecosystems and our communities. And that ranges from creating critical wildlife habitats to improving water quality to protecting our homes from flood and wildfire damage. And I've seen firsthand in my district that when we put resources into restoring these ecosystems, we really are investing in a safer, healthier, more beautiful future.
▶ 2:19:02So, as a quick example, let me tell you about the Y choose Canyon Habitat Restoration Project. This project is located downstream of Sisters, Oregon in my district and it's helping to restore critical habit habitats along the Wa Creek. Um, this restoration will allow the river to better support species like Chinuk salmon, steel head, and bull trout.
▶ 2:19:29But in order to secure the flood plane permit from FEMA to move forward, the project itself had to shell out in order to update flood map modeling and prove that the project wouldn't increase flood risk.
▶ 2:19:45So this delayed the project's timeline and meant that there was less funding for the actual And so I believe that when the federal government, though well-meaning, gets in the way of that good work, I believe there's only one thing to do, and that's get out of the way. So our bill would make sure that low-risk, high value ecosystem restoration projects won't get stuck in regulatory limbo just because FEMA's flood maps are out of date.
▶ 2:20:14And I believe that this is common sense bipartisan policy and I'm proud to be a leader on this bill alongside Representative Downing and Representative Style. So, um, my first question is for Dr. Horn.
▶ 2:20:28If an environmental restoration project clearly reduces flood risk, is it reasonable for Congress to create an optional exemption like in my bill for those restoration projects so they aren't forced to spend tens of thousands of dollars fixing outdated FEMA maps just to prove they aren't raising flood
▶ 2:20:48Thank you. Um CRS of course does not make recommendations. Yes. But it would certainly be within Congress's authority to do that to provide differential funding that would look at the co the costs of identifying where the the impact of a flood project might be.
▶ 2:21:08I mean the no rise requirement for example is my understanding is it's mainly to make sure that if one community does something they don't pass the problem on downstream to another one. So that would be something that again it would be within Congress's authority to say that if we want to look at that we could maybe not wave but they could provide funding to make sure that things happen more quickly. And in recent years, the mitigation programs have encouraged green infrastructure like this.
▶ 2:21:37But that again is a very recent phenomenon in the last few years where that's been a high
▶ 2:21:44Thank you. And Mr. Scotta, we've heard about restoration projects, including in my district, that have had to spend over $100,000 updating flood models to satisfy FEMA's no-rise rule on outdated maps. How would an optional exemption for these low-risk projects help speed up projects that actually lower flood risk and reduce NFIP losses? And maybe you can submit the answer for the record. Um, but I appreciate you taking my question. And Mr. Chair, I yield
▶ 2:22:14Gentleoman yields back. The gentleoman from Texas, Miss Dea Cruz, is now recognized for five minutes.
▶ 2:22:20Thank you, Chairman, and thank you to all the witnesses for being here today. I am um very interested in this conversation because I served in the insurance industry for 25 years. I'm not a day over 30, of course. And um so for 25 years, this was my space, homeowner insurance, NFIP.
▶ 2:22:47In fact, um I wrote so much NFIP that they called me the flood gal because I knew everything about flooding and the hazardous areas in our community where people would suffer the most uh damage when a storm came.
▶ 2:23:05I have a community in deep south Texas where we have uh hurricanes, where we have flooding, um all kinds of weather disasters in that area.
▶ 2:23:20So that being said, because I started so young in the uh housing insurance time, I had a very unique experience because with my private insurance that I worked for, I was able to write insurance directly from my carrier. And then there came a time when we could not. We actually had to write through NFIP.
▶ 2:23:49So two different applications, two different modes of selling the insurance. So in my experience, I see several different I different factors and I'd love to hear more about this from you all. Number one is the write your own insurance and having agents have the ability to be able to write flood insurance through their carriers directly through their carriers.
▶ 2:24:19Why? Because it is a seamless pro uh process from writing a homeowner's policy directly into a flood insurance policy where you don't have to break the conversation or break the application. And uh number two, it is about education as well.
▶ 2:24:41Many of the um homeowners in South Texas just weren't aware of homeowners uh I'm sorry of NFIP and the importance of flood insurance. And as an agent, when you're sitting with a homeowner already talking about the different types of homeowner applications that they can uh be insured through or buy, that is already a 45minute conversation at least.
▶ 2:25:10And now you've got to go and explain homeowner insurance. You're talking about a 2hour application with a with a family that might have toddlers running around them at the same time. So, I'd like to first um hear from each of you all about the importance of having write your own NFIP carriers into the program and how that might relate to my experience as an independent insurance writer
▶ 2:25:40and we'll start over here.
▶ 2:25:45So, there are the write your own companies are are basically agents of NFIP. they write the insurance, but NFI NFIP carries the risk um and and pays the claims if when um when a flood happens.
▶ 2:26:00So, I I think you're right that that um homeowners who are home buyers who are are having to figure out buying homeowners insurance and then understanding that flood insurance has to be added on because it's it's not um uh part of your homeowner's insurance is is all there that's a lot to to um handle at once.
▶ 2:26:20Um, private insurers also do um cover flood that and we've been talked a little bit already today that that they don't have a large share of the of the whole um uh portfolio of flood insurance, but they but they do carry flood and and and I'll just reclaim my time quickly because we only have a couple seconds.
▶ 2:26:43And what I found on the private side was that the insurance company was not able to price at the full risk of what flood insurance actually costs. And that's where the battle becomes NFIP or an actual private
▶ 2:27:01Yes, that's true. But that's why having rising 2.0 know moving toward full risk rates means that private insurers will be able to compete with NFIP as more and more policies are are charged at the full risk rate.
▶ 2:27:14I look forward to learning more. Thank you. I yield back.
▶ 2:27:17Gentlewoman yields back. The gentleman from New York, Mr. Lawler, is now recognized for five minutes.
▶ 2:27:22Thank you, Mr. Chairman. CRS has highlighted that past flooding is one of the strongest predict uh predictors of future flooding. Dr. Horn. FEMA reports that one hotel has filed 228 separate claims and a single family home has filed 41 claims. What does this tell us about the predictive value of past flooding and how should Congress incorporate that reality into NFIP
▶ 2:27:50Thank you. One of the at least historical approaches to the FIP is of course that it's selling insurance and they are selling you a policy for one year. So it like in the same way that an insurer wouldn't charge you now for health risks that you might have in 20 years. The NFIB doesn't do that either. So they have historically not priced future losses.
▶ 2:28:16On the other hand, in the sort of instances you've mentioned where they have flooded numerous times, that's something that they know that that property is likely to flood again. And I guess the other thing that would be useful is to acknowledge that the maps don't actually show every source of risk. So the existing maps show the risk from rivers and flooding from rivers and flooding from the sea. It does not show the risk of flooding from heavy rainfall.
▶ 2:28:45And we've seen that, I think, certainly starting with the Baton Rouge floods in 2016, Hurricane Harvey, Hurricane Florence, Hurricane Helen. We've seen a lot of instances where the flooding has come from heavy rainfall, and that's currently not included on the maps. It is included in the new pricing from risk rating 2.0, but if people still rely on the maps to know that they're risk, that's not going to be something that becomes available.
▶ 2:29:12They as again as many people have said there needs to be more education about the flood risk to individual properties.
▶ 2:29:20Now the NFIP currently owes taxpayers more than $22.5 billion including new borrowing just last year. Mr. Ellis, from a taxpayer protection standpoint, how sustainable is it for the NFIP to continue covering properties that repeatedly flood some five or more times without requiring mitigation or buyouts? It's not sustainable, Congressman. And so we're going to have to move that direction to try to relieve some of the pressure on the program.
▶ 2:29:50Now, FEMA has funded about 46,000 buyouts, but GAA notes these projects often take years. Uh, Miss Kackley, what are the primary bureaucratic or statutory barriers that slow down voluntary buyouts and what reforms would most effectively shorten the timeline for high-risisk properties?
▶ 2:30:14So, there's a number of of different uh stages to the process of of applying for um mitigation and a buyout. Specifically, one of the things that would and and they all take time to to have a plan to apply for the grant, to get the grant, all of that takes time. One of the things that would um definitely make things go faster would be if there were a pre-approval mechanism for certain properties so that FEMA could approve th those acquisitions very quickly.
▶ 2:30:45A 2019 study by the National Institute of Building Sciences found that every $1 invested in hazard mitigation saves up to $6 in avoided disaster losses, including reduced property damage, lower recovery costs, and fewer disruptions to local economies. Mr. Ellis, given that mitigation yields such a high return, what prevents federal programs from prioritizing pre- disaster mitigation over post- disaster spending?
▶ 2:31:14Well, has been previously mentioned and one is is that that there's been less money, less resources and some of it is because of the budget rules. You know, that's money that's on budget whereas a disaster is post, you know, is emergency funding and so there's more money. Thankfully, the brick program actually allowed some of the post- disaster funding to be shifted to mitigation, which is why it was so concerning that it was stalled for for a few years here. Um, but so that's one area where I think we could do much more.
▶ 2:31:39And the other thing just on your comment about delays on uh uh uh buyouts, it's something that where we think that the disaster funding, we should have some strings attached to that that we should that that communities that do more to take make themselves less vulnerable in the future should be able to get more assistance. And that would be like you already planned. We know these places have flooded. We know they're going to flood again. When they flood again, we're buying them out right now. Cash on the barrel.
▶ 2:32:04No question. And I think that's a reality that needs to be dealt with. I mean, some of these properties that are continually flooding, uh, you need to address with a buyout. Frankly, mitigation is not going to solve the problem. So, I appreciate your testimony, and I yield back. Gentleman yields back. The gentleman from California, Mr. Licardo, is now recognized for five minutes.
▶ 2:32:29Thank you, Mr. Chair, and thank you for allowing me to sit in on the subcommittee again. I think I'm becoming the subcommittee mascot. Um, but I appreciate being able to tag along. I appreciate all the the testimony so far and and certainly agree with what has been said about the imperative to reform the NFIP program and certainly to properly assess risk. Um, I'd like to focus on mitigating the risks though for a moment. Um, Mr.
▶ 2:32:55Ellis, I appreciate your work as president of the pres the taxpayers for common sense. Uh, I know not many Americans would disagree with that title. Um, something we should all want. Uh, and your emphasis on preventative investment. I've heard from you and from several other witnesses. Uh, as you noted in your written testimony, only about one out of every four of the highest risk properties for flooding is seeing any mitigation to reduce risk. Um, and there are many ways to do that.
▶ 2:33:25Certainly elevation, relocation, buyouts, u investment, green infrastructure, etc. Um what we know about mitigation is well you I'm sure there have been a lot of different studies. Noah's report that I saw cited $13 saved for every dollar invested mitigation. I know there's lots of ways of measuring that like any costbenefit assessment but um I think you indicated there's some problems with budget scoring rules the CBO uses.
▶ 2:33:54Could you describe for a moment why we are not taking in account the mid the value of mitigation fully uh and what we need to do to better score proposals?
▶ 2:34:09Yes, Congressman. I state that the Congressional Budget Office is a vital tool and we are very respectful of but we do have some issues sometimes with their scoring and some of their methodology. I know you need to have rules. Um, but this is a case where one is they don't always know, you know, there's a talk about $1 is $6 saved or $1 is $13 saved, but it all depends on the mitigation that you're actually doing. And so it depends on the the circumstances whether it's more costly for labor or for supplies.
▶ 2:34:37But in the end, they're not counting some of the the values and the and the savings that you're going to get from investing in mitigation. And that's a limitation on this legislation moving forward or any legislation moving forward that cost that has that because of the cost
▶ 2:34:52So certainly I I would agree about the imperative to consider how we can reform how we assess our investments federal level. Uh we do have some programs for investment. One of them was and theoretically is um the building resilient infrastructure and communities program brick which we know has gone through a pretty tumultuous uh existence over the last 14 months or so. Uh it's the largest competitively awarded pre- disaster mitigation funding source.
▶ 2:35:22Uh almost five billion dollars available have been made uh in its existence. But of course, nothing since 2024 because the Trump administration halted all spending and attempted to eliminate the program. Then of course 20 states went to court. Uh got an injunction to halt the Trump administration's elimination of the program.
▶ 2:35:46Then they went to court again uh to try to get the administration, that is FEMA, to actually follow the prior court order. It appears now they're finally doing that. Uh my understanding is that there are a little over $5 billion set aside for in the disaster relief fund for brick. Do you think it would be a good idea for taxpayers that they actually invested those dollars in mitigation
▶ 2:36:14Absolutely, Congressman. I mean, it's very ironic that the the brick program was created in the first Trump administration. um it's their own creation and it really is a a great tool where you're taking some of that postresponse dollars and you're pre-sponding to future disasters. And so that's an investment in the nation's future. That's an investment in in taxpayers and having reduced future losses. And so no, it's an important area and it's something that I'm glad to hear that the movie money is finally
▶ 2:36:40Well, we'll certainly be pushing hard. Uh there's uh some communities in my neck of the woods, including some coastal communities, are facing very imminent threats and uh we want to ensure that the brick funding that they're uh on the short list for is actually realized. Um I'd love to talk uh I know we're running out of time. I'd like to be able to approach you offline. Uh we're working on some ideas that don't involve public investment because I know we're concerned about taxpayer dollars.
▶ 2:37:04But uh clearly we need to find ways to incentivize private investment that is of homeowners and property owners in uh resilience and risk reduction. And I look forward to having conversation with you offline about how we can best do that. I think there's some uh lessons we've learned from local communities that have utilized programs like PACE uh though imperfectly to find ways to actually empower homeowners to help themselves. Uh and I know we'll be discussing those hopefully in the weeks ahead. Thank you very much.
▶ 2:37:32Thank you, Congressman.
▶ 2:37:34Gentleman yields back. Uh for the record, a FEMA advisory dated March 25, 2026, FEMA announces 1 billion in federal funding to help states mitigate impact of disasters. I'd like to thank all witnesses for their testimony today. Without objection, all members will have five legislative days to submit additional written questions for the witnesses to the chair. The questions will be forwarded to the witnesses for their response. Witnesses, please respond no later than April 30, 2026. The hearing is adjourned.