• Reversing the Tide: How to Appeal FEMA's Proposed Flood Maps
  • September 20, 2010
  • Law Firm: Verrill Dana LLP - Portland Office
  • Maine’s vast coastline is known for its breathtaking properties and beautiful homes.  So it comes as no surprise that a loss of development potential and an increased cost of flood insurance will trouble the waters for owners of Maine waterfront properties.  The Federal Emergency Management Agency (FEMA) is poised to finalize its new flood zone maps later this summer.  Flood zones are areas that FEMA has classified according to varying levels of flood risk.  On these new maps, coastal flood zones will shift inland, and more homes and properties will be included in high risk zones.  The very real consequences of these changes are stricter zoning laws that may prohibit owners from building or renovating their homes and lead to a tangible increase in already expensive flood insurance policy premiums.  Property owners have a limited ninety day window to appeal the new maps and preserve their ability to build and expand on waterfront estates.

    FEMA’s updated floodplain maps will illustrate regions that are prone to flooding, classified by type of zone.  Zone classification is relevant because FEMA administers the National Flood Insurance Program (NFIP), which offers community residents the opportunity to purchase flood insurance in exchange for the community’s commitment to practice sound land use management. The federal government backs this flood insurance money once a community participates in NFIP.  Although not all communities require homeowners to purchase flood insurance, a flood insurance policy is generally required to obtain financing from a federally regulated lender for properties located in a high risk flood zone.  Since almost all lenders are federally regulated, flood insurance becomes a necessity for many waterfront homeowners.  In Maine, there are 6,900 flood insurance policies in effect with coverage totaling $899 million.

    How does FEMA’s scale of low to high risk flood zones work?

    FEMA categorizes its flood zones using several measures.  FEMA analyzes the chance that a 100-year flood will occur, meaning a flood of such a high magnitude that it has a 1 percent chance of happening in a year.  FEMA also uses the concept of a 500-year flood, which has a 0.2 percent chance of occurring in any year.  For owners of coastal property, there are two relevant categories of flood zones: low to moderate risk and high risk.
    FEMA designations of low risk areas include Zones C and X, which are outside both the 100-year and the 500-year flood levels.  Zone B represents property with moderate risk, meaning it is between the limits of the 100-year and 500-year floods.  Flood insurance is available to owners with property located in these moderate and low risk zones in communities that participate in NFIP, but purchasing flood insurance is optional.

    A property could also be classified as being in a high risk zone.  High risk zones include Zones A, V and VE.  Zone A applies to all areas, not just coastal, that have a 1 percent chance of being inundated, falling within the 100-year flooding measure.  Zone V applies to coastal areas with a 1 percent or greater chance of flooding plus the additional risk associated with storm waves, called a velocity hazard.  This zone has a 26 percent chance of flooding over the life of a 30-year mortgage.  Zone VE also has a 26 percent chance of flooding over the course of 30 years due to the added velocity hazard.  Additionally, further analyses have been performed within VE zones to calculate base flood elevations (BFEs).  A base flood elevation is the flood depth that is associated with a 100-year flood.  Property owners are required to purchase flood insurance policies in order to obtain financing for properties located in all FEMA-designated high risk areas.

    What are the effects of the redrawn floodplain maps?

    The new floodplain maps will expand the coverage of high-risk zones.  For example, two-thirds of Kennebunkport would be classified under flood zones, representing a 50 percent increase from the present maps.  A property that is currently in Zone A may be newly categorized as being in Zone VE.  This change could result in a property owner being prohibited from building on her land and her flood insurance rates increasing significantly.  At present, the average flood insurance premium is only about $370 a year; however, flood insurance premiums can be much greater in a high risk zone, even exceeding $5,000 a year for some property owners.  Factors that determine specific premiums include the property location; the amount of coverage; the age, elevation and structure of the home; the building occupancy; and the deductible.  The policy coverage for a single family residence is limited to $250,000 for the home and $100,000 for the contents ¿ amounts that are very low for homes worth several million dollars.  Additional coverage can be obtained privately, but it would not be part of the federally-backed program. Premiums for Zone V or VE may be four times as high as insurance premiums for Zone A.

    FEMA has received substantial criticism for its proposed flood maps.  FEMA’s methodology may have failed to take into account the sheltered nature of much of Maine’s coastline, applying methods that are better suited for sandy, open beaches.  Additionally, FEMA’s limited budget does not allow for the most accurate mapping processes.  More sophisticated methods can generate quite different flood zone elevations, and could keep a significant amount of land out of the riskier flood zones.

    So what can property owners do to preserve their ability to build and expand on waterfront estates?

    After FEMA’s final maps are announced, the clock will start on a ninety day appeal window.  This could occur as soon as August 2010.  Homeowners and towns can use this short appeal window to argue against imposing the stricter flood zones by challenging FEMA’s methodology.  Individuals whose property could be affected by the new maps should inquire into whether their town has or will hire an engineering consultant to review its coastline and submit an appeal accompanied by the required scientific data.  Towns that have already begun the appeal process in anticipation of the new maps include South Portland, Portland, Harpswell, Falmouth, Kennebunkport and Kennebunk.  Robert Gerber of Sebago Technics in Westbrook, Maine has thus far been hired to handle all of the appeals for these municipalities.

    Most importantly, even if a town plans to take action, the town’s appeal might not produce the most favorable mapping result for each individual parcel of land.  Property owners must consider whether it would be in their best interest to individually hire a consultant and submit a separate appeal.  In most cases, the community will collect individualized appeals to the proposed maps on behalf of its residents and submit a collective appeals package to FEMA, facilitating the process on both ends.

    Once the ninety day clock starts ticking, it is important for property owners to take action before the end of the appeals window, which could close as early as late October 2010 in Cumberland and York Counties (assuming the clock starts in August).  Accepting FEMA’s new flood zones could render significant areas of coastline property largely undevelopable if it is newly classified as being in high-risk zones.

    The new maps are expected to go into effect one year after the close of the appeal period.  After the new maps are effective, property owners may still act by submitting other types of requests directly to FEMA.  A Letter of Map Revision (LOMR) can be submitted by individual homeowners to FEMA requesting a correction to the effective floodplain map.  A property owner can also seek to reduce the cost of flood insurance by filing a Letter of Map Amendment (LOMA), which can be used to reclassify a flood zone or establish a lower BFE.  Both LOMRs and LOMAs must be backed by precise scientific data or else FEMA will not consider the requests.