Many Hawaii homeowners have been wondering over the past year how the government’s recent flood zone policy changes were going to affect them. Congress has passed a lot of policy changes in an attempt to replenish our country’s $24 Billion debt due to the super storms and hurricanes hitting the US in recent history.
For over 2 years, since the Biggert-Waters Flood Insurance Reform Act of 2012, the government has been under scrutiny of lawmakers, homeowners, and real estate professionals. The complaint is that changes were essentially making it impossible for the average homeowner in a high-risk flood zone area to afford flood insurance or sell their home without their value being negatively affected.
In 2013, FEMA’s programs were revamped and laws were implemented with the goal of eventually making those high-risk homeowners fully responsible for insuring their home without the historical government subsidies. A big aspect to the changes was the rezoning of the flood maps.
How Does the Rezoning Now Affect the City & County of Honolulu?
Well, in August 2014, the FIRM (Flood Insurance Rate Maps) changes were announced by FEMA. As of November 5, 2014, there will be 8 neighborhoods on the island of Oahu whose flood zones will be affected, namely: Waimanalo, Waialae, Salt Lake, Kailua, Kaneohe, Waimalu, Maili, and Kahuku. This equates to approximately 1,000 unhappy homeowners.
Overall, Salt Lake, areas along the Waimalu and Halawa Streams, and Coconut Grove in Kailua were where the most dramatic flood zone map changes were made. Fortunately Kailua’s high-risk areas were narrowed, and same for Kahuku on the North Shore. So, what does this mean for these homeowners? Newly affected owners with mortgages remaining are being notified that either they will soon be required to obtain flood insurance, or that their flood insurance premiums will be increasing if it was already a requirement of their loan.
These map changes not only affect owners with mortgages, but it will ultimately affect any owner in those areas when they sell their home. Potential homeowners who are looking to buy in these high risk areas need to do their due diligence and be aware of the cost of insuring those homes, both now and in future years when premiums are likely to be even higher. If the buyer is fortunate enough to be able to afford the insurance, can the next buyer afford it if/when they want/need to sell?