Joe Sopo
The Joe Sopo Team: Los Altos & ELB Real Estate Experts: (562) 201-1026
.


Leoni Tile kitchen
In 2008, Let Leoni Tile & Design Beautify Your Home: Italian Tile & Stone Craftmanship, Quality & Artistry, Details Click Here
Become A Hero To LB Animals With A $20 Membership. Info, Click Here.
Friends of LB Animals
Saving Lives Thru Spay/Neuter & Education

Sunrise Glass
Sunrise Glass & Mirror Free Estimates, Big Selection, Expert Work: (562) 493-3528
Pollman box


  • Neighborhood Groups/Meetings
  • How To Recall a LB Elected Official
  • Crime Data
  • City Council Agendas
  • Port of LB Agendas
  • Planning Comm' Agendas
  • E-Mail Your Council member
  • Council District Map
  • LB Parks, Recd & Marine
  • LB Schools
  • LB Airport Watchdog
  • Sacramento
  • Washington
  • References & Archives
  • Lost, Found & Adoptable Pets
  • LBReport.com

    News in Depth

    FEMA-Bailout Bill Could Put Mandatory Flood Insurance (Again) On Mortgaged Homeowners In Much Of LB And Southeast L.A. County

    Mayor Foster, Other Area Mayors & Supervisor Knabe Urge Milder House Version; Final Action Pending


    (Oct. 21, 2008) -- Tens of thousands of homeowners in southeast L.A. County (including much of East Long Beach and Wrigley areas plus parts of Lakewood, Bellflower, Paramount, Downey, Lynwood and South Gate) could again find themselves paying costly federally-imposed "flood insurance" -- not for flooding but for funding -- under bailout bills for Congress' "National Flood Insurance Program" drained by Hurricane Katrina and events in other parts of the country.

    Under two slightly different measures -- which have already passed the House and Senate and are in a conference committee that may or may not iron out differences in a post-election lame duck Congress -- property owners in the affected area might also potentially become subject to "flood zone" building restrictions that (among other things) require the elevation of new construction or when making "substantial improvements" to existing structures.

    The House version of the bailout bill (H.R. 3121) requires a "study" before FEMA takes action (pertinent text below). It passed in September 2007 with "yes" votes from area Congressmembers Laura Richardson (D., Carson-LB) and Linda Sanchez (D., Lakewood-Downey) and a "no" vote from Congressman Dana Rohrabacher (R., HB-LB-PV).

    The Senate version (S. 2284) doesn't require a study and directs imposition of the flood insurance requirement outright (pertinent text below). It passed the Senate 92-6 in May 2008 with "yes" votes by Senators Dianne Feinstein (D., CA), Barbara Boxer (D. CA) and Barack Obama (D., IL)...with Sen. John McCain (R., AZ) among the only two Senators recorded as not voting.

    Although the conference committee could reconcile the two versions and Congress could enact the legislation in a post-election "lame duck" session, LB city management believes it's more likely that the measures will be reintroduced anew after January 2009.

    On Sept. 16, 2008, a letter signed by multiple Mayors -- including LB Mayor Bob Foster and the Mayors of other SE L.A. County cities potentially affected cities, plus L.A. County Supervisor Don Knabe -- was dispatched to House and Senate leaders, urging them to adopt the House version of the bill (which requires a "study" first) and not the Senate version (which imposes the flood insurance outright).

    ...[W]e want the Conference Committee to know of our support for the position of the twenty member bipartisan House Coalition which urges the Senate to recede to the House on the important issue of mandatory participation in the National Flood Insurance Program in areas that are located behind levees, dams and other man-made structures.

    We, like the bipartisan House Coalition, believe the House language embodied in H.R. 3121, Sec. 3(a)(2), is a reasonable and responsible way to address the risk to structures in residual risk areas...

    We represent the interests of the 500,000 residents and owners of the 177,500 structures in the 100 year flood plain of the Rio Hondo/Los Angeles river system. It has been less than 10 years since the completion of the $180 million Los Angeles County Drainage Area (LACDA) Project which restored flood protection to our area and ended mandatory flood insurance...To reinstitute mandatory flood insurance on an area that has a modern updated flood control system is not fair and could have a very serious negative effect on our already fragile housing market and struggling local economy.

    [signed by Mayors of LB, Lakewood, Bellflower, Downey, Lynwood, Paramount and South Gate and L.A. County Supervisor Don Knabe]

    Two days later on September 18, 2008, LB City Manager Pat West advised the Mayor and City Council of developments.

    On October 2, 5th district Councilwoman Gerrie Schipske amplified the message on her non-City Hall internet blog, noting that if Congress reimposes flood insurance for the recently upgraded flood protection system, "it would have a very serious negative effect on the current economic problems we all face. Congress needs to understand that the insurance is not necessary in our region."

    With Congress expected to take up the issue again, either in weeks or in a few months, property owners in much of LB and southeast L.A. County will have much at stake...since the bailout legislation could do permanently what FEMA only did temporarily.

    In a controversial bureaucratic action in the mid-1990s, FEMA (which administers the "Nat'l Flood Insurance Program") redesignated much of the southeast L.A. County area -- which it had officially determined to be at low flood risk -- as within the agency's highest risk category, a "special flood hazard area"...an action allowing FEMA to collect for itself flood insurance premiums from all homeowners in the area with mortgages from federally backed lenders.

    FEMA acted based largely on a scenario hypothesized by the Army Corps of Engineers in which the L.A. and Rio Hondo rivers overtopped their levees for an extended period of time. (There hadn't been any actual flooding from either source since both rivers were channelized decades earlier). The Corps proposed a multi-million dollar federal project for itself (the L.A. County Drainage Area or "LACDA" project) to raise the L.A. River and Rio Hondo river walls to "fix" the supposed flood risk.


    L.A. County Dept. of Public Works archival image, not for official flood insurance purposes, showing hypothesized "overflow" areas

    Until the Congressionally-funded project was completed, FEMA could and did for several years collect annual "flood insurance" premiums from all homeowners with federally-backed mortgages in the hypothesized "flood zone."

    (SE LB shoreline areas, separately declared at flood risk years earlier for shoreline and elevation reasons, are subject to mandatory flood insurance regardless of the LACDA project.)

    As the LACDA project was completed over a period spanning several years, the area was eventually removed from the hypothesized "flood zone" and freed from the FEMA flood insurance mandate.

    But what has now happened in Congress threatens to reverse this. If either the House or Senate version of the legislation passes, homeowners in the areas removed from the flood risk by the LACDA project -- that is, much of LB and southeast L.A. County -- could again face the mandatory flood insurance requirement...only this time they'd continue paying the annual (and often increasing) flood insurance premiums each year into the foreseeable future.

    The House-passed bill could reimpose mandatory flood insurance after a "study" (text below)

    The Senate-passed bill would reimpose mandatory flood insurance without a study by declaring all areas that were previously deemed "special flood hazard areas" now at so-called "residual risk" (text also below)

    The Senate-passed version (S. 2284) states:

    SEC. 107. MANDATORY COVERAGE AREAS.

    (a) Special Flood Hazard Areas- Not later than 90 days after the date of enactment of this title, the Director shall issue final regulations establishing a revised definition of areas of special flood hazards for purposes of the National Flood Insurance Program.

    (b) Residual Risk Areas- The regulations required by subsection (a) shall--

    (1) include any area previously identified by the Director as an area having special flood hazards under section 102 of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a); and

    (2) require the expansion of areas of special flood hazards to include areas of residual risk, including areas that are located behind levees, dams, and other man-made structures.

    (c) Mandatory Participation in National Flood Insurance Program-

    (1) IN GENERAL- Any area described in subsection (b) shall be subject to the mandatory purchase requirements of sections 102 and 202 of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a, 4106).

    The House-passed version (H.R. 3121) requires a "study" first:

    SEC. 3...

    (a) In General- The Comptroller General shall conduct a study as follows:...

    (2) MANDATORY PURCHASE REQUIREMENT FOR NATURAL 100-YEAR FLOODPLAIN- The study shall assess the impact, effectiveness, and feasibility of amending the provisions of the Flood Disaster Protection Act of 1973 regarding the properties that are subject to the mandatory flood insurance coverage purchase requirements under such Act to extend such requirements to properties located in any area that would be designated as an area having special flood hazards but for the existence of a structural flood protection system, and shall determine--

    (A) the regulatory, financial and economic impacts of extending such mandatory purchase requirements on the costs of homeownership, the actuarial soundness of the national flood insurance program, the Federal Emergency Management Agency, local communities, insurance companies, and local land use;

    (B) the effectiveness of extending such mandatory purchase requirements in protecting homeowners from financial loss and in protecting the financial soundness of the national flood insurance program; and

    (C) any impact on lenders of complying with or enforcing such extended mandatory requirements.

    Congressionally mandated "flood insurance," which covers flood damages not covered by ordinary home insurance, is basically intended to protect banks and other federally-backed lenders who made loans on the properties. The flood insurance requirement is enforced by the bank/mortgage holder. After FEMA decrees an area is a "Special Flood Hazard Area," the bank/mortgage holder typically sends the homeowner/borrower a letter saying flood insurance is now required...and demands that the homeowner/borrower produce proof of flood insurance by a deadline.

    The 1990s FEMA proceeding was contentious and the agency's action was disputed. LB neighborhood activists charged (and FEMA denied) that the agency was basically taking an area it had found to be at low risk and bureaucratically redesignated it at high risk to collect premiums with little risk of payout.

    Among documents uncovered under the Freedom of Information Act was an internal FEMA memo noting no appeals of the agency action had been filed. "The LACDA is quiet," a FEMA official said.

    But the LACDA wasn't quiet.

    At a grassroots level, an appeal was ultimately filed by a homeowner [now-LBReport.com's publisher] and Los Altos area realtor Joe Sopo organized impacted ELB neighborhoods. Stormy community meetings followed in which capacity crowds made their displeasure known to elected officials. Documents also came to light raising questions about assumptions used by FEMA and Corps of Engineers in their proceedings.

    Separately, southeast L.A. County cities (calling themselves the "LACDA Alliance" with LB operating separately) opposed the FEMA designation and succeeded in getting a provision enacted into federal law by Congress, creating a new flood zone ("AR") with somewhat eased building restrictions on grounds flood protection was being restored.

    Congressmembers Steve Horn (R., LB-Downey) and Juanita Millender-McDonald (D., Carson), and Senators Feinstein and Boxer supported the "AR" designation and sped the Corps of Engineers levee upgrade, saying it would free area residents from FEMA's costly flood insurance mandate.

    "It isn't about flooding, it's about funding," LB homeowners and activists fumed at the time.

    Today, Congress admits its action is about funding. The House-passed bailout bill which could reimpose costly federally mandated flood insurance premiums on mortgaged homeowners in much of southeast L.A. County opens with:

    HR 3121:

    AN ACT

    To restore the financial solvency of the national flood insurance program and to provide for such program to make available multiperil coverage for damage resulting from windstorms and floods, and for other purposes.

    The Senate-passed version of the bailout bill opens with:

    Congress finds that--

    (1) the flood insurance claims resulting from the hurricane season of 2005 will likely exceed all previous claims paid by the National Flood Insurance Program;

    (2) in order to pay the legitimate claims of policyholders from the hurricane season of 2005, the Federal Emergency Management Agency has borrowed over $20,000,000,000 from the Treasury;

    (3) the interest alone on this debt, is almost $1,000,000,000 annually, and that the Federal Emergency Management Agency has indicated that it will be unable to pay back this debt;

    (4) the flood insurance program must be strengthened to ensure it can pay future claims;

    (5) while flood insurance is mandatory in the 100-year floodplain, substantial flooding occurs outside of existing special flood hazard areas;

    (6) recent events throughout the country involving areas behind man-made structures, known as 'residual risk' areas, have produced catastrophic losses;

    (7) although such man-made structures produce an added element of safety and therefore lessen the probability that a disaster will occur, they are nevertheless susceptible to catastrophic loss, even though such areas at one time were not included within the 100-year floodplain; and

    (8) voluntary participation in the National Flood Insurance Program has been minimal and many families residing outside the 100-year floodplain remain unaware of the potential risk to their lives and property.


    Return To Front Page

    Contact us: mail@LBReport.com

    Now On StraightTalkTV.com







    Mike Kowal
    Mike Kowal: Broker
    Excellence You Can Rely On
    (562) 595-1255
    Lovelace 06
    For Your 2008 Wedding & Special Events, Bill Lovelace Entertainment (Wedding Entertainment Planning A Specialty). Info, Click Here
    Carter Wood Floor box
    Carter Wood Floors, a LB company, will restore your wood floor or install a new one. Enhance your home. Click pic.

    NetKontent
    Preserve Your Family's Most Precious Photos and Videos on DVD. Click For Info

    Your E-Mail To Us
    Click here


    Copyright © 2008 LBReport.com, LLC. All rights reserved. Terms of Use/Legal policy, click here. Privacy Policy, click here