The Tribune Democrat, Johnstown, PA

Latest News

November 8, 2013

Flood insurance changes may swamp homeowners

JOHNSTOWN — Supporters of a plan to cut federal flood insurance program subsidies championed the move as long overdue when it became law in 2012.

In reaction to Hurricane Katrina and Sandy’s wake, why should the federal government help foot insurance premiums for a millionaire’s beach house getaway, lawmakers on both sides of the aisle said.

But the ripple effect also is washing onto the main streets and blue-collar blocks of the nation’s river cities and towns.

Subsidy cuts the new law enacted threaten steep hikes to flood insurance rates federally-mandated for those buying property in FEMA-designated “high risk” areas such as downtown Johnstown, Harrisburg and parts of Pittsburgh, Brett Insurance Agency President Jim Brett said.

 For struggling areas such as Johnstown, it could be “devastating,” he said. The unexpected added annual expense could make home ownership unaffordable for recent home buyers or prompt prospective buyers eyeing a new home or business to shy away from flood zone neighborhoods.

Longtime homeowners in flood zones wouldn’t see the rate changes, but it could make selling their homes “a nightmare” because buyers would be forced to pay the higher insurance rates, he added.

“You think you have all of your monthly expenses into consideration and something like this happens,” said Lisa Broadwater, a co-owner of The Vault Salon and Spa on Main Street.

The Vault’s doors opened downtown in the months following the act’s July 2012 passage, meaning her property falls under the new guidelines.

Broadwater’s current $300 per year flood insurance cost is likely to jump to $679, she said.

Brett said some early annual estimates are worse, jumping from a few hundred dollars to more than a thousand per year.

‘Just the beginning’

Brett said he is just beginning to field calls from worried clients.

Subsidy cuts through the Biggert-Waters Flood Insurance Reform Act just went into effect on Oct. 1, but premium rates don’t change until annual renewal notices arrive, he said.

Those affected are told an elevation certificate must be obtained, a process requiring work by a certified land surveyor, the law stipulates. That process often costs $600 to $1,000, depending on the surveyor’s fees, Brett said.

“The sad thing is that for most people with homes at street level, the elevation certificate is just telling them what they already know, that they need flood insurance,” he said.

But the results help determine new flood insurance rates for homeowners, Brett said.

Brett pointed to a policy for a West End homeowner with a $26,000 mortgage, one currently required to carry flood insurance in his “high risk” neighborhood.

The homeowner’s annual 2012 premium carrying a $5,000 deductible:  $287

His premium for next year: $1,216.

“These are people that followed the rules. They bought a property, obtained flood insurance like they were supposed to, and then they turn around and get hit with something like this,” Brett said.

CNN Properties’ Bill Trevorrow, a longtime real estate broker, described the new law as a potential “death knell” to many of Pennsylvania’s struggling downtowns.

For Johnstown, already saddled with sewage replacement mandates, “it’s like a kick in the gut,” he said.

“It’s going to make properties downtown either totally unsaleable or the owner is going to have to basically give it away to find a buyer,” Trevorrow said.

How it started

Brett wasn’t surprised Congress ushered in sweeping changes to the National Flood Insurance Program last year.

Major East Coast disasters helped put the program $25 million in debt, partly because payouts in disaster areas were sometimes ballooned by inflated local market rates, the bill’s supporters noted at the time of its passage.

“Something had to happen,” Brett said.

It was the way the Biggert-Waters law addressed it –  through widespread cuts – that shocks Broadwater.

“I realize we’ve had floods here, but this isn’t the Gulf Coast. This is Johnstown. We’re not going to get a hurricane,” said Broadwater, who will have to start paying higher rates in December. “It’s crazy.”

Trevorrow agreed.

It’s one thing if a property is being damaged regularly by flooding, he said, noting some low-lying areas across the nation see major flooding almost annually.

“But just punishing everyone. It’s absurd,” he said.

A sea change?

There’s room for hope though.

Sparked partly by real estate agent worries and confused or angry voters, lawmakers across the hurricane-prone South are seeking to delay or change the new guidelines.

Mississippi sued the federal government last month to block the rate hikes, pointing to figures that 41 percent of homeowners living in areas where flood insurance is mandatory fall under low to moderate income guidelines, The Associated Press reported.

On Oct. 10, Florida joined the lawsuit.

Even the 2012 law’s co-author – Rep. Maxine Waters, D-California – is now backing efforts that would delay rate hikes for most affected by the changes.

Under a proposal introduced last week, only homes that have been repeatedly flooded in recent years and “second homes” would see increases. Those hikes would be phased in 25 percent annually over a four-year period.

“I’m extremely concerned about reports that homeowners in certain areas are facing high and unsustainable flood insurance rates,” Waters said in a press release.

“The intent was not to impose punitive or unaffordable rate hikes that could make it difficult for some to remain in their homes.”

U.S. Sen. Bob Casey is among those who have joined the bipartisan group of lawmakers seeking to delay the rate increases, Casey’s spokesman, John Rizzo said Thursday.

“It’s essential flood insurance reform doesn’t jack up rates for residents,” Rizzo said.

Edward Yapp, U.S. Rep. Keith Rothfus’ spokesman, said their office “would like to learn more about constituents’ specific situations and assist where we are able.”

The proposed changes cleared a bipartisan committee but a date for their consideration on the House floor was not set as of this week.

David Hurst is a reporter for The Tribune-Democrat. Follow him on Twitter at

Text Only | Photo Reprints
Latest News
  • fire_23 Investigators seek cause of West End fire

    The cause of a five-alarm fire early Monday at a vacant structure in the 500 block of Dorothy Avenue in Johnstown’s West End has not been determined, according to city fire officials.

    July 22, 2014 1 Photo

  • Richland seeks loan for roof, HVAC work

    Richland Township’s plans to replace the municipal building’s roof and heating and air conditioning system will cost nearly $600,000, Solicitor Gary Costlow said.

    July 22, 2014

  • Undocumented children already arriving in state

    An influx of unaccompanied children crossing the U.S. border is spilling over into Pennsylvania, as state officials received word Monday that more than 500 are being housed in the commonwealth.

    July 22, 2014

  • Auditor cites flaws in gas drilling regulation

    Strained by limited resources and the rapid expansion of natural gas drilling in Pennsylvania, environmental regulators have failed to adequately monitor well safety or to provide clear and timely information to citizens, the state auditor general said Tuesday.

    July 22, 2014

  • Driver in fatal DUI crash will serve jail time

    A Vintondale man was sentenced Tuesday in Cambria County court to serve 16 to 32 months in the county jail for a 2011 alcohol-related crash that killed a woman.

    July 22, 2014

  • Reade Twp. water projects receive funding

    Three water treatment systems in Cambria County will receive financial assistance from the state Department of Environmental Protection to remove acid mine drainage from nearby waterways.

    July 22, 2014

  • stoystown Tractor Fest Antique tractors chugging toward Stoystown fest

    A display of a whole lotta horsepower and pulling contests will highlight the 14th annual Antique Tractor Festival.
    Sponsored by Stoystown Lions Club and Laurel Highlands Antique Power Club, the event will be held July 31 through Aug. 3 at the Lions’ park, one-half mile east of Stoystown on Route 30.

    July 22, 2014 1 Photo

  • Irish dance school wants to set toes tapping in Cambria County

    If you ever wanted to learn to dance an Irish jig, now is your chance.
    Kenny Cavanaugh School of Irish Dance, based out of Milford, Pike County, is expanding into Cambria County.

    July 22, 2014

  • Paterno son, other former assistant sue Penn State for $1M

    A son of late Penn State football coach Joe Paterno has sued the university over his dismissal from its coaching staff two years ago, saying he has been unfairly linked to the Jerry Sandusky child molestation scandal.

    July 22, 2014

  • Local briefs 7/23/2014

    July 22, 2014


What is the biggest key to reducing gun violence in Johnstown?

Tackling the area's drug problem.
Controlling folks moving into city housing.
Monitoring folks in treatment centers and halfway houses.
Tougher sentencing by the court system.
More police on the streets.

     View Results
Order Photos

Photo Slideshow

House Ads