September 19, 2019
As if owners of apartment complexes, townhomes and condominiums didn’t have enough on their plates to worry about, now comes another concern. Specifically, flooding. In an article written for Multifamily Executive, Kevin Donnelly with the National Multifamily Housing Council (NMHC) pointed out several concerning facts when it comes to extra water in residential units.
According to the National Oceanic and Atmospheric Administration (NOAA), the remainder of the 2019 hurricane season will likely bring a higher-than-normal average of storm activity. That forecast was issued in early August 2019. To date, Hurricane Dorian pummeled the Carolinas, and Tropical Storm Imelda is currently dropping a lot of rainfall on Southeast Texas (just two years after the devastation of Hurricane Harvey). This means that “flooding in coastal markets is especially worrisome this year,” Donnelly said.
While properties in high-risk areas are more vulnerable to issues such as storm surge and resulting flooding, the threat of flood damage extends beyond the obvious, designated flood zones.
New York University’s report, “Housing in the U.S. Floodplains,” pointed out that 34% of housing units located in the 100-year designated flood plain are renter-occupied. Additionally, 28% of housing units in both the 100-year and combined floodplains were in multifamily buildings. The report, incidentally, was released in May 2017 — before Hurricane Harvey and other flooding storms menaced the United States.
Nor is it coastal regions that are in the crosshairs of flooding. Roughly half the flood disasters since 1990 took place in landlocked states, according to the National Association of Realtors.
The flood insurance market is relatively weak. The National Flood Insurance Program is under pressure, while private insurance providers’ policies can be limited in scope. This, Donnelly said, can create “significant vulnerabilities for multifamily owners and operators.”
Donnelly pointed out that the NFIP currently operates under a series of short-term extensions; the most recent is set to expire September 30, 2019. While Congress is examining two proposals that would re-authorize the program for five years, additional program reforms are necessary. “Without a longer-term authorization,” Donnelly said, “multifamily owners and operators face uncertainty and growing risk as flood threats continue to rise.”
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