State Will Not Reimburse For Home-Raising; Sandy Victims Stunned

The calls went out late Friday afternoon, traditionally the best time to dump bad news: The state of Connecticut will not use federal funds to help homeowners raise their homes in the wake of Hurricane Sandy.

Those “hazard mitigation grant” funds will apparently go only to municipal projects, like a proposal in Westport to replace the Saugatuck Island bridge.

The calls — made by Westport Fire Chief and emergency management director Andrew Kingsbury and his assistant — caused anger, despair and confusion. Approximately 30 Westport homeowners had been led to expect (by FEMA, at information sessions) that they would receive up to 70% reimbursement for the cost of raising their waterfront structures. Flood insurance does not cover that expense.

Individual homeowners have paid hundreds of thousands of dollars to raise homes at Compo Beach...

Individual homeowners have paid hundreds of thousands of dollars to raise homes at Compo Beach…

It is not clear who made the decision: FEMA or Connecticut officials. Approximately $55 million in funds are available for the state’s portion of the “hazard mitigation grant” program.

Rick Benson — a residential developer who recently built a 100%-compliant house on Saugatuck Shores, completely renovated another, and helped 8 homeowners prepare the time-consuming, complicated grant applications — estimates the “cheapest” price for raising a home in a flood-prone area is $175,000. Benson’s 8 projects range from $200,000 to $325,000. Another local proposal he heard of would cost $450,000.

“The government told homeowners they had to raise their houses, or they’d face much higher flood insurance rates,” Benson says. “But now they won’t help them out with these very expensive projects of raising them.”

One Saugatuck Shores resident calls FEMA’s projected flood insurance increases “astronomical.” He heard that a $2,500 annual policy could skyrocket to $25,000.

Tony Sousa — a 14-year resident of Saugatuck Island — has already spent $15,000 preparing his application. He’s paid for surveyors, architectural drawings and soil samples. His neighbors have paid similar amounts.

...Old Mill Beach...

…Old Mill Beach…

The 25 to 30 projects here are now in limbo. For his potential customers, Benson has already submitted comprehensive architectural plans and budgets. He advised them to spend this past weekend absorbing the news. Their next step is to decide whether to get the decision reversed, or proceed using all their own funds.

Sousa and his wife Penny are among those facing a very tough decision.

“Do we move? Take all our savings and put it into raising our house? Or do we live with the risk?” he asks. “There are not a lot of great options.”

Benson estimates that 10 to 12 homes on Compo Cove, plus another 20 or so at Compo Beach and on Saugatuck Shores, have already been lifted at homeowners’ full expense. He calls the real estate market on Saugatuck Island “soft,” noting that the only homes that seem to be selling are those already raised.

Homeowners affected by Sandy are not the only ones in FEMA limbo. According to Benson, every Westport house-lifting project proposed in the aftermath of Hurricane Irene — 14 months before Sandy — still remains unfunded.

...and on Compo Cove. (Photos by Betsy P. Kahn)

…and on Compo Cove. (Photos by Betsy P. Kahn)

19 responses to “State Will Not Reimburse For Home-Raising; Sandy Victims Stunned

  1. Bruce Fernie - Staples 1970

    A very tough call and I feel for these families but… Federal loans should be made but why should the overburdened American taxpayers be the benevolent uncle who will maintain, repair and protect luxury waterfront homes? As I say a very tough call but during these days of our insanely bloated government debt machine there are some better places for this money.

  2. Matthew Mandell

    Clearly this needs to be looked at both at the state and federal levels. While NJ home owners have gotten a lot support, I wonder why CT hasn’t.

    BTW Bruce, not all the houses out there are luxury, some have been there for years and this burden does not come easy for them.

  3. Shame on the state of Ct. Government and shame on the Feds. While it doesn’t impact us directly, the exodus from CT and lost tax revenues will continue.

  4. The Saugatuck Island Bridge is owned by the residents of Saugatuck Island.
    The residents have established a Taxing District so IRS deductible funds are collected each year to maintain the private roads and the bridge. Town
    funds should be used to help homeowners and not used for the Bridge.

  5. Bruce Fernie doesn’t know what he’s talking about. These aren’t “luxury” houses. People got wiped out by the hurricane, and they need disaster assistance just as do people in New Jersey or other parts of the country where there are floods, twisters, hurricanes or other disasters. FEMA’s higher flood insurance rates are another double wammy for flood victims – you pay a fortune to raise your house to safe FEMA levels and then they still jack up the flood insurance as if youi’ve invested nothing!

    • Bruce Fernie - Staples 1970

      Actually I do. As I said it’s a tough call and I wish all the families well, but I remember when these homes were being built in an area that most agreed was in the line of fire… and they were built anyway. As far as being ‘luxury’ homes… if you look at value, every single one falls into the luxury category on a national, state and regional level, If you have a home on a coast it is your obligation to understand the consequences and costs.

  6. Dan, et al:
    The flood insurance premiums have already impacted sales, and it doesn’t even have to be a home near Long Island Sound.
    Here are two examples from fellow Realtors®:
    A house in Trumbull, near the reservoir had flood insurance of $300.00. With the new FEMA maps and implementation of the Briggs-Waters Act (short version is flood insurance is no longer subsidized), the flood insurance cost soared to $3,000.00 and effective killed the seller and buyer moving forward.
    Another home adjacent to Jennings Beach in Fairfield, had its insurance jump to $11,000 a year. It has been languishing for many months. I’m lucky that our flood insurance only doubled (plus the cost of the elevation survey now required for just a quote).

  7. I’m with @Bruce on this one.

    Every few years we contemplate a move by the water and then some weather event puts off our decision. Sandy may have put it off for good.

    Why should my tax dollars subsidize your decision to live at the water’s edge? It shouldn’t – just like yours shouldn’t cover mine if my house slides down the side of our hill, or if some of our towering Maples wipe us off the map (those are the risks of living on a hill in the woods).

    No one is forcing you to raise your house – but FEMA (again our tax dollars) funds shouldn’t go to rebuild your house if it’s in harms way (e.g. the Carolina Coast) and you shouldn’t be allowed to have “cheap” flood insurance that in now way could ever cover even a portion of the damage a flood would cause.

    Maybe it’s not a good idea to live so close to the water?

    • Mr. Holmes, homes near the water are taxed based on that proximity to the water. A home in Saugatuck Shores and Compo Beach areas will have a much higher tax amount than one inland (all other things being equal). It’s not a free ride.

  8. Eric William Buchroeder SHS '70

    Bill, if those houses aren’t “luxury houses” I don’t know what are. Comparing them to NJ isn’t totally valid IMO but the same general situation assessment holds for them too. Fifty years ago we (my low-income single mom, sister and I) considered buying property on Saugatuck Shores for its affordability at the time and came to the conclusion, correct in my opinion, that there was just too much risk of flooding. Others made different decisions and the consequences are obvious. I’m with Bruce on this.

  9. Just spoke to Cindy at the ‘Super Storm Sandy Hotline’ (866-272-1976) who confirmed a change in FEMA reimbursement as established by the State of Connecticut Department of Housing (DOH) (http://www.ct.gov/doh/cwp/view.asp?a=4513&q=530630) . It seems that the basic change is that FEMA will no longer reimburse home owners the 70% for remediation (aka ‘raising’) exclusively but that the reimbursement for repairs may include raising by a Connecticut approved contractor. This IS new as of today and, according to Cindy, is being driven by the DOH but she could not point me to anything published. The link above will be updated but currently outlines the Owner Occupied Rehabilitation and Rebuilding Program (OORR) which includes some information I wasn’t aware of. For instance, an owner occupant needs to sign a promissory note that they A) lived in the home during Sandy and B) won’t sell the home for at least 5 years after the reimbursable repairs have been completed. If you’re an owner of an investment property with tenants, the guidelines are as long as my arm. BTW, reading the OORR guidelines are sure to cure the insomnia I know many of my 06880 friends suffer from.

  10. This is not an issue of whether or not it’s “luxury” housing, but whether the government should continue subsidizing a hazard that will become increasingly costly. Raising a beach home is only a short-term fix, assuming sea levels continue to rise. In 15 years will the government be obligated to raise these houses again?

    • Eric William Buchroeder SHS '70

      Yes and it should be reminded once again a hazard that has existed for many, many years and was entirely avoidable. Caveat emptor.

  11. Dan Lasley (Laz)

    For me, the issue is that this is a change after the fact. For 20 years or more, if you chose to raise your home to the “FEMA level” the gov’t would pay a large portion, as it reduced their liability against the insurance they backed. If you raised your house, your premium should not go up, but the likelihood of serious damage from floods was greatly reduced, saving the gov’t money. This is comparable to adding fire-alarm monitoring to reduce your insurance costs – you don’t eliminate the possibility of a fire, you reduce the amount of damage that might occur.
    There have been serious floods over the years (1992, 1998?, 2005?) and the policies did not change. Why has Sandy become the last straw?
    And yes, NJ and CT shorelines should be treated the same.
    PS: I lived on Saugatuck Island for many years.
    PPS: The Town has an interest in replacing the bridge because they can’t get emergency equipment out to the Island during high water, as Canal Road (a town road) is often submerged. I’m not saying they should do it, but they have an interest.

    • Not sure we should hold FEMA policy out as an example:

      http://www.npr.org/2014/01/01/258706269/federal-flood-insurance-program-drowning-in-debt-who-will-pay

      So FEMA is $24B in debt because as you said – FEMA would pay a large portion of your home improvement (raising the house) – in order to reduce their potential liability later (since of course the insurance premiums never came close to what they’d have to cover in the event of a disaster).

      Sounds like FEMA was screwed either way – either they subsidize your home improvement or you stick them with a bill when it floods.

      I’m glad someone somewhere has finally come to their senses. This fiscal can kicking has to stop – and stopping with a bunch of people who choose to live on the water and then complain when the water pays them an unscheduled visit is not something I want my tax dollars allocated towards.

  12. The many comments highlight the complexity of the issues. Also, I would like to verify costs for the raising of a house. I tend to be skeptical of builder inputs, but less so with the experiences of individual homeowners. I think many of us are concerned with judgments made as to housing locations that raise risk issues, whether on steep, fire prone hillsides in CA. or in low lying flood/hurricane prone areas. While we cannot turn back the clock to a time many years ago when Federal flood insurance at below market rates was a major factor in shoreline over-development, we should also be cautious now in taking actions that do not address the long term problem. There are also ancillary issues, such as Westport height limitations on flood elevated homes. Town regulations remedy the issue as to the raising of an existing structure, but do not and should not permit the same for empty lots or for homes that are torn down by a developer to construct a larger, new “spec” home. I will be tracking the facts on the FEMA flood insurance program since it affects many in RTM District One.
    Don Bergmann, RTM District One Representative

  13. I love the “Why should the Taxpayers pay for this.” The coast of America is flooding is do to the burning of fossil fuels. I am one Taxpayer who would like to rip you out of your SUV that gets 13 miles to the gallon and run you over with it.

  14. I wonder what comments we will get when Hawaii leaves the union of the United States and becomes an independent Island Nation because flood insurance cost to much. Japan can give them a much better deal.

  15. Stephen, I must confess that I am an owner of a vehicle that does not get the greatest gas mileage in the world, but if I compared my carbon foot print to other people in this town…it is minuscule. I love hearing from people who live in large homes who have the lights a blazing…AC cranked….and then drive a Prius and claim environmental responsibility… Also, no need for such a hostile statement…ripping people out of there car and running them over because their car gets 13 miles to the gallon? Really?