NATNews Blog > October 2016 > NAHB says HUD proposed elevation standards a ‘disaster’ for housing affordability

    NAHB says HUD proposed elevation standards a ‘disaster’ for housing affordability

    10/31/2016 7:26:20 AM
    In the face of increased flooding risks and rising sea levels, the U.S. Department of Housing and Urban Development (HUD) proposed elevation standards for all HUD-supported properties. For the first time in nearly 40 years, HUD is proposing to establish higher elevation requirements for properties seeking HUD assistance or Federal Housing Administration (FHA) mortgage insurance.
     
    Specifically, HUD's proposed rule would require that properties deemed 'non-critical' to be elevated two-feet above the site's base flood elevation (also called 100-year floodplain), a term commonly used in floodplain management. Properties considered 'critical,' such as hospitals, nursing homes, and police/fire facilities, would be elevated to three feet above the base flood elevation or the 500-year floodplain, whichever is greater. Read more about HUD's proposed rule.
     
    "Our nation is faced with mounting and compelling evidence that future flooding events will be increasingly costly and frequent," said HUD Secretary Julián Castro. "If we're serious about protecting people and property from flooding, we have to think differently than we did 40 years ago. Today we begin the process of aligning our regulations with the evidence to make sure taxpayer dollars are invested in the most responsible and resilient manner possible."

    Ed Brady, chairman of the National Association of Home Builders (NAHB), released a statement saying the proposed rule would severely disrupt the housing market and harm affordability for millions of Americans living in areas that are designated under an expanded floodplain definition, where in many cases the odds of facing a flood event are extremely remote.
     
    “HUD has vastly overstepped its bounds by proposing new rules that are inconsistent with the requirements for new construction under the National Flood Insurance Program,” Brady said. "HUD must stick to the original intent of the president's executive order by stipulating that expanded floodplain rules only apply to federally funded projects - and not unnecessarily expand this definition by imposing costly requirements on the FHA multifamily and single-family mortgage insurance programs.”
     
    Brady said multifamily structures face an added burden under HUD's proposed rule as they will have to comply with mandatory elevation requirements for new construction or substantial rehabilitation in areas outside of the 100-year floodplain in order to qualify for HUD-insured financing.
     
    In addition to proposing higher vertical elevation standards for HUD-assisted and insured properties, the Department is also proposing to enlarge the commensurate horizontal floodplain area around the site for certain types of federally supported properties.
     
    The proposed rule would also revise HUD's Minimum Property Standards for single-family homes with mortgages insured by FHA and for public housing developments. HUD would require that the lowest floor in both newly constructed and substantially improved structures located within the 100-year floodplain be built at least two feet above the base flood elevation as determined by best available information, but would not consider the extent of horizontal flooding. Elevation standards for manufactured housing receiving mortgage insurance are not covered in this proposed rule.
     
    “HUD's proposal is a disaster for housing affordability,” Brady said. “It will trigger delays and higher construction costs for properties facing little risk of flooding. In turn, these costs and delays will make housing cost-prohibitive for working families in communities located in and around floodplains."
     
    Background
     
    From 1959 to 2005, floods caused 4,586 deaths in the U.S. With climate change and associated sea-level rise, flooding risks have increased and are anticipated to continue increasing. The National Climate Assessment (May 2014) projects that extreme weather events, such as severe flooding, will persist throughout the 21st century causing significant damage to infrastructure, including buildings, roads, ports, industrial facilities, and even coastal military installations. Since 1980, flooding events in the U.S. resulted in more than $260 billion in damages. This year alone, the U.S. has experienced two "once-in-a-thousand-year floods," several 500-year events with 38 Presidentially declared major disasters.
     
    In April 2013, the Hurricane Sandy Rebuilding Task Force announced that all Federally funded rebuilding projects related to Hurricane Sandy must meet a consistent flood risk reduction standard that takes into account risk from extreme weather events, sea level rise, and other impacts of climate change. In his Climate Action Plan, the President called on Federal agencies to scale this up nation-wide to ensure Federal investments are not wasted in the same structures after repeated flooding events.