Washington, DC – The House Committee on Financial Services, today during mark-up, passed two amendments to H.R. 3121, the Flood Insurance Reform and Modernization Act of 2007, proposed by Congressman Al Green (TX-09).  The Flood Insurance Reform and Modernization Act of 2007 takes steps to continue the evolution of the National Flood Insurance Program (NFIP) and make it more resilient and viable. 

Congressman Green’s first amendment, the Hinojosa-Green Amendment, seeks to protect affordable rental housing.  H.R. 3121 addresses a number of weaknesses in the NFIP that were exposed by the unprecedented 2005 hurricane season. In an effort to make the program more actuarially sound, the NFIP phases out subsidized rates on vacation homes and second homes.

“I believe this bill goes a long way towards bringing the National Flood Insurance Program back to solvency while moving slowly so as to not devastate citizens and communities that rely heavily on relief in the form of subsidies offered by the program.  These properties were built before our current understanding of flood plains, and prior to regulations the subsidy was provided to encourage their participation in the flood insurance program,” stated Congressman Green.  “This phase out of subsidies could increase the rents of apartments that serve as primary residences for many households.  Faced with higher premiums as a result of the loss of the subsidy, apartment owners would likely pass the increased cost of property ownership to residents in the form of higher rents.  This could be particularly harmful for low- and fixed-income renters who rely on these residences as their primary housing.  At a time when our nation is faced with a shortage of affordable housing, it may be difficult for families to successfully find other housing that is both available and affordable in these markets. This amendment would ensure that the bill does not phase out subsidies for properties that serve as a primary residence for renters.”

H.R. 3121 also includes a section regarding disclosures to consumers about flood insurance. This section requires FEMA to provide copies of flood insurance notice to insured landlords which are to be provided to their tenants and encourages landlords to provide tenants with such notice. This notice would help inform tenants about the property’s location in a flood zone, the availability of flood insurance coverage, and how to purchase coverage. Congressman Green’s second amendment, the Green-Cleaver Notification Amendment, provides landlords with additional flexibility to provide notice to tenants regarding flood insurance availability. 

“This amendment recognizes the value of notifying residents of the importance and availability of flood insurance for their contents, while giving apartment owners some flexibility in this notification process.  Apartment owners are very experienced when it comes to providing disclosures and notifications to applicants and residents. Given the abundance of paperwork, pamphlets and brochures, property owners take the appropriate steps to provide this information in the most effective and efficient manner,” stated Congressman Green.  “Apartment owners already have similar experience with renters insurance. It is in their best interest to know that the resident is covered when an event such as fire, or other damage occurs.  The same will be true for flood insurance. For example, a landlord could choose to include this information in a new tenant’s lease or any other means in which they traditionally provide information to their tenants.”