Marlo Lutz, 44, and her daughter Harlie, 12, leave their home in Toms River, N.J., after checking the progress of ongoing construction. Earlier that day, a crew poured new concrete piers to lift the structure 13 feet above sea level. Newly-redrawn FEMA maps of the region’s flood zones placed the Lutz’s home in a high-risk category, requiring them to lift the property to mitigate future flood damage. Photo: John Makely / NBC News

By Miranda Leitsinger
3 September 2013

TOMS RIVER, N.J. (NBC News) – Thousands of homeowners in New York and New Jersey impacted by Hurricane Sandy are facing a tough choice that may thwart their efforts to rebuild: Comply with costly new federal construction guidelines or prepare to pay annual flood insurance rates that could top $20,000.

New federal flood maps revealed in June added 68,000 structures in New York City and thousands more in New Jersey to flood zones. Now, affected homeowners are being forced to make drastic changes to their residences, such as elevating them on pilings, or incur punishing new insurance premiums that will take effect by mid-2015. Given the new rules, many Sandy survivors are grappling with whether they should alter their properties – or leave.  

“We are faced with something that we can’t overcome,” said police officer Kevin Faller, 52, a Toms River resident who has decided to give up his home rather than comply with the new requirements. Having already lost hundreds of thousands of dollars in home equity post-Sandy, Faller said he and his wife could not afford “this tsunami of expenses coming toward us.”

The Federal Emergency Management Agency began updating coastal flood maps across the country in 2009, a process it expects to complete by 2017. In New York City and New Jersey, the work began a few years before Hurricane Sandy struck on Oct. 29, 2012, damaging or destroying 365,000 homes in New Jersey and another 20,000 in New York. After a public comment period, the region’s maps are expected to become final by mid-2015, putting into effect new insurance premiums.

The agency, which has released estimates showing that rates could range from a few hundred dollars for the most compliant residences to $1,800, $10,700 and more than $20,000, says individual premiums will vary and homeowners must consult an insurance agent to determine what they will pay.

Making matters worse for coastal homeowners, federally subsidized flood insurance for primary residences will start to phase out by late next year, eventually forcing about 1.1 million property owners to pay the substantially higher full-market rates. A law passed by Congress last summer eliminated subsidies for the National Flood Insurance Program, which is $24 billion in debt in the wake of massive storms such as Hurricane Katrina.

“Unfortunately, [Sandy survivors] are suffering through this catastrophic event and they are looking at increased insurance premiums,” said Bill McDonnell, FEMA’s mitigation branch director for New Jersey and an agency specialist for New York. “What we are hoping, though, is that [Sandy] has raised the awareness of the probability of this occurring again” and that homeowners “mitigate their properties to become more resilient.”

“They may be putting out more money now,” he said. “But in the end they are going to suffer less damage to their property and the potential loss of life as well.”

With that in mind, some families are moving ahead to comply with the new requirements despite the cost. Based on an early map released by FEMA in mid-December, Marlo Lutz, 44, and her husband, Darrin, 47, decided to elevate their two-floor Toms River home to 13 feet on pillars and piers, a $65,000 investment that required cashing in a college fund and raiding savings.

“I’ll never have to worry again when there’s a storm,” Marlo said. “Everything about it is just going to be better for us.”

In Breezy Point, N.Y., a coastal enclave hard-hit by Sandy, homeowner Jim Kelly has made a similar calculation. So far, Kelly has spent $104,000 to raise his home to 8.5 feet, with more work to go. He and his wife have used savings and dipped into their 401(k) plans to help cover construction costs, which are expected to reach $220,000. [more]

$20,000 a year for flood insurance? Sandy survivors face tough rebuilding choices

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