Hurricane Florence Magnifies Need to Extend and Reform National Flood Insurance Program
As Hurricane Florence made landfall this morning near Wrightsville Beach, NC, the storm’s large size and slow speed are expected to produce severe flooding, affecting millions of individuals who have evacuated affected coastal areas and thousands of businesses in the Carolinas. (National Hurricane Center, Hurricane Florence)
As communities in the Carolinas and beyond contend with catastrophic storm surge, rain deluge, high winds and loss of property, Real Estate Roundtable President and CEO Jeffrey DeBoer expressed concern about the disaster and its victims, encouraging those in the industry to participate in relief efforts.
- Today, President Trump announced more than 3,800 Federal Employees, including more than 1,000 from the Federal Emergency Management Agency (FEMA), are working with State and local partners to respond to Hurricane Florence. (White House Statement, Sept. 14)
- In the wake of last year’s Hurricane Harvey disaster in Texas, policymakers in Washington are again expected to appropriate disaster relief this fall and address legislation reforming the National Flood Insurance Program (NFIP), scheduled to expire on Nov. 30. (Roundtable Weekly, Sept. 8, 2017)
- As communities in the Carolinas and beyond contend with catastrophic storm surge, rain deluge, high winds and loss of property, Real Estate Roundtable President and CEO Jeffrey DeBoer expressed concern about the disaster and its victims, encouraging those in the industry to participate in relief efforts.
- DeBoer stated, "Action is needed to help assist families today and help facilitate recovery for the future. For our part, members of The Real Estate Roundtable, and everyone involved in the broader real estate industry, should do what they can to provide immediate assistance. The National Voluntary Organizations Active in Disaster (NVOAD) lists organizations where you can donate time, money or other resources."
- "The Real Estate Roundtable has also activated our industry public-private information sharing partnership with the federal government (Real Estate Information Sharing and Analysis Center – REISAC) in an effort to provide ongoing industry updates on a range of critical matters arising from Florence’s landfall – such as search and rescue efforts by the National Guard; anticipated flooding in communities as the storm’s impact moves eastward; refuge information provided by the Red Cross; energy disruptions; and phishing scams on social media,” added DeBoer.
- As legislation moves on Capitol Hill this fall to extend and reform the NFIP, The Roundtable plans to advocate for reforms that will assist housing re-development in flood-prone areas; help protect the nation's commercial and multifamily business-owners,
their properties, and residents; and foster resilient and cost-effective infrastructure.
President Trump announced more than 3,800 Federal Employees, including more than 1,000 from the Federal Emergency Management Agency (FEMA), are working with State and local partners to respond to Hurricane Florence. (White House Statement, Sept. 14)
- The Roundtable has also advocated for a voluntary exemption for mandatory NFIP coverage if commercial property owners have adequate flood coverage.
- Under the NFIP, commercial property flood insurance limits are very low – $500,000 per building and $500,000 for its contents. Lenders typically require this base NFIP coverage, and commercial owners must purchase Supplemental Excess Flood Insurance for coverage above the NFIP limits. A niche market of carriers typically provides this type of excess coverage. The Roundtable and its coalition partners support NFIP reauthorization with the inclusion of provisions that permit the "commercial exemption."
- The Real Estate Roundtable and 14 other industry groups urged Congress in a June 12, 2017 comment letter to reauthorize and reform the NFIP to help protect the nation’s commercial and multifamily business-owners, their properties, residents, and the jobs they create from the financial perils of flooding.
- In November 2017, the House passed the 21st Century Flood Reform Act (H.R. 2874), which would reform and reauthorize NFIP for five years. The bill included: funding for flood mitigation assistance; lower flood insurance rates, support for the private flood insurance market, modernization of flood zone mapping; and flood mitigation practices for homebuilders and land developers. However, the measure was not been taken up in committee in the Senate. ( Roundtable Weekly, Nov. 17, 2017)
The Roundtable will continue to work closely with lawmakers and our coalition partners to ensure that the NFIP is renewed prior to its expiration date on Nov. 30, 2018.
EPA to Commence Review Period of New ENERGY STAR Building Scores; Office, Industrial Certifications Temporarily Suspended Pending Further Analysis
Last month the Environmental Protection Agency (EPA) announced the first updates to its ENERGY STAR scoring models in over a decade, as the agency moved from 2003 to 2012 data for its foundation to rate buildings. (See Roundtable Weekly, Aug. 17.) EPA announced yesterday that it will commence a "review period" to solicit stakeholder feedback on these recent ENERGY STAR score updates. Certifications for office, industrial, and certain other building categories will be temporarily suspended during this review period.
EPA announced yesterday that it will commence a "review period" to solicit stakeholder feedback on recent ENERGY STAR score updates. Certifications for office, industrial, and certain other building categories will be temporarily suspended during this review period.
- ENERGY STAR is the key federal label that rates and compares U.S. buildings' energy performance. Currently, EPA lists 34,625 buildings and plants, representing more than 5 billion square feet of commercial space across the country, as ENERGY STAR certified. Through initial analyses of Sustainability Policy Advisory Committee (SPAC) membership, The Roundtable learned that the application of the new 2012 data appears to result in materially different outcomes on scores depending upon building size, geography, and source of heating, and these outcomes were inconsistent. RER on behalf of the industry highlighted the issues to the EPA, and the EPA responded with the announced review period.
- "The review period will help us ensure that the models are working as intended to deliver energy performance metrics that empower … the business case for owning and operating energy-efficient buildings," the agency stated. During the review period, EPA and real estate stakeholders will have the opportunity to assess variables such as a building's size, location, and fuel mix, to fully consider if these and other factors have had an indiscriminate impact on the new scoring models.
- "We commend EPA in taking this step toward transparent decision making so our industry can recommend any necessary, data-driven changes to ENERGY STAR's updated scoring models ," said Roundtable President and CEO, Jeffrey D. DeBoer. "The Roundtable and our Sustainability Policy Advisory Committee look forward to partnering with EPA during its review period."
- Other federal agencies, state and local governments, and non-governmental organizations frequently rely on ENERGY STAR's tools and rating system for their own programs related to building energy efficiency. EPA advised it will "coordinate with program implementers and policymakers that leverage the ENERGY STAR score on the appropriate use of the new metrics during the review period."
The review period and temporary suspension of ENERGY STAR building certifications do not apply to multifamily, data center, hospital, senior care communities, and manufacturing facilities, according to EPA.
Ways and Means Passes “Tax Reform 2.0” Legislation; House GOP Leaders Plan September Floor Vote
The House Ways and Means Committee yesterday passed “Tax Reform 2.0” legislation along party lines (21-15) that would make permanent individual and pass-through business tax cuts set to expire at the end of 2025. House leaders plan a full chamber vote by the end of this month to highlight the GOP’s signature economic policy achievement before the November mid-term elections. (House Ways and Means Committee Mark-up Resourcesand Reuters, Sept. 13)
House Ways and Means Chairman Kevin Brady (R-TX) during the "Tax Reform 2.0" mark-up on Sept. 13.
- The proposed legislation consists of three bills that would make permanent the individual and pass-through business provisions of the Tax Cuts and Jobs Act (P.L. 115-97); boost employer and individual retirement plans; and allow startup businesses to write off more of their costs. (Ways and Means summary of Protecting Family and Small Business Tax Cuts Act of 2018 – H.R. 6760)
- House Ways and Means Chairman Kevin Brady (R-TX) commented on the 2.0 package in an interview with CNBC’s Squawkbox, “We expect to have it ready for a floor vote in September. Locking in the permanence, we think, is fair and it’s pro-growth, creating another million and a half new jobs in the long run.”
- Despite statements by Brady and House Speaker Paul Ryan (R-WI) about a full House vote this month, attracting support from GOP incumbents in high-tax states may be difficult due to a permanent extension of the new cap on federal deductions for state and local tax deductions (SALT). The tax reform package is also unlikely to pass the Senate without support from Democrats, although the three House bills may be considered separately.
- The nonpartisan, congressional Joint Committee on Taxation released a report on Sept. 12 estimates that the House’s second round of tax cuts could cost more than $657 billion over a decade. The costs of making the tax cuts permanent alone would cost about $631 billion, according to the report.
The House will be out of session until Sept. 25, which gives Congress four days to pass government funding by Oct. 1 to avoid a shutdown. Yesterday, House Appropriations Chairman Rodney Frelinghuysen (R-NJ) announced at a meeting of House and Senate conferees that a deal has been reached on a continuing resolution to keep all of the government funded through at least Dec. 7.