Low-cost loans would help homeowners elevate their houses - FOX 13 News

Low-cost loans would help homeowners elevate their houses

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It is still just a nugget of an idea, but it may be a golden nugget: Offer no money down, low interest, long-term loans to homeowners to elevate their houses. It is a possible way to escape flood insurance premiums that can now cost thousands or even tens of thousands of dollars per year.

Last year, Congress mandated a new flood insurance pricing structure that essentially makes more than 100,000 houses in the Tampa Bay area unaffordable and unsalable.

Yet raising all of those houses would cost hundreds of millions of dollars.

"It's a financing issue," said St. Petersburg City Council chair Karl Nurse. "How would the government either facilitate this, or how would the private sector do it, because the alternative is essentially people walk away from houses."

Nurse is an early advocate of the loans, which would be an expansion of an existing program in Flagler County called "PACE". Pinellas County is already considering adopting PACE, which would provide low-cost loans for strengthening homes against hurricane winds or saving energy.

Asked about expanding the program for flood mitigation, county commissioner Susan Latvala told FOX 13 News "I think that's an excellent idea, especially with the most recent news that we've had, I think that would be a wonderful idea."

A spokesman for the existing PACE program in Flagler County told FOX 13 News the enabling state legislation does not cover flood mitigation, so the state law would have to be amended.

Insurance broker Ron Holehouse, who sits on St. Pete Beach's planning council, was already advocating PACE for wind mitigation. He gave the example of one house in St. Pete Beach that reduced its flood premium from about $8,000 to $697 per year "...just by an elevation."

Escalating costs for wind coverage was Holehouse's original motivation. Flood insurance is a newer, and in most cases, bigger problem.

"It's just an awful lot of economic impact dumped on people in a very short period of time, so you start being as creative as possible to help them find ways to resolve the issue," he explained.

He is now looking for a local state lawmaker to champion amended enabling legislation.

The cost of raising a house above the floodplain varies widely, but a general range appears to be $50,000 to $100,000. In theory, the cost of borrowing that much money is offset by much lower flood insurance premiums.

The new insurance pricing scheme penalizes customers at a high risk of flood damage, but rewards those who elevate structures out of harm's way.

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