Bloomberg News discovers Greenwich FEMA regs

FEMA House, the "Greenwich Executive" model

FEMA House, the “Greenwich Executive” model

A reader sent along this Bloomberg Story:

Greenwich Stilt Houses Foreshadow Impact of New FEMA Maps

In the coastal areas of Greenwich, Connecticut, the latest housing craze requires hydraulic jacks, pylons and stilts. One home towers over its neighbors like a cruise ship. Others look like expensive tree houses.

“People are stopping in to ask us about it,” said Patrick Grasso, 59, a resident of the hedge fund enclave who jacked up his 1920s waterfront house about 3 feet (1 meter). “People want to know how long did it take and how much did it cost.”

Ten months after Hurricane Sandy, Greenwich is among the first U.S. municipalities to adopt revised flood maps from theFederal Emergency Management Agency that predict fiercer waves and higher storm surges. In doing so, the town has fallen in line with a federal initiative meant to thin the density of low-lying coastal populations, prepare for more damaging weather and reduce rebuilding costs borne by taxpayers.

The maps add as much as 5 feet to previous predictions of how high the waters of Long Island Sound would rise during a 100-year storm like Sandy. Starting next year, homes in surge areas across the country won’t qualify for flood-insurance rates based on the old maps. That means some homeowners will face a choice between paying as much as $150,000 to raise their houses or accepting premium increases as high as $20,000 a year.

12 Comments

Filed under Buying/Selling Greenwich Real Estate, Waterfront

12 responses to “Bloomberg News discovers Greenwich FEMA regs

  1. Toonces

    I wonder where that $20k annual insurance estimate is coming from. I’ve spoken to two insurance companies about flood insurance on a home that is 2 feet under the required height in a flood zone and the estimates I have gotten range from 6 -7K. That’s quite high – but no where near 20K.

  2. Anonymous

    it’s not so much the current elevation but rather if the property is mapped in the ve zone vs. the ae zone.

  3. Anonymous

    If you’re in a VE, you’re screwed unless you’re very liquid. Wait till mortgage co./servicers do escrow analysis for those who have tripled+ insurance premiums. DTI’s going to go thru the roof–no pun intended–and suddenly things will go wildly unaffordable for those on the fringe. It’s ridiculous to think of being “on the fringe” with respect to affordability on a million+ mortgage, but that’s the market. In other words, there’s plenty in this town (and others) at that level who fake it till they make it, i.e. a 10+ point swing in DTI suddenly means no new Range Rover lease renewal in January.

    Irony is that FEMA payouts under total loss are minimum 75% severity on a $1MM mortgage to a lender. I don’t think they get that, yet.

    • you’re screwed unless you’re very liquid

      I believe it’s that very liquidity that’s at issue here!

    • just_looking

      If you believe that we will not see another 100 yr flood for at least 50 yrs, then you just pay off your mortgage and forgo the flood insurance, right?

      • I believe the town will still require compliance because it claims that FEMA rates are based on the number of compliant structures in a zone, thus Dainne Fox won’t tolerate your existence in her flood map. She can’t force you to raise your house but she can prevent you from installing a new roof or updating bathrooms, and she will.

        • Just_looking

          Oh, I thought the issues was mortgage co required flood insurance. So no mortgage, no insurance. I am pretty simple.

    • just_looking

      What do you mean “payouts under total loss are minimum 75% severity”?
      A $1MM loan, on say a $1.2MM property reflects a lot of land value, that should be subtracted out to get the value of the house itself that need to be replaced, right?

      • Anonymous

        fair enough. your 1.2 makes an assumption for land that is (or was recently) 3′ underwater is worth anything. i’m making the assumption that it’s not.

        since i manage a sizeable portfolio of mortgages, some of which suffered katrina and sandy fate (i.e., traversed via a boston whaler vs. a honda civic), my view is somewhat jaded.

        • Just_looking

          Agree if it stayed under water, but if really is once in 100 years, then the land really keeps it value, or most of its value, right? Then just the structure need replacing, but I don’t know whatbthe ratio of land v. structure for the typical home, if there is one, (like 30% land 70% structure) or if the range of ratios is too wide.

  4. Anonymous

    Written by Annie Linskey — from Old Greenwich.