Monday, August 22, 2016

Recovering from the Great Flood of 2016

Recovering from the Great Flood of 2016

Is Your Homeowner Association Eligible for Flood Debris Removal?

The New Orleans Times Picayune reports that debris removal in several parishes following the Great Flood of 2016 in Louisiana began today. As tens of thousands of homeowners and businesses gut their properties, removing flood debris is a major step in community recovery.

An often overlooked obstacle to recovery can be FEMA refusal to reimburse local governments for the cost of debris removal in homeowner associations. FEMA often classifies homeowner association streets and canals as private property. Under this classification, a local government that removes disaster debris from a homeowner association may not be eligible for FEMA reimbursement for these disaster response costs.

A finding by FEMA that homeowner association streets and canals are private property means homeowners are solely responsible for the expense of removing debris from their community.

In large-scale disasters such as the Great Flood of 2016, local governments may petition FEMA for a determination that debris removal from homeowner associations is in the public interest. To make such a request of FEMA, local governments must certify that destruction within the community is widespread and that disaster debris in homeowner associations is a threat to human health and safety and community recovery.

If FEMA concludes that debris removal from homeowner association streets and canals is in the public interest, FEMA requires local governments to show permission from homeowners to remove disaster debris. Additionally, FEMA may also require local governments to prove a pre-existing legal obligation to remove disaster debris from homeowner associations. This may be in the form of a contractual agreement between the homeowner association and the local government or an obligation arising out of ordinance or statute. FEMA does not consider a trash removal contract to meet the pre-existing legal obligation standard.

U.S. Representatives Mark Sanford, Steve Israel, and Jerrold Nadler have introduced legislation that eliminates bureaucratic obstacles to disaster recovery in homeowner associations. H.R. 3863, the Disaster Assistance Equity Act, ensures that local governments can meet the disaster response needs of homeowner associations in the same manner as all other neighborhoods in their communities.

If your homeowner association has been denied federal disaster debris removal assistance, please contact CommunityAssociations Institute for more information on H.R. 3863 and the actions you can take to jumpstart recovery in your neighborhood. 

For more information on disaster assistance for homeowner associations, visit the Community Associations Institute website on disaster assistance. For a deeper look at the issue, read the Community Associations Institute white paper, Federal Disaster Policy and Community Association Homeowners.

Email to share your neighborhood’s disaster recovery story and if your homeowner association has been ruled eligible for debris removal assistance.


Additional resources for homeowner and condominium associations—

Thursday, February 26, 2015

The Education of Mr. Castro

HUD Secretary Julian Castro's February 11 Financial Services Committee debut was painful. Questions of issue command raised by the Secretary's Daily Show appearance were clearly answered within 20 minutes of the committee being called to order.

Committee Republicans made their points quickly and effectively: FHA is far below its statutory capital requirement, in violation of the law as they see it, and in no financial condition to reduce mortgage insurance premiums.  The only Democrat to offer an effective rebuttal was Rep. Capuano, but it wasn’t enough. The Secretary failed to defend FHA or even come armed with basic facts about the performance and condition of FHA’s book of business.

You knew it was a bad day when NAR released a statement at the hearing's conclusion offering a robust defense of the FHA premium cut. MBA's David Stevens followed suit, sharing his thoughts  in The Hill.


Two weeks later, Secretary Castro found himself back on Capitol Hill in front of a different congressional committee. That committee found a different Secretary Castro.

The Secretary Castro who testified before the House THUD Appropriations Subcommittee on February 25 was knowledgeable, in command of facts and program details, and generally acquitted himself well. While members did not question him as aggressively as FSC Republicans, this time the Secretary responded when pressed.

It is hard to see a Cabinet level official fall so flat at the beginning of their tenure and HUD, in particular, needs steady-handed leadership.

I think it fair to say that members of both parties lost some measure of respect for the Secretary and he must acquit himself well in his next Financial Services appearance. Based on this most recent performance I think the Secretary is well on his way to recovery.


One final observation. It was good to hear members asking questions of the Secretary on housing policy that had nothing to do with housing finance. There was substantive discussion on targeting housing vouchers; Moving to Work; Jobs-Plus; and the HOPWA funding allocation formula, just to name a few.

You don’t see those debates in Financial Services.

Thursday, February 20, 2014

I've Made a Huge Mistake

Rep. Baker: "Come on, can't you vote for this? It’s just a study.

Rep. X: "We just approved a big flood control project back home. I'd love to help you out. I'm sorry, I just can't."

The politics of flood insurance in less than 40 words, according to my recollection.


The bill in question was H.R. 4320 (109th Congress). As introduced, H.R. 4320 expanded mandatory flood insurance purchase requirements from the 100-year floodplain to the 500-year floodplain. The bill took fire from all directions. 

Chairman Oxley, who included the mandatory purchase expansion at the Bush Administration’s request, retreated. He asked Rep. Richard Baker to offer an amendment to strike the 500-year floodplain standard from the bill and replace it with a study. The study would be conducted by FEMA, which would report results and policy recommendations to the committee.

Even the FEMA study was toxic and an acrimonious debate ensued with committee members openly questioning FEMA's ability to conduct an impartial study. There was disagreement over what exactly should be studied and if the committee was interested in receiving policy recommendations.  

The eventual outcome? By a vote of 34 to 31, which splintered party discipline among both Republicans and Democrats, a substitute study amendment was approved. Under the substitute, GAO, not FEMA, would examine a 500-year mandatory purchase requirement and report its findings, without policy recommendations, to the committee. The underlying bill eventually died and the study never conducted.


If a simple study on expanding flood insurance coverage requirements caused such acrimony and division in the Financial Services Committee in 2006, what changed in the intervening 6 years that led to the Biggert-Waters Act?  How did members get from arguing about a study to almost unanimously passing Biggert-Waters?

Senior members of House Financial Services retired or were defeated. Reformers moved up the line of seniority. The NFIP’s debt burden couldn’t be ignored. Industry was desperate for a 5-year NFIP reauthorization. Against this backdrop, Biggert-Waters became law of the land on July 6, 2012.

About 250 days later Rep. Steven Palazzo was the first to introduce legislation reducing most Biggert-Waters premium increases. All it took was half a year, barely enough time for the ink on Biggert-Waters to dry.

In what is by any measure a spectacular shift, the House is now set to eliminate some Biggert-Waters premium increases and slow down most others. The issue has become such a high priority that Majority Leader Cantor has personally intervened, committing to bringing legislation to reform Biggert-Waters directly to the House floor.

And this brings us back to the conversation between Rep. Baker and his colleague on the 500-year floodplain study amendment. Baker simply couldn’t convince members to go along with a study they thought might somehow lead to more properties being required to buy flood insurance. Now that members are facing this as a real possibility, they're saying, "I've made a huge mistake."

Is this all that surprising? No.


What I find most interesting in this story is the decision of Majority Leader Cantor to circumvent the committee process and bring a flood insurance bill directly to the House floor. The House Republican Conference prizes regular order and quite frankly, it is unusual for Leadership to interfere with an A-committee chairman's jurisdiction.

There are political reasons for this interference that involve a Senate race in Louisiana. There are another 235 reasons in the form of cosponsors for Rep. Michael Grimm's Biggert-Waters reform bill, too.

Here's the thought I keep coming back towhy is it that Leadership and the Republican rank-and-file are unwilling to wait on Chairman Hensarling? One legislative disagreement does not a trend make or precedent set, but the fact still remains that Leadership has seized the reins on this issue.

Consider, too, that flood insurance is not the most controversial financial services issue facing House members at the moment. If members thought they are being lobbied aggressively on Biggert-Waters, they should wait until GSE reform is brought to a vote.

Biggert-Waters has been little more than a warm up for the housing finance industry. I don’t mean to oversimplify or drift into hyperbole, but this fight has strengthened industry relationships with rank-and-file Republican members in very basic, important ways. Industry roots in member districts have only grown deeper and lists to support a persistent, guided campaign of visits, phone calls, emails, and social media have been grown. It’s like how every member of Congress used to keep a very close eye on their yard sign campaign chair. It’s hard to understate the importance of voter lists and voter contacts.  

Now, it’s a grave mistake to underestimate Chairman Hensarling and truthfully, the GSE reform fight was always going to make Biggert-Waters seem like child’s play. Further, I have to believe the Leadership's intervention in Financial Services Committee jurisdiction is limited to this one issue. But that it occurred at all, and the implications for the next big housing votethat’s the real story.