Bill Toner buys vacant homes in the Romulus area and rehabs them. Late last year he bought one that FEMA placed in a flood zone. (David Coates / The Detroit News)
Romulus — Residents call the neighborhood around Romulus' Oakbrook Street the Hale Creek/Carter Drain area and, despite the name, no one can remember it ever experiencing serious flooding.
So this year when the Federal Emergency Management Agency declared the area was in a floodplain, many locals were puzzled — and afraid for the financial ramifications.
When FEMA places a parcel in a flood zone, the owner is required to buy flood insurance. At costs ranging from several hundred to several thousand dollars a year, that requirement can be tough to meet. And even if a resident has lived in the same home for decades without ever seeing flooding, proving FEMA is wrong can be costly.
Most recently, the residents in Romulus felt the brunt of FEMA's work.
A new evaluation of the city — released in February — placed roughly 1,000 parcels in a flood zone. After several months and tens of thousands of dollars spent on appeals, roughly half of those properties have been taken out of the zone. But many community members were outraged at having to pay for something they believed was unnecessary.
"Romulus tends to be a headwater for the watershed here," said Tim Keys, the city's director of planning and community development. "Historically, we've never had flooding issues at all."
Prior to the release of the FEMA map, city officials had contracted for a $70,000 engineering a study to provide federal officials with updated information about what Romulus properties were truly at risk. Their hope had been to head off the incorrect designation of properties as being in the flood zone. After FEMA placed parcels in the flood zone, Romulus opted to enroll in FEMA's National Flood Insurance Program
Five years ago in Macomb County, a similar scenario occurred when FEMA introduced a new flood map, resulting in outrage and calls for changes to the flood insurance program. Now, the agency is assessing Wayne County, prompting calls for the program's outright elimination.
Following Hurricane Katrina in 2005, Congress gave FEMA the ability to borrow more money to cover its flood insurance commitments. The resulting debt incurred has only added fuel to those seeking the program's dissolution.
"This program was created in 1968, and we started writing policies in 1972," said U.S. Rep. Candice Miller, R-Harrison Township, in a speech on the floor of the House in May. "Today, this program is almost $18 billion in debt.And FEMA says that this debt will never be paid off.Never. So not only is the federal government improperly running a flood insurance program; it is operating a very bad flood insurance program."
Casting a wide insurance net
Since 2004, FEMA has been modernizing its national flood map, which details the properties at risk. But FEMA often bases its map revisions on outdated information from county and state governments, placing wide swaths of territory that are not prone to flooding in the "at-risk" category. And the onus — as well as the cost — is on property owners to prove the federal government is wrong.
Created more than 40 years ago, the flood insurance program was designed to save taxpayers money. By giving homeowners the chance to buy flood protection, federal officials hoped to cut down on the escalating costs of disaster relief.
Communities that agree to participate in the program make cheaper federal insurance available to their residents. In communities that remain out of the program, as Romulus was when it first received FEMA's maps, private insurance rates can be cheaper.
Critics say the flood insurance program casts a wide and inaccurate net trying to draw in as many homes as possible to pay for flood insurance. When FEMA's latest map revisions arrived in the offices of Dearborn City Hall in February, they indicated that an additional 1,392 properties were considered at risk from flooding. City officials fielded calls from confused and scared residents and helped guide them through the federal agency's appeal process.
As a result, all but 246 of those properties were determined out of the flood zone, said Mary Laundroche, the city's public information director.
"It's important to note that Flood Insurance Rate Maps are living documents," said Laurie Kuypers, a floodplain management and outreach specialist with FEMA, in a written response to questions. "The intent behind identifying and mapping flood risk is to show as accurately as possible the current risk. This is why FEMA and accepts new data and studies from communities, developers, the State of Michigan and other agencies for incorporation into our (maps)."
Real estate buyers beware
Bill Toner, a professional rehabber, had no worries about flood insurance last year when he purchased a vacant home on Oakbrook Street in Romulus. In the neighborhood just south of Detroit Metro Airport, plenty of homes are vacant after residents couldn't make their mortgage payments. Toner had planned to profit off the sale to a family that qualifies for a Michigan State Housing Development Authority loan, effectively giving them the chance to own a home they wouldn't normally have been able to afford. In February, however, the federal government placed his property in a flood zone. The added insurance costs threatened to derail the deal.
Ultimately, Toner's property was among many in the Oakbrook neighborhood that were removed from FEMA's floodplain. But the ordeal cost him three months in delays and taxes plus the $600 spent on hiring a surveyor to examine his property and submit an appeal to FEMA.
Those whose appeals are successful are supposed to be reimbursed by FEMA for any insurance costs incurred to date, but the months in limbo are unsettling for many.
Bill reauthorizes program
Complaints about the program caught the attention of U.S. Rep. John Dingell, D-Dearborn.
"I know that there have been concerns raised from many of the communities in my district about the FEMA flood plain maps," Dingell said in a written response to questions. "I am actively looking into this issue and my staff has been in contact directly with our mayors. It is clear that something must be done."
But Dingell's concern and Miller's efforts to eliminate the program may be for naught.
On June 29, Congress approved a reauthorization of the National Flood Insurance Program that was tucked in to the massive transportation bill. President Barack Obama is expected to sign it into law.
That bill would fund the flood program for five more years.