PORTLAND, Maine — Maine homeowners and municipalities along waterfronts are caught at the complicated center of three major forces: changing sea levels, flood risk assessments and federal flood insurance policy.
The changes all stand to affect development and insurance prices along the coast and the state’s inland waterways, an issue that is receiving increasing attention as the Federal Emergency Management Agency rolls out preliminary flood risk maps for Maine counties.
So far, the agency has released maps for seven counties: Cumberland, Hancock, Knox, York, Lincoln, Waldo and Sagadahoc.
Those maps could have high stakes for individual property owners and towns, which will likely fuel appeals such as those underway in southern Maine counties, where the first preliminary maps were released last year. Rockland is one example, where draft maps moved the flood zone about 100 feet inland.
As the process moves ahead, a Portland-based real estate developers group heard from experts Tuesday about options for appealing the flood levels indicated in those maps, which stand to affect development and property prices.
“Flood [insurance] is truly the elephant in the room,” said James Nadeau, a floodplain expert and real estate agent.
Nadeau said he’s urged real estate agents to pay closer attention to the issue earlier in the process of brokering sales because of the issue’s complexity.
While the results of flood map appeals will vary by municipality, there’s a reason individual property owners should pay attention to the process, too: a 2014 federal law allows property owners to hold on to lower premiums when they’re remapped into an area of higher flood risk.
Anyone taking out a federally backed mortgage on a property in a flood zone is required to buy flood insurance, which is primarily why changes in the program stand to affect the housing market.
In addition to pursuing appeals of the new flood zone maps, property owners also can make changes to reduce their flood risk before the new maps take effect, expected sometime in 2015, Nadeau said.
Nadeau leaned hard on that point, warning the group that there are two sides to the argument that FEMA maps might not align with the real risk of flood damage.
“Since the Industrial Revolution, we’ve really made a mess of the Earth,” Nadeau said. “We keep getting in Mother Nature’s way, and she continues to get more angry.”
Owners of affected properties will be notified after the maps take effect, but those newly in flood zones could pay higher rates than if they’d addressed the issue earlier.
Individual property owners will have chances to appeal, but Charles Katz-Leavy, a Portland lawyer, said they should first check to see if their home municipalities are contesting the broad methodology behind the maps.
There will likely be a wave of those types of appeals coming to FEMA as preliminary maps have been released. Last month, Boston filed an appeal of the maps, and the town of Kennebunkport also has prepared an appeal of the early maps, according to the Kennebunk Post.
Other towns across the state are considering the same move as well, but the process has been delayed because of an appeal from Plymouth County, Massachusetts, which is headed to an independent panel of engineers for review that Maine’s floodplain manager Sue Baker told the York County Coast Star in June could take up to five months.
That appeal could have implications for Maine because the mapping technique used to contest the maps there are the same used by consultant Bob Gerber in many other communities in Maine.
After that, property owners can contest the impact to their individual properties, which Nadeau said typically involves having a surveyor double-check and refine the property elevation measurements at the lowest point of the structure.
Revision of a 2012 law will give some flood insurance policyholders a break on rate increases written into law to help the heavily indebted federal flood insurance program recover.
Those changes dealt with policies that are subsidized because they cover structures built before the federal flood insurance program took effect in the late 1960s. There are about 2,500 such subsidized policies in Maine that could see annual increases until rates reflect the actual risk of flood zones.
And while residents can appeal flood maps, Nadeau said he doesn’t expect the gradual elimination of subsidized policies to go away.
“Those subsidies have to leave the program because they are very taxing,” Nadeau said.
Changes passed in 2014 have the steepest impact for businesses with subsidized flood insurance policies and people who have vacation homes with flood insurance. Both types of properties could see rates increase up to 25 percent per year until they reach rates reflecting the full cost of insurance in the relevant flood zone level.
Those changes back off the more sweeping changes made in 2012 that gradually moved all policyholders to the full-risk rate and called for rates to instantly reflect the full flood risk if a property was sold. The revised law allows subsidized and grandfathered rates to be transferred to new owners, which can increase gradually over a period of years to eliminate the subsidy.
Concerned property owners can review flood maps at their municipal offices or at FEMA’s mapping website at msc.fema.gov.