Two years after Hurricane Sandy, New Yorkers are still reeling from the storm’s destruction. Its damage was immense: 44 New York City residents lost their lives, 17% of the city was flooded, and nearly 90,000 buildings were damaged.¹

For most families, the immediate struggle was to return to their neighborhoods and restore their homes. That was hard enough, especially for low- and moderate-income New Yorkers with little savings or access to credit, and thousands of families continue to suffer from displacement to this day.² But now many families are facing a new crisis, which threatens their long-term affordability and their neighborhoods’ stability: the threat of rising flood insurance costs.

In recent years, the federal government has issued new flood maps for New York City that, if enacted as expected in 2016, will dramatically expand the number of people who must buy flood insurance. At the same time, recent federal legislative reforms to the National Flood Insurance Program (NFIP) will result in increased flood insurance rates for many New York City homeowners. While the Homeowner Flood Insurance Affordability Act of 2014 has slowed the rate at which prices will rise, serious concerns persist over the long-term financial impact of flood insurance rate increases. Homeowners in New York’s flood-prone areas are largely working and middle class; how can they be expected to shoulder these costs? Will this additional cost tip more homeowners into foreclosure? How many will be displaced from their homes and communities?

Governor Cuomo and Mayor de Blasio have both already shown a strong commitment to bridging the gap between smart climate policy and affordable housing. At the state level, the Governor’s Office of Storm Recovery has incorporated resiliency throughout its work, from infrastructure projects to housing recovery programs. Through the New York Rising Community Reconstruction Program, the State is enabling communities to develop locally appropriate solutions for the many unique resiliency challenges faced by New Yorkers living in the state’s many coastal neighborhoods.

For its part, the de Blasio administration created an Office of Recovery and Resiliency, tasked with addressing the issue of flood insurance affordability while planning for the city’s long-term resiliency. The administration’s affordable housing plan, Housing New York, includes coastal affordability as one of its key policy priorities and promises to find ways to elevate as many homes as possible and advocate for NFIP policies that will reduce flood insurance premiums for those who cannot elevate.³ This is an important step, and follow-through will be of the utmost importance. Without swift and strong action, the consequences will be dire.

This report looks at who lives in flood-prone communities, how those areas developed historically, and what mounting insurance costs could mean for New York City. By combining personal stories, collective histories, public data, and policy analysis, we hope to shine some light on those most vulnerable to rising tides and rising costs.

Click each name below to watch a short video introducing our featured New York City homeowners, and a few of the policymakers working to protect them.

A recent update to Chrome may affect video playback on Atavist projects. We suggest using another browser in order to view the videos below.

• Carla, homeowner, Brooklyn
• Lucia, homeowner, Brooklyn
• Tommy, homeowner, Staten Island
• Dianne, homeowner, Staten Island
• David, homeowner, Staten Island
• Larry, homeowner, Queens
• Connie, homeowner, Brooklyn
• Patti, homeowner, Staten Island
• New York City Council Member Mark Treyger
• Katherine Greig, Senior Policy Advisor, Mayor's Office of Recovery and Resiliency

Over 400,000 New Yorkers reside in the city’s high-risk floodplain, as defined by FEMA’s 2013 Preliminary Flood Insurance Rate Map (FIRM) — a number larger than the entire populations of New Orleans, Cleveland, or Tampa.⁴ Who makes up these communities, and how do they compare to the rest of the city?

Housing Characteristics

Despite pockets of wealth, New York’s flood-prone neighborhoods are largely working and middle class. They are some of the rare places in the city where middle class families have been able to afford to buy houses. Compared to the city as a whole, a disproportionately large number of flood zone residents live in owner-occupied 1-4 family homes.⁵

This is even truer today than before Hurricane Sandy, as the federal government’s new Flood Insurance Rate Maps will soon include even more middle class homeowners. In New York City, the number of people included within high-risk flood zones will rise 84% from 218,088 to 400,457.⁶

The proportion of renter-occupied homes will drop 11%, while the percentage of owner-occupied homes will rise by a third.⁷

The new high-risk floodplain is also more economically vulnerable than the old; a smaller proportion of homeowners in the high-risk zones will own their homes outright (i.e. without a mortgage), and the share of high-income homeowners will drop as well.⁸

Income Levels

The average combined income for homeowners in the 2013 Preliminary Flood Insurance Rate Map (expected to take effect in 2016) is $100,000, with more than a third making under $75,000.⁹ In large part, they are civil servants, educators, social workers, transit operators, police, and firefighters—the people who make New York City run. Flood-prone homeowners often earn significantly less than their counterparts elsewhere in the city. In both Coney Island and Astoria, for example, homeowners make about $50,000—28% less than the citywide average for homeowners. In parts of the Bronx, the difference is even starker; homeowners in Throggs Neck earn 35% less than homeowners citywide.¹⁰ While this area was not devastated by Hurricane Sandy, it sits just along the East River, and is therefore partially subject to new flood insurance requirements.¹¹

Demographics

The racial demographics of flood-prone areas largely match the city as a whole, with some deviations. According to the US Census, flood-prone New Yorkers are 55% white, 26% black, 10% Asian, and 10% “other.”¹² Education levels also track closely with citywide averages.¹³ One notable difference, though, is the elderly population. Residents of flood zones skew older than the city as a whole, with a greater proportion of people aged 70 and over than the city as a whole¹⁴ and a larger percentage of seniors living alone.¹⁵ Many of these seniors live on fixed incomes, and are not in a financial position to meet rising insurance costs. (See Appendix A.)

Foreclosures and Flooding

Hurricane Sandy came in the midst of an ongoing recession that hit many flood-prone areas with particular severity. Many of these neighborhoods had the precise profile of places that were targeted for subprime, adjustable rate, and private label securitized mortgages: a housing stock of relatively small (1-4 family) buildings; a history of redlining and diminished access to credit; and a population with low- and moderate-incomes. As a result of the national mortgage crisis, many homeowners are now facing foreclosure; even more are on the precipice, and at high risk of displacement. (See Appendix B.)

In the two years prior to Hurricane Sandy, 1,800 1-4 family homeowners in the storm surge area had started foreclosure proceedings.¹⁶ By 2013, 4,228 area households had “underwater mortgages,” meaning they owe more on their homes than they are worth.¹⁷ After the storm, most banks held a moratorium on mortgage payments for three months or more. That process, however, forestalled, rather than prevented, foreclosures in areas hit hard by Sandy. After the moratoria ended, many homeowners were told to pay huge lump sums of money they did not have — especially after putting a great deal of their own savings into home repairs, and, in many cases, missing work as a result of the storm.¹⁸

The Financial Impact of Sandy

First, there was the immediate, physical destruction. Then, for many homeowners, came an affordability crisis as recovery expenses mounted.

• Larry, homeowner, Queens
• Lucia, homeowner, Brooklyn
• Patti, homeowner, Staten Island
• Carla, homeowner, Brooklyn
• Dianne, homeowner, Staten Island

After Sandy, foreclosures spiked in almost every outer-borough flood-prone neighborhood.¹⁹ For those homeowners still holding on, the prospect of increasing insurance premiums threatens to send them over the edge.

Hurricane Sandy revealed a reality of life on our waterfront: while some wealthier enclaves were hit by the storm, most of Sandy’s victims were public housing residents and low- to moderate-income homeowners. Why had our most flood-prone areas become the site of so much relatively low cost housing?

There are hundreds of factors that influence who lives where in New York City. In the case of flood-prone homebuyers, some bought their houses because they wanted to be by the beach; others did not think of themselves as “coastal” at all, until Sandy’s storm-surge expanded the idea of what it meant to live within reach of the water—and therefore potentially in harm’s way.

One factor that drives nearly everyone’s decision regarding where to live is cost: people need a place they can afford. At the neighborhood level, the key determinant is the cost of land, which is a product of both geography and politics, and represents a long history of government actions.

Geography

Center and Periphery

Land values are lower in flood-prone areas for a number of reasons, but the simplest is real estate’s guiding principle: location, location, location. Most of these neighborhoods lie on the city’s edges, miles away from “core Manhattan.” Manhattan’s central business districts have long been prohibitively expensive, pushing the city’s workforce further and further outwards.²⁸ The outer-borough waterfront therefore acts as an economic outlet for the city, a peripheral place where land values can simmer while they soar in the core.²⁹

Barriers to Transit

In New York City, subway lines track closely with both density and land values — where there are no subways, land tends to be cheaper and less built-up. Though not impossible, coastal geology makes it significantly harder to build a subway by the water than further inland. Plans have long existed for waterfront subway expansions, from the 7 line extension now under construction to a planned-but-never-built Brooklyn-Staten Island connection, but much of the waterfront remains underserved by transit.³⁰ This is even more apparent today than in the past, when streetcars reached many parts of the city that the subways could not. In the 1930s and 1940s, however, these streetcar lines were eliminated.³¹ The resulting lack of transit has kept land values relatively low, and has encouraged the construction of small, inexpensive single family homes.

Politics

Geography accounts for some of the waterfront’s character, but politics has been a much more powerful force. One contradiction lies at the heart of this history: the City spent decades marginalizing the waterfront and its inhabitants. As a result, land values were low enough for many working and middle class people to buy homes nearby.

The Industrial Waterfront

For most of its existence, New York’s 520-mile waterfront was industrial, and was used for the production, warehousing, and distribution of goods.³² It was also — and often still is — the site of noxious facilities like waste water treatment and power plants. As a result, the atmosphere was more grimy than bucolic. As New York City historian Kenneth T. Jackson recounts, “Frankly, it was not a place where you necessarily wanted to have a picnic or a jump in the water.”³³

Highway Construction

After World War I, city planners lined the waterfront with highways, starting with the East River (now the FDR) and West Side highways in the 1920s and 1930s, and moving on to Brooklyn, Queens, and the Bronx in the 1950s.³⁴ These roadways were first proposed by the Regional Plan Association in their first master plan, which — in no small part to boost inland and suburban real estate values — imagined a set of highways, bridges, and tunnels to make the city quickly traversable by car.³⁵ Robert Moses enacted many of these plans and created over 400 miles of highway, much of it lining the city’s waterfronts.³⁶ While this raised land values in the city as a whole, it drove them down in coastal neighborhoods, which were suddenly beset by the noise, smog, and dangerous speeds of auto travel.

Redlining

Around the same time the City was building its highways, the federal government was setting out on a complex plan to stimulate homeownership. A key piece of this policy was the creation of the Federal Housing Administration (FHA) as a way to expand the availability of credit necessary to purchase a home beyond the reach of only the very wealthy. Not all neighborhoods, however, were eligible for FHA loans. An agency called the Home Owners Loan Corporation (HOLC) was formed to evaluate various neighborhoods and judge how safe they were for investment. The HOLC was notoriously racist and xenophobic, and, as a result, they graded neighborhoods with almost any immigrant or African American presence as unsafe.³⁷ Many of today’s flood-prone areas fell into this category, from Broad Chanel and Howard Beach to Coney Island and Sheepshead Bay. The HOLC downgraded Brooklyn’s Manhattan Beach, for example, because its surveyors found a “slow infiltration of somewhat poorer class Jewish” residents; they derided Lower Bath Beach for its “low grade Italian population;” no neighborhood with any African American population received a grade over B-.³⁸ As a result of this systematic practice, many neighborhoods were cut off from home loans and fell into disrepair, creating a cycle of disinvestment that destroyed countless urban quarters. Land and property values dropped precipitously.

Urban Renewal

In the post-World War II era, New York City began experimenting with “urban renewal” planning, which targeted working class areas (derided as “blighted” or “slum”) for demolition, then built up modernist high-rise projects in their stead. On the waterfront, Robert Moses — the man most commonly identified with urban renewal in New York — used the program to rid beachside neighborhoods of their working class culture. Defending his policies, he told the New York Times, “Such beaches as the Rockaways and those on Long Island and Coney Island lend themselves to summer exploitation, to honky-tonk catchpenny amusement resorts, shacks built without reference to health, sanitation, safety and decent living.”³⁹ Shoreline neighborhoods became urban renewal targets for three reasons: they were where poor people already lived; their land was easy to acquire; and, in a self-perpetuating cycle, they were near other projects.⁴⁰ So the City cleared neighborhoods and built high-rise housing, hospitals, mental health facilities, and nursing homes. While some of those developments constituted a public good, the surrounding land values dropped as a result of their presence.

Planned Shrinkage

Urban renewal was not only traumatic for the people it displaced and the neighborhoods it disrupted, it was also extremely expensive. In the 1970s, the federal government stopped funding urban renewal projects. Around the same time, New York City plunged into a fiscal crisis. In the immediate aftermath of that crisis, the City’s approach to its working class neighborhoods was crystallized in a phrase coined by Housing Commissioner Roger Starr: “planned shrinkage.”⁴¹ Under this approach, the City would focus its constrained resources on the central city and aim to retain the rich. The city’s poorer and more distant districts, including most of its waterfront, would see a decline in City services — fewer firehouses, less money for housing maintenance, dwindling hospitals, and broken street lights.⁴² The poor were encouraged to pick up and leave, and many did. In the meantime, vacancies rose, fires tore through neighborhoods, and waterfront land values continued to drop.

New Construction

A few years later, in the second half of the Ed Koch mayoralty, the City created new opportunities for homeownership. Partnering with community development corporations, public officials executed a plan to restore and build new subsidized housing on publicly owned vacant lots and tax-foreclosed properties. Much of this work took place in today’s flood-prone areas. In Coney Island, for example, the City and the Astella Development Corporation built about 1,000 single-family owner-occupied homes and sold them at subsidized rates to middle class families.⁴³ While the Koch plan is remembered mostly for its investments in the South Bronx, Harlem, and Central Brooklyn, it also created subsidized low density housing in the Rockaways, Jamaica, Sheepshead Bay, Throggs Neck, and Staten Island’s North Shore.⁴⁴

Gentrification

The Koch plan initiated a new era of residential development along the waterfront, geared over time towards increasingly high-income households. In 1993, the City underwent a comprehensive waterfront rezoning to encourage new high-rise construction. Neighborhoods like Long Island City and Williamsburg quickly transitioned from industrial waterfront to seaside enclave. In many New Yorkers’ imaginations, this became the reality of the urban waterfront — a place that remained unapproachable, no longer because of its industrial detritus, but rather its blinding glitz. It was where rich people lived, and where gentrification happened.

In some places, this was undoubtedly true. But in others, the waterfront remains a bastion of affordable homeownership, where communities live by choice and by chance amidst rising real estate pressures. The devastation of Hurricane Sandy revealed this reality, but it also imperiled it. The cost of staying put is rising every day, and the looming flood insurance premium hikes could threaten the future of low- and moderate-income homeownership in these parts of New York City.⁴⁵

With 520 miles of coastline, New York City is extremely vulnerable to both catastrophic flooding and escalating insurance rates.⁴⁶ How will flood prone communities be affected by the coming changes?

History of Flood Insurance

Origins

The National Flood Insurance Program (NFIP), the main source of flood insurance in the United States, grew out of a market failure: starting in the 1960s, insurance companies refused to provide homeowners with flood protection. The industry argued that flooding was a localized, high-cost phenomenon, in which a single disaster could wipe out an entire market. Congress created the NFIP in 1968 to provide affordable flood insurance for property owners while promoting floodplain management at the local level. The NFIP is administered by the Federal Emergency Management Agency (FEMA). To participate in the NFIP, communities must agree to adopt and enforce ordinances that meet or exceed FEMA requirements to reduce the risk of flooding. This includes the adoption of a Flood Insurance Rate Map (FIRM), which sets out zones of risk and elevation requirements for new construction.

In 1983, the NFIP was partially privatized and insurance companies took over the administration of flood insurance. Using federal guidelines, private insurers were tasked with determining premiums, selling policies, and servicing claimants. In return, they received an “expense allowance” equal to 30% of premiums. At the same time, FEMA released its first set of flood maps, which defined what areas were at risk and set the parameters for insurance rates and construction standards. Like many regions, New York City adopted its first FIRM that year. The system held together until Hurricane Katrina, which drove the NFIP $16 billion into debt. Since then, its debt has increased to $24 billion.

Recent Revisions

In 2012, prior to Sandy, the Biggert-Waters Flood Insurance Reform Act (Biggert-Waters) significantly restructured the NFIP with the goal of making it more financially sustainable. Biggert-Waters sought to increase rates substantially for new flood insurance policies, for commercial and vacation properties, and for homeowners whose properties were remapped into a higher risk zone. It also sought to phase out subsidized rates for properties, known as “pre-FIRM, ”  that were built before their community entered the NFIP and adopted a FIRM. Because these properties were built before the locality adopted NFIP floodplain management standards, they are often built at a lower elevation than would be required for new construction. The vast majority (about 80%) of the homes in New York City’s high-risk flood zones are pre-FIRM.

The rate increases imposed by Biggert-Waters would have severely impacted owners of older homes in flood-prone communities, with some homeowners seeing the possibility of their rates increasing from hundreds of dollars annually to several thousand over the course of a few years. Responding to the need for a more gradual approach, the Homeowner Flood Insurance Affordability Act of 2013 revised the law to slow its economic impact. Under the current legislation, premiums will still go up, with increases capped at 18% per year for owner-occupant policy holders. Homeowners buying new policies can start out at preferential rates, and phase up to the full price, with annual increases also capped at 18%.⁴⁷

While this slower rise is preferable to a sudden leap, it still means many low- and moderate-income homeowners are living on borrowed time; without significant reforms, they will not be able to stay in their homes and communities. The changes will be especially challenging for many seniors living on fixed incomes, for whom an 18% annual increase could be extraordinarily difficult to afford.

Rising Costs: The Impact on New Yorkers

New Yorkers will be hit particularly hard by the new flood insurance rules. New York City has more residents living in high-risk flood zones than any other city in the United States. New York City also has some of the oldest and most valuable buildings of any flood-prone city in the country, with $7 trillion of property insured — a trillion and a half more than the next highest state.⁴⁸ Unlike most other coastal communities, the vast majority of New York City’s waterfront homes were built long before the flood maps were established and the guidelines for construction were set. As mentioned, nearly 80% of homeowners were grandfathered in to the National Flood Insurance Program at rates that are now set to spike.⁴⁹

The City of New York is very concerned about the impact of these changes on housing affordability and commissioned RAND to do a study, which was published in October 2013. From that study, we know that today just 55% of 1-4 family homeowners in New York’s 100-year floodplain have flood insurance.

Average premiums range from $1,000 for newer, “post-FIRM” buildings to $1,800 for pre-1983 homes.⁵⁰ If the rates rise as planned, homeowners who are currently paying grandfathered rates will see their rates jump significantly over time, with increases of up to 18% per year. Few will be able to afford these leaps, with over 30% of homeowners in the floodplain earning less than 60% of the New York City Area Median Income, currently calculated at $85,900 for a family of four (see Appendix C).⁵¹ Just how high their rates will rise depends on obtaining an elevation certificate that compares the elevation of a home’s lowest living level to its Base Flood Elevation as indicated on the FIRM. For some households, the new rates could be as much as $10,000 more per year than they are currently paying.⁵²

Rising Tides: Climate Change & NYC’s Vulnerable Flood-Prone Communities

The 2013 Preliminary Flood Insurance Rate Map (expected to take effect in 2016) will more accurately depict the current risk of coastal flooding in New York City, and, as a result, will significantly expand NYC’s high-risk floodplain. The new maps, however, reflect only current risk levels and do not take future risk from climate change into account. The higher temperatures, increasingly severe weather conditions, and rising sea levels associated with climate change will drastically increase flood risk and permanently alter life in New York City’s coastal communities.

By 2050, New York City sea levels are expected to rise by a foot, making today’s “100 year storms” two or three more times as likely to occur.⁵⁴ Given this reality, more and more New Yorkers will face an increased flood risk and will be required to purchase flood insurance.

The Challenge of Elevation

In other parts of the country, homeowners have been able to minimize their flood risk by elevating their homes with relative ease. In New York City, however, almost 40% of buildings would be extremely challenging to lift.⁵⁵ Attached and semi-attached buildings cannot be boosted like single family structures, which typically have ample maneuvering room on all sides. Basements pose additional engineering problems, as do narrow lots.⁵⁶ With extensive and expensive remediation, some homeowners may be able to eliminate their finished basements and reduce their insurance premiums. Many of them, however, rely on their basements for additional space, and even as rental units to offset mortgage costs.⁵⁷ And while some New York City structures could be elevated, such as beachside bungalows and small single-family homes, the cost of doing so is prohibitively expensive for many of these homeowners.

Rising Costs and Rising Tides: Chain Reactions

Without action, the impact of rising flood insurance prices could ricochet through the city’s economy. First, rising costs will make a serious cut into homeowners’ budgets. For a household making a combined total of $75,000 per year, for example, a $5,000 insurance premium would comprise 6.6% of their total income. By comparison, an average homeowner pays just 1.7% of their annual income for insurance, maintenance, and repairs combined.⁵⁸ If premiums rise and wages continue to stagnate, that cut will become increasingly deep. New Yorkers today are still suffering from the results of the recession; from 2012 to 2013, real wages in the city rose just 1.2%, and they remain down 10% from 2007.⁵⁹

As costs swell, home values could drop. According to New York City’s insurance study, a $500 flood insurance increase could lead to a $10,000 decrease in home value.⁶⁰ As those costs keep rising and home values keep falling, many more homeowners will find themselves “underwater” (with a home that is worth less than the mortgage held against it) and teetering closer to foreclosure.

Many small businesses could also be displaced. While homeowners were granted some insurance relief in 2014, commercial buildings remain completely vulnerable to the 2012 cost increases.

Businesses that can afford the high insurance costs are likely to be national or international chains, leading to a decline in locally owned small businesses that are often long-time, much relied-upon fixtures of a neighborhood.

All in all, the rising flood insurance costs could lead to displacement, foreclosure, underwater mortgages, short sales, turnover, vacant homes, and declining tax revenue.⁶¹ If the problem of rising flood insurance premiums and the need for greater coastal resiliency is not addressed, the flood insurance program could spur a slow exodus of working and middle class people from large swaths of New York City.

Unfortunately, the challenges associated with climate change will further exacerbate the problems of coastal affordability and resiliency in the coming decades. Sea level rise and more frequent severe weather events will threaten not only the habitability, but also the economic diversity, of neighborhoods in New York City’s flood-prone neighborhoods — both because of the increasing cost of more frequent flood damage and the expanding number of community members required to purchase flood insurance.

Rising Flood Insurance Costs

If flood insurance rates continue to escalate, working and middle class homeowners will find themselves in a bind with few good options. Click on each name below to watch a short video about the potential impacts of these rising costs.

• David, homeowner, Staten Island
• Carla, homeowner, Brooklyn
• Lucia, homeowner, Brooklyn
• Carla, homeowner, Brooklyn
• Lucia, homeowner, Brooklyn
• Larry, homeowner, Queens

Confronting the stark challenges posed by rising costs and rising tides will require a concerted, long-term effort to arrive at solutions that protect communities in flood-prone areas. 

The first critical step is for FEMA to clearly communicate to residents in the floodplain why their rates are increasing, and will continue to increase, due to the phasing out of subsidies, as well as significant increases in Base Flood Elevation requirements (an average of over two feet citywide). FEMA should also communicate future flood risk so current and potential homeowners understand what may lie ahead. The more informed current and potential homeowners in the floodplain are, the better they can prepare and plan in order to protect both their personal safety and the safety of their most valuable asset, their home.

For homes that are able to be elevated, increasing affordable financing options for property elevation is one tool that will enable low- and moderate-income homeowners to raise their homes out of harm’s way. Not only is an elevated home safer and more resistant to damage from flooding, but, because of the reduced risk recognized by the NFIP, elevation will also result in lower flood insurance premiums. With low or no-interest financing in the form of loans or grants, homeowners would be able to afford home elevations that would otherwise be prohibitively costly.

However, in cases where elevation is impossible or impractical, as outlined in the City’s resiliency agenda, A Stronger, More Resilient New York, other mitigation options are necessary. Thanks to an amendment from New York Senator Kirsten Gillibrand, the Homeowner Flood Insurance Affordability Act of 2013 called on FEMA to develop alternative mitigation standards for homes in dense, urban areas that cannot be elevated. While FEMA is responsible for developing these new standards, ensuring that they are responsive to the needs of communities like Canarsie and Midland Beach requires advocacy efforts on the part of the City, the State, and other key stakeholders. 

Conducting additional research on affordability and mitigation efforts that confront New York City’s particular design challenges is also critical. The City is already off to a strong start, and has engaged prominent research institutes to study the issue of flood insurance affordability in New York City’s 1-4 family and multi-family housing stock. This will not only help to fully size the scope of the problem, but will also point to solutions. Likewise, the State’s NY Rising Community Reconstruction Plan program is engaging communities statewide in determining locally-appropriate, long-term resiliency investments to mitigate risk that will be funded with federal Community Development Block Grant resources.

While promoting long-term resiliency is essential, it is also necessary to reconsider the elimination of flood insurance subsidies from the National Flood Insurance Program. Recent federal legislation will gradually roll back existing subsidies for older homes, straining the budgets of low- and moderate-income homeowners and putting them at serious risk of displacement. To prevent this, as suggested in the City’s initial flood insurance study, a new round of smart, means-tested subsidies for low- and moderate-income homeowners’ flood insurance should replace the blanket subsidies currently being phased out.

Finally, for individuals, or even whole communities, that wish to relocate, targeted buy-outs at fair prices must be an option. Working together, the City and State are currently collaborating with certain high-flood-risk communities and individuals through the State’s NY Rising Buyout and Acquisition Programs and the joint City/State Acquisition for Redevelopment Program. Given the scale of the challenge, additional federal funding will be needed to fully meet the relocation needs that will continue to grow as sea levels rise.

Climate change is already reshaping New York City; even without another storm, sea level rise will undoubtedly impact the next generation of New Yorkers, who could see as much as six feet of increase by 2100. The city will have to reckon with dramatic changes and find new ways to keep our coastal neighborhoods safe, not only from the effects of nature, but so too, from changes in federal flood insurance policies. After decades of planning and public policy turned flood-prone land into affordable housing, rising flood insurance rates and the associated increased risk of flooding have the potential to permanently displace low- and moderate-income New Yorkers from these neighborhoods. Without a concerted intervention, rising insurance premiums could lead to a future where the city's coasts are affordable only to its wealthiest residents. This displacement would only worsen New York’s housing crisis and counteract the City’s extensive investments in affordable housing development and preservation.

While rising tides do not discriminate, their impacts on homeowners are not uniform. Those with less access to credit, savings, job replacement, or generational wealth will have a much harder time bouncing back and staying safely in their communities than those with greater resources and privilege.⁶² This was true of Sandy’s initial blow, but it is equally true today as New Yorkers confront the immense challenges of building a more resilient city. Without significant reforms, as well as investments in resiliency and flood mitigation, the rising tides caused by climate change, along with the rising costs of flood insurance, put the safety, housing affordability, and neighborhood stability of many of New York City’s neighborhoods in and around the coast at grave risk.

Disasters like Hurricane Sandy can often spark social change. They can either bring citizens together in progressive action or they can serve as an opportunity to re-make a place along inequitable lines, whether by choice or by inaction. In the wake of Hurricane Katrina, many Louisiana politicians leapt at the opportunity to refashion New Orleans with considerably less room for working and middle class residents who were already struggling to make ends meet before the storm. Just one week after the levees broke, Congressman Richard Baker told the Washington Post, “We finally cleaned up public housing. We couldn’t do it, but God did.”⁶³ A wave of storm- and policy-induced dislocation decimated New Orleans’ working and middle class population; the city became a wealthier place after Katrina less because of economic development than mass displacement.⁶⁴

New York City is fortunate to have leaders in government at all levels who understand the immensity of the challenges of rising tides and rising costs, not only in terms of the infrastructure that will need to be built to protect the city, but also in terms of setting equitable social policies that protect all of the city's people. While the city has some of the most daunting resiliency challenges of anywhere in the country or, indeed, the world, it also has the ability to leverage incredible resources and become a model for how to build resiliently. The steps that New York's political leaders at the city, state, and federal levels have already taken are encouraging and confirm that the fates that have befallen other cities following major disasters need not be the case in New York.

The proposals recommended in this report constitute only a small portion of the actions required to confront the challenges of rising tides and rising costs. Ultimately, protecting New York City’s flood-prone neighborhoods, while promoting sustainability, will require significant efforts and investment on the part of local, state, and national government, along with impacted communities and other key stakeholders. While the challenges are substantial, meeting them is the only option, in order to protect both our city and the hundreds of thousands of families who call New York’s coastal neighborhoods home.

Find sources and data appendices in the print version of Rising Tides, Rising Costs. Visit cnycn.org/risingtides to keep exploring this issue.

The Center for NYC Neighborhoods was created in 2008 in response to the foreclosure crisis through the collaborative efforts of the mayor, the New York City Council, community advocates, foundations, and corporate leaders. Our mission is to promote and protect affordable and sustainable homeownership in New York City. As the central hub of a diverse network of housing counseling and legal services organizations, we leverage private and public resources to ensure that homeowners citywide have access to high quality foreclosure prevention services. Since our founding, we have assisted over 30,000 homeowners in New York City.

Sandy Recovery

The Center’s unique model and strong relationships with community groups allowed us to respond quickly and focus on both the short- and long-term needs of homeowners following Hurricane Sandy. Working with our Network Partners, we have assisted nearly 4,000 homeowners recovering from Sandy.

Meeting Emergency Needs

• Our Neighborhood Recovery Fund, set up in the immediate aftermath of Sandy, provided emergency grants and loans to over 275 New York City families, delivering a total of $1.35 million in funding.
• A majority of Neighborhood Recovery Fund recipients have household incomes below 80% AMI or about $68,000 per year for a family of four.

Assisting Vulnerable Homeowners

• The Center raised over $2 million in funding to fund 19 non-profits and coordinate the work of another 8 organizations in order to support a total of 27 community-based organizations responding to Hurricane Sandy across the city. This funding has delivered legal services and housing counseling assistance to nearly 4,000 homeowners to date.

Fostering Long-Term Resiliency

• Recognizing increasing flood insurance premiums as an emerging long-term challenge for low- and moderate-income homeowners, the Center created the consumer information website FloodHelpNY.org, which provides individualized, accessible information for homeowners about New York City’s new flood maps and changes to the National Flood Insurance Program.
  
• We organize and lead borough-based collaborations among community-based organizations helping communities recover from Sandy. We provide additional trainings and individualized technical assistance as needed.
  
• We continue to advocate for resources and policies that will foster resiliency in New York City’s flood-prone neighborhoods in order to preserve a vital source of low- and moderate-income housing, keep our neighbors safe, and reduce the risk of damage from future extreme weather events and climate change.
  

The Center for NYC Neighborhoods would like to thank the following individuals for their invaluable assistance in creating this report:

Lucia Acevedo

Cindy Ayala

Bridget Broadway

Connie Ann Cammilleri

Sean Capperis, NYU Furman Center

Carla Jones Clark

Thomas Cunsolo, Founder, Staten Island Alliance

Rebecca Elliott, University of California, Berkeley

David Gaul, Zone A New York

Carrie Grassi, NYC Mayor’s Office of Recovery and Resiliency

Katherine Greig, NYC Mayor’s Office of Recovery and Resiliency

Dianne Hague

Zoé Hamstead, Milano School of International Affairs, Management & Urban Policy

Joseph Herrnkind

Alexis Iwanisziw, New Economy Project

Susan M. LaRocca

Erika Lindsey, NYC Mayor’s Office of Recovery and Resiliency

Joseph Pupello, Zone A New York

Lawrence Scheiber

Arden Sokolow, New York Governor’s Office of Storm Recovery

Mark Treyger, New York City Council Member, District 47

David Troise

Max Weselcouch, NYU Furman Center

Josh Zinner, New Economy Project

We would also like to thank our funders for their generous support of our work on flood insurance education and outreach over the past year:

The Center for NYC Neighborhoods is solely responsible for the accuracy of the statements and interpretations contained within this publication. Such interpretations do not necessarily reflect the views of the Center's funders.

Report Production Credits

Authors
Samuel Stein & Caroline Nagy

Editor
Matthew Hassett

Designer
Leylâ Moore

Research Associate
Joyce Kwon

Photographer
Abe Halpert

Maps
Chris Cardinal

Intern
Lauren Suiter