Will flood insurance rates cause people to raise their houses? - WFLA News Channel 8

Will flood insurance rates cause people to raise their houses?

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ST. PETERSBURG, FL (WFLA) -

Tee Grizzard's house on Connecticut Ave. in St. Petersburg has been a labor of love, of sorts. There have been times where he's had to fight hard to keep it in his name through the housing crisis and the recession that followed.

"I struggled for four years to pay that note as a rental because my wife and I moved away temporarily," he remembers about paying two mortgages.

To pour salt into the wound, he had just remodeled it six months before the market took a plunge. He's upside-down on it. But the 1961 home that sits 4.8 feet above mean sea level in Shore Acres is still his.

"We live here. This is our community," Grizzard said. "This is my home and I want to save it."

The question is now, though, if he'll be able to. Grizzard received his flood insurance bill for next year and it totals to about $8,000. That's nearly $700 a month more out of his pocket ... just to insure his home.

"It's almost like having two mortgages - to pay for insurance," he said. "The unintended consequences of this thing are going to be so far reaching and so devastating - not only to the resident who it impacts directly but if you think about all the restaurateurs, the car dealerships - all the other discretionary funds that my family and I spend in the economy, have to go to flood insurance .”

The increases are happening because of the new Biggert-Waters Insurance Reform Act. It took effect in early October and ends flood insurance subsidies on hundreds of thousands of older houses. The changes are supposed to strengthen the finances of the federal flood insurance program, which has been struggling with about $30 billion in debt after storms like Hurricane Katrina and Sandy, according to CNN.

Insurance agent Jake Holehouse of Holehouse Insurance in St. Petersburg is taking phone call after phone call because of it. More than 30,000 homeowners in Pinellas are impacted. Add in commercial businesses and condos and that total goes up to about 50,000 policies, the highest number in the country.

"We hear about it every day as to 'what can I do long-term to help reduce my flood insurance rate?'" Holehouse said. "The answer is knock down or lift your house. Most people don't want to knock their house down and lifting could be a great alternative to help bring in sustainable solutions to this flood insurance crisis that's going on."

It doesn't come cheap. Holehouse said some estimates show lifting an average 2,000 square foot masonry house - slab on grade - would cost someone about $50,000.

"$50,000 is still a lot of money for a lot of people and what we would like to see is the state of Florida come in - not so much start their own flood insurance program - but create flood insurance solutions such as house-lifting grants that are paid back over a 20 to 25 year period of time," he said. "In the amount somebody would be paying annually to pay that grant back - they would be saving more than that on their flood insurance and that's what's going to create long-term solvency to this Florida flood insurance issue."

But Holehouse says one of the problems they're seeing is the changes are 'so much, so fast' people don't have enough time to find (or afford) alternative solutions. He's hoping the federal government will delay the rate hikes.

Related story: Bay Area residents protest flood insurance rate hikes

"The worst thing that could happen from this flood insurance crisis is people being forced out of their house because they can't sell it," he said. "They can't do anything except for let it foreclose."

That is Grizzard's fear for the neighborhood he's called home since 1998.

"I'm stuck here. There's really nowhere for me to go," he said. "I can't sell this house now. What this act has virtually done is made every property in the low-lying areas of St. Petersburg - and Florida as a matter of fact - virtually worthless."

He fears the alternatives like lifting his house just won't work.

"I mean, it’s a 1961 block home slab-on-grade, it's not practical," he said. "Most people, if you look around this neighborhood -, they're not the high-income homes. They're 2-1's and 3-1's in the $100,000 to $150,000. You can't afford to raise the house."

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