Floodplain Management: Housing DevelopmentsJune 7, 2007Land Use and Environmental Committee Legislative CommitteeThe following is for study only and has NOT been approved by the Land Use and Environmental,Legislative or Executive Committees, or the Board of Directors.Issue: What position should C.A.R. take on Senate Bill 5 (Machado), a legislative proposal that, amongst other things, would codifying the existing practice of requiring minimum flood protection for new housing construction and increase the minimum requirement for flood protection.Action: Policy direction required at this timeOptions: 1. “Support” Senate Bill 5 (Machado) 2. “Oppose”Senate Bill 5 (Machado) 3. “Amend” Senate Bill 5 (Machado) 4. OtherStatus/Summary: Since Hurricane Katrina, there has been an increased sense of urgency in describing the magnitude of flood risk facing California. There is an emerging consensus that California suffers from inadequate flood management both in its infrastructure capacity and its planning and development rules. C.A.R. has previously become involved in opposing building moratoria and proposals that will prejudice housing supply. C.A.R. has typically not imposed planning or disclosure requirements that do not unduly burden homeowners or agents. This legislation presents two issues on which C.A.R. does not have clear policy: 1. Should the existing regulatory rules regarding the process for obtaining NFIP flood insurance, including the planning process for “100 year flood” protection, be codified? 2. Should the standard of flood protection used in approving new development and new infrastructure be increased to a higher level? If so, to what standard – 200 years? 500 years? Background: 100-year Protection: Many of the levees were originally designed to provide limited flood protection specifically for agricultural areas, but are now being used to protect urban development. Most major levees protecting urban areas were constructed or improved to meet the US Army Corps of Engineers (USACE) urban protection standard of 100-year flood protection, which is defined as a flood magnitude that has a 1% chance of occurring in any given year, or a 26% chance during a typical homeowner’s 30-year mortgage. There is a common misconception that areas protected by levees are outside thefloodplain, but they are not; they are in the floodplain and still subject to the risk of flooding. Recent re-evaluations of levee integrity in communities throughout the Central Valley are finding that many levees are providing less than the expected 100-year level of protection.NFIP Flood Insurance Local Ordinance Requirements: Currently, federally sponsored or guaranteed home loans require that homeowners carry flood insurance policies for homes located in floodplains that do not have a minimum of 100-year flood protection. The largest issuer of flood insurance is the National Flood Insurance Program (NFIP) administered through the Federal Emergency Management Agency (FEMA). In order for homeowners to qualify for NFIP coverage, theirlocal government is required to adopt and enforce minimum floodplain management standards that provide flood loss reduction building standards for new and existing development. This minimum of 100-year flood protection, is achieved by local communities adopting ordinances which require the protection be achieved through either structural improvements (e.g. levee improvements) or building standards (e.g. raised foundation construction), or a combination thereof. While most communities in California have uniformly adopted and implemented the federal floodplain standard, the aging flood protection infrastructure is increasingly being called into question of whether communities are actually afforded the flood protection they think they have. Areas outside of the 100-year flood zone, where the insurance is not mandated, are still subject to flooding and according to the Floodplain Management Association, roughly 40% of flood insurance claims are from these areas.Discussion: SB 5 (Machado) declares that flood protection in the Sacramento and San Joaquin Rivers drainage areas is a matter of statewide concern. The bill proposes the development of a comprehensive integrated flood policy and flood management program for the Central Valley that addresses all aspects of flood management, clarifying the roles and responsibilities of the state, local flood management agencies, cities and counties, developers, and property owners as part of an integrated flood policy.The bill calls for the identification of each parcel of real property that is in a flood hazard area and that the owners are mailed a notice stating whether the parcel is protected by the facilities of the State Plan of Flood Control for the Central Valley or other flood management facilities, the degree of flood protection if known, how the owner can obtain more information about flood protection, how the owner can obtain flood insurance, and the consequences of failing to have flood insurance in the event of a flood. This notice is separate from the NHD (natural hazard disclosure) statement in Civil Code 1103. The bill also requires that local land use planning exclude lands where the flood management infrastructure designed to protect that land is not adequate to avoid the risk of flooding such that the development of housing on that land would be infeasible because of the cost of achieving the necessary level of flood protection or other considerations. The bill also clarifies that the prescribed land use planning cannot be used as a basis for reducing the total housing need established by regional housing needs allocation plans.Most importantly, SB 5 (Machado) proposes to not only codify the existing local practice of adopting ordinances requiring the minimum 100-year flood protection standard for new construction, but would also increase that minimum level of protection standard to a yet undetermined level.Supporting Arguments The risk of catastrophic flooding is one that millions of Californians livewith constantly. The areas around the Sacramento and San Joaquin Rivers are especially at risk of a devastating flood event, a disaster that would be crippling to both those immediately affected by widespread flood damage and the State's economy.While the current federal standard is 100-year flood protection, consideration is being given by the proponents of SB 5 (Machado) to increase the minimum level of flood protection in the Central Valley to 200-year or 500-year levels. Supporters cite that 200-year flood protection, which has 0.5% chance of occurring in any given year and equates to a 13% chance of flooding during a typical 30-year mortgage, decreases risk to homeowners and communities.Proponents also argue in favor of the proposed planning rules stating that risk is best minimized when natural hazards are considered in the scope of regional land use planning decisions, including expanding the use of flood easements and other measures to improve regional flood protection.Opposing Arguments Development interests are the primary opponents of the bill. They argue that land use planning should be controlled by local government and not determined by a state agency. Furthermore, the proposed increases in minimum flood protection requirements will prove difficult, if not too costly, to achieve and will therefore restrict the ability to develop housing in the Central Valley.With communities currently struggling to meet the minimum requirement of 100-year flood protection, opponents further contend that the increased flood protection standards and expanded use of easements will eliminate the potential for developing vast swaths of land, thereby creating a building moratorium. If they cannot meet a 100-year standard now, they argue that a higher standard is seen as the death of new development in the Central Valley.Conclusion: - Should C.A.R. take a position on SB 5 (Machado)? - Can C.A.R. concerns, if any, with SB 5 be resolved by amendment? If so, what changes are appropriate?