Federal Flood Risk Management Standard

On April 23rd, HUD published a Final Rule in the Federal Register to better protect communities and taxpayer-funded investments from flooding. This Rule amends HUD’s existing floodplain regulations to require a greater level of flood protection for new construction and substantial rehabilitation projects. Building to this standard will increase the Nation’s resilience to flooding, reduce the risk of flood loss to human life and property, and minimize the direct impact of floods on households across the country.

Background

Flooding poses a significant risk to people’s homes, federal investments, and most importantly people’s lives. It can affect all areas within the United States; from 1996-2019, 99 percent of U.S. counties were impacted by a flooding event. Flooding is also costly. Since 2017 there have been more than eight flooding events that have resulted in over one billion dollars in damages. According to NOAA, sea level along the contiguous U.S. coastline is expected to rise, on average, 10 to 12 inches over the next 30 years. Riverine flooding will also increase during the same period of time. This increased flood risk is also costly. The Congressional Budget Office (CBO) in 2023 estimated that the expected annual flood damages in 2020 to homes with federally backed mortgages was $9.4B. CBO estimates that those annual damages will increase a third to $12.8B in 2050. In addition, the total expected flood damage over a 30-year period to homes with federally backed mortgages rises from $190B in 2020 to $258B by 2050. The estimated loss potential from just a 1-inch flood ranges from $10,000 to $27,000 at the individual homeowner/renter level depending upon the size of the home.

Flooding events are more costly and harder to recover from for low-income populations and underserved communities. These individuals and their communities face greater barriers in accessing recovery assistance when facing flood damage. While flooding and severe storms impact all communities, it is more difficult for these socially vulnerable populations to recover from flooding impacts. Communities of color are also at greater risk: research from real estate company Redfin found that formerly redlined neighborhoods face a 25% greater risk of flooding than non-redlined neighborhoods. The Fifth National Climate Assessment found that the average annual losses due to floods in census tracts with a Black population of at least 20% are projected to increase at roughly twice the rate of losses in tracts where Black populations make up less than 1% of the population.

Following the extreme flooding of Hurricane Sandy and similar events, Executive Order (E.O.) 13690, was signed in January 2015. This E.O. established for the first time a flood risk reduction standard for federally funded projects, through a new standard, the Federal Flood Risk Management Standard (FFRMS). The FFRMS was established to encourage federal agencies to consider and manage current and future flood risks in order to build a more resilient nation. The E.O. amends and builds upon E.O. 11988 Floodplain Management which was signed in 1977 and has served as a key driver for HUD’s floodplain requirements since then.

Under E.O. 13690 and E.O. 14030, which was subsequently signed furthering these requirements, federal agencies must review and update, as needed, their policies, regulations, and procedures to account for the FFRMS. Accordingly, HUD has published a final rule revising its floodplain management regulations in 24 CFR Part 55 to ensure they are consistent with E.O.s 13690 and 14030 implement the FFRMS.

The Final Rule

This rule expands the floodplain of concern from the 100-year floodplain to a newly defined “FFRMS floodplain.” The FFRMS floodplain is an expanded area both horizontally and vertically from the 100-year floodplain that is based on future flood risk. The rule requires that newly constructed or substantially improved structures within this newly defined floodplain be elevated or floodproofed to this higher FFRMS floodplain elevation for protection.

Specifically, this rule establishes a preference for (but does not yet require) use of a Climate Informed Science Approach (CISA) to determine the floodplain of concern for HUD-funded projects, when possible. The floodplain identified using CISA provides the elevation and flood hazard area that results from using a climate-informed science approach based on best-available, actionable hydrologic and hydraulic data. CISA maps can provide more accurate and forward-looking information than existing Flood Insurance Rate Maps (FIRMs), many of which have not been updated in years or decades. When CISA maps are not available for a particular HUD-funded project, the rule provides multiple alternate approaches to identify the FFRMS floodplain. This means with or without available CISA mapping, there will be a predictable, practicable option for compliance with the rule that still promotes resilience.

Additionally, projects within the FFRMS floodplain are required to complete the 8-Step Process unless excepted under 24 CFR 55.12 or 55.13 or permitted to complete an abbreviated 5-step process under 24 CFR 55.14. The 8-Step Process is used to ensure HUD and responsible entities consider how their actions affect floodplains and/or wetlands. The rule also allows for public notices required for environmental reviews to be published online on appropriate government websites.

In addition, this final rule updates HUD’s Minimum Property Standards for one- to four-unit family housing under the FHA mortgage insurance program (which are not subject to Part 55) and low-rent public housing programs to require that the lowest floor in newly constructed structures be built at least two feet above the 100-year floodplain. The rule does not, however, require consideration of the horizontally expanded FFRMS floodplain under the Minimum Property Standards.

This rule does not change the current requirements and guidance specifying which actions subject to Part 55 require elevation or floodproofing. Rather, this rule expands the areas in which these already well-established requirements apply and updates instructions on completing the 8-Step Process to foster better analysis and improve overall climate resilience in HUD-assisted projects.

Revisions to HUD's Proposed FFRMS Rule in the Final Rule

HUD posted a proposed rule for public comment on March 24, 2023. The public comment period for the proposed rule ended on June 6, 2023.  All comments have been incorporated or responded to in the preamble of the final rule.

The final FFRMS rule includes the following revisions to the proposed rule based on public and interagency comments received:

Climate Informed Science Approach (CISA)

HUD revised the rule to indicate that the Department’s adoption and intent to require use of any federal tool to implement CISA will include an additional, subsequent publication of a Federal Register notice explaining the intent to do so and soliciting public comment.  Grantees can, however, use a federal tool on a voluntary basis prior to publication of the FR notice. The rule was also revised to more clearly allow local CISA tools and resources on a voluntary basis, if local data is available, actionable, and meets certain criteria as defined in the rule.

Substantial Improvement Elevation Requirements

HUD removed the substantial improvement trigger for elevation from Part 200 to alleviate concerns that the low-funding threshold could frequently trigger “substantial improvement” in particular communities. HUD wanted to avoid limiting homeowner eligibility for rehabilitation mortgage insurance programs to address necessary improvements such as roof repair in areas with lower home values. Part 200 continues to require a two-foot elevation for those newly constructed homes within the 100-year floodplain as was proposed in the draft rule. The FFRMS elevation requirements continue to apply to substantial improvement and new construction under all HUD programs subject to Part 55.

Manufactured Housing Elevation

HUD revised the Part 55 section of the rule to include manufactured housing in the definitions of substantial improvement and new construction to explicitly identify new siting of manufactured housing units as subject to elevation requirements when Part 55 compliance is required. Note: The Part 200 section of the rule does not apply to manufactured housing except to implement installation requirements at 24 CFR part 3285.

On Site Floodways

HUD revised the rule to expand the incidental floodway provision to allow rehabilitation of existing structures located in the floodplain when there is also a floodway on the property/parcel. This revised provision expands eligible activities to include rehabilitation within the footprint of an existing structure but maintains the longstanding requirement of obtaining a permanent covenant to preserve all floodplain areas from future development and new construction on the parcel.

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Content current as of April 23, 2024.