DEVELOPING STORM Dec

DEVELOPING STORM Dec. 10, 2017

WEEK IN REVIEW BUSINESS SPORTS More than Jerusalemplan Invasive Boomgoes sparks pprotests speciesatsea theHeisman PAGESA20-21 $265 Shippersbattle Oklahoma’s Baker in coupon savings Presentedby stowaway Mayﬁeldtakes home tophonor. insidetoday’s organisms. newspaper PAGE B1 PAGE C7

Sunday, December 10,2017 |HoustonChronicle.com and Chron.com |Vol. 117, No.58|$4.00 xx Sunny: High 63,Low 39

DEVELOPING STORM Trump The NationalFlood Insurance Program is $20 billion in debt pushes and encourages building in vulnerable areas. Efforts to fix it have been stymiedbycoastal lawmakers and specialinterests. pipeline projects Ofcialsconsider overrulingstates to quicken process By JamesOsborne

WA SHINGTON —Af- ter years of pipelineproj- ects getting helduporde- railed by environmental concerns, the Trumpad- ministration is examining ways to getaround state roadblocks thathavemade it increasingly difcult to build in certain parts of the United States. In late October,the Federal Energy Regula- tory Commission startled manystate ofcials when it granted aconstruc- tion permitfor anatural gas pipeline in New Yo rk, despite stateregulators Jon Shapley /Houston Chronicle turning down the devel- Henry Thompson and his wife, Kate,knewthe Cypress Creekareaflooded but were reassured by cheapflood insurance. oper overconcerns the project would increase greenhouse gas emissions thatcontribute to climate change. TheTrump ad- ministration, meanwhile, Build, flood, rebuild: has for months discussed the possibility of using federal authoritytospeed in- flood insurance’s expensive cycle frastructure development, apotential political third rail for Republicans who By David Hunn, Attempts to fix flood insur- ple,aproposal to stop the fed- plains, including thousands have long proclaimed the Ryan Maye Handy ance have been derailedre- eral governmentfrominsur- of homes in the Houston area Pipeline continuesonA12 and James Osborne peatedlybyspecial interests, ing homes built in flood plains that flooded during Hurricane political expediency and pow- beginning in 2021 wasscuttled Harvey. TheNational Flood Insur- erful lobbies thathavepoured by coastal lawmakers and the It wasdesigned to insure ance Program, designed to hundreds of millions of dollars National Association of Home properties vulnerabletoflood- protectAmericans from cata- into congressional campaigns, Builders, whichspent$39 mil- ing,but onlyhalf of such prop- Presidency strophic floods, has failed in athree-month examination lion lobbying Congress since erties carryflood insurance as almostevery way, encourag- by theHouston Chronicle re- 2005. required by law. still‘awork ing people to buy and build veals. Banks, builders, insur- TheimpactofCongress’ It wasintended to reduce in flood-prone areas while ers and realestateagents— failure is undisputed.The the costs of disaster relief,but increasing the costand magni- supportedbyproperty owners National Flood Insurance those costs have exploded. inprogress’ tudeofdisasters. andalliesinCongress —have Program wassupposed to dis- It wassupposed to be self- Congress’ eforts to reform combined to thwart even the courage developmentinflood- supporting,but premiums Ayearin, Trump the program have failed justas mostpractical changes. prone areas, but new develop- don’t come close to covering thoroughly. Earlier this year,for exam- menthas spreadacross flood Storm continuesonA18 continuesto wrestlewithofce Hurricane Harvey dumpedanunprecedented amount of rain on Houston, but the resulting damage wasmultipliedby decisions made —and not made —during the past 50 years. During the nexttwo weeks, aHouston Chronicle investigation By Maggie Haberman, will explainwhy the August stormwas bothanatural and man-made disaster. Glenn Thrush and PeterBaker PART 1 TODAY PART 3 PART 4 PART 5 PART 6 PART 7 NEWYORK TIMES Natureruled, Cheap premiums, Buildina Fort Bend levees HowHouston’s Developments They tamed man reacted. billions in floodway? were designed growth weak- around theNorth Sea. WA SHINGTON — Harvey was debt. Families It’sthe forthe 100- enedthe dams Barker: risky What canthe Around 5:30 each morning, Houston’s gettrapped, Houston year storm. Is it thatmadeit reservoir Dutchdofor President DonaldTrump reckoning. taxpayers soaked. way. enough? possible. business. Houston? wakesandturnsonthetele- vision in the WhiteHouse’s ›› Seeinteractive graphicsand catchuponthe series at houstonchronicle.com/developingstorm master bedroom. He flips to CNN for news,movesto “Fox &Friends” for com- fort and messaging ideas, and sometimes watches With 3Garcias on ballot, Latinos hope for breakthrough MSNBC’s “Morning Joe” because,friends suspect, it Houston couldsee thatlastname already have electingaHispanic to Con- fires him up for the day. qualifiedtobeonthe ballot gress. Energized, infuriated itsfirstHispanic on March6to replace U.S. “You’retalking to the real —oftenagumbo of both — Congress member Rep. GeneGreen, whohas Garcia,” stateSen. Sylvia Trumpgrabs his iPhone. announced he willretirenext Garcia said with alaugh. Sometimes he tweets while By Jeremy Wallace year.AfourthGarciakicked Attorney Roel Garcia said propped on his pillow, ac- around theideabefore ulti- he alreadyisplaying with a cording to aides. Other There is apretty good matelydeciding nottorun. slogan to distinguishhimself. times he tweets from the chance thatthe next member And while they’ll make “Maybe it’s time for adif- Three Garcias —Dominique,Roeland dennext door,watching of Congress from eastHous- foraninteresting ballot,the ferent Garcia,” he said. Sylvia —are runninginthe Democratic another TV. Less frequent- ton will be aGarcia. names also show that the Real estate agentDomi- primary to succeed Rep. Gene Green in the ly,hemakes his wayupthe Three candidates with district is closer thaneverto Houston continuesonA15 29thCongressional District. PresidentcontinuesonA14

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Storm from page A18 subcommittee, started circu- based on future claims, not those lating drafts of legislation that filed previously. On Nov. 14, the houses, fearing that homeown- would phase out grandfathered House passed what was left of ers would default on mortgages rates, sharply raise premiums on Dufy’s bill. if flood insurance became too ex- properties that flood repeatedly The legislation, still awaiting pensive. and prohibit the federal govern- Senate action, would gradually The National Association of ment from insuring homes built raise premiums on the riskiest Realtors, whose members earn in flood plains starting in 2021. properties while encouraging commissions selling waterfront The National Association of insurance companies to write properties, fought to maintain Realtors immediately sought private flood insurance policies. below-market premiums on va- meetings with Dufy, fearing that Hensarling, who announced cation homes. The Realtors gave allowing grandfathered rates to his retirement in October, said $3.8 million to congressional rise would deflate prices of wa- campaign contributions did not campaigns in 2003-04, includ- terfront properties and unravel afect his moves. But he acknowl- ing $11,000 to Blumenauer and deals. “We didn’t want a repeat of edged the influence lobbyists had $11,000 to Rep. Robert Ney, the Biggert-Waters,” said Ken Wing- on other lawmakers. Ohio Republican who chaired ert, a lobbyist with the Realtors “It’s discouraging from time the subcommittee reviewing the group. to time to have members of Con- bill, according to data compiled The Realtors spent some gress essentially say, ‘I’m not by the Center for Responsive $64 million lobbying Congress interested in the policy. Tell me Politics, a nonprofit that tracks last year — more than five times what outside group is for and money in politics. what Exxon Mobil spent. Real what outside group is against Lawmakers representing estate interests also contributed it,’” he said. Jon Shapley /Houston Chronicle states with large swaths of land more than $143,000 to Dufy’s Henry Thompson watches his son Harrison, 4, playwithabox of packing Todd Middletonshows his frustration while talkingaboutdamage to his vulnerable to flooding, particu- campaign committee in 2017 Still a bargain peanutsinasecond-floor bedroom of thefamily’sflood-damagedhome. Norchesterhome near Cypress Creekafter thefamily’ssecondflood. larly Texas, Louisiana and Flor- alone. When Hurricane Harvey ida, fought to redefine “repetitive Dufy said he remembered the reached Houston in August, it loss” as four claims, greatly re- outcry from homeowners that dumped 51 inches of rain, flood- ducing the number of homeown- killed Biggert-Waters and wanting an estimated 150,000 struc- ‘It’slikehittingyourhand with ahammer overand overagain’ ers afected, Bereuter recalled. ed to preserve other parts of the tures across the region, and kill- They also sought to cap premium Jon Shapley / Houston Chronicle legislation that would increase ing more than 80. increases. Kate Thompson sits at the bottom of the stairs, upset because a money flowing into the flood in- In the months following, Storm from page A1 one-third of the nearly $1,400 a has fivetimes the population. In developmentoflandwhichisex- some $39 billion in claims during Rep. Richard Baker of Loui- contractor had told her repairs would stretch into February. surance program. Harris County crews picked year thatthe nonpartisan Con- astate with so much low-lying posed to flood damage.”But com- this decade,nearly seventimes siana, a former real estate agent “We decided we wanted to up 26,000 truckloads of debris the expenses, requiring repeated gressional Budget Ofce esti- land,somuchdevelopmentin munities didn’t want to lose the the $6 billion,adjusted for infla- and fourth-ranking Republican raise revenue,” said Dufy, who ripped from people’s flooded bailouts by taxpayers. mates is needed to coverclaims these areas, and powerful real es- tax money and economic activity tion,paid in the 1980s, according on the House Financial Services through after flood insurance Scalise and Grimm found a ve- denied campaign contributions homes and dumped on their “Without those billionsofdol- for flood damage here. tate interests, no Louisiana poli- thatcomes with construction, to federal data. Committee, had the bill recast as premiums rose by an estimated hicle to bring their legislation changed his position, “but we lawns. The federal government lars in subsidies, youcouldn’t Since2001, according to fed- tician supporting increased flood andcongressionalrepresenta- Congress has repeatedly tried a short-term program that ex- hundreds, if not thousands, of to the House floor, where it was wanted to do it gently.” has spent more than $1 billion have waterfrontdevelopment eralflood insurance data, the insurance premiums would ever tivessoonstarted pressuring tofixthe program, but three bills pired five years later. Rep. Billy dollars. approved overwhelmingly in The fight, however, was just in housing assistance to fami- the wayitistoday,”said Craig number of homes in the region’s getelected,membersofCongress flood insuranceadministrators filed over thepast15years show Tauzin, chairman of the power- Banks, builders, insurance March 2014. The Senate followed beginning. Jerry Howard, CEO lies driven from their homes and Poulton, CEO of Poulton Associ- flood plains has increased by an and their aides said. to lowerpremiums, changeflood whyreformeforts have failed ful Energy and Commerce Com- companies and Realtors are ma- less than two weeks later, en- of the National Association of expects the flood insurance pro- ates, one of the country’slargest estimated 26,000.People have All this has trapped federal plain maps and let states make even as the costs of flooding di- mittee, persuaded House leaders jor donors to political campaigns, acting a repeal that overturned Home Builders, who has spent gram will eventually pay $11 bil- administrators of private flood bought,built and rebuilt in ar- lawmakers in their ownvicious developmentdecisions, said Bob sasters have grown, from more to allow homeowners who de- particularly Republicans, who most rate increases and even re- more than two decades lobby- lion in Harvey claims. insurance. eas such as Houston’s Meyer- cycleofdisaster,reform, retreat Hunter,who ran the flood insur- than $5 billionindamage caused cline FEMA buyouts to still get then controlled the House and imbursed homeowners for the ing Congress, stormed into Hen- Todd and Genie Middle- Those subsidies have helped land and Greenspointneighbor- and ever more costlydisasters. ance program from 1974 to 1977. by Tropical StormAllison in disaster assistance if they stayed were in striking distance of the higher premiums they had paid. sarling’s ofce. Howard said he ton bought their home in the lure generations of homeowners hoods, developed around Brays “Itislikehitting your hand Hunter recalled one battle 2001 to more than $100 billion into properties thattrapthem in and Greens bayous, and parts of with ahammer overand over with the late Sen. Thomas Eagle- from Hurricane Harvey. The in flood-prone areas. Senate. Over the 2013-2014 elec- It also restored grandfather- demanded Hensarling pull the Norchester neighborhood for acycle of building,flooding and unincorporated Harris County again,” said Sam Brody, aTexas ton, the Missouri Democratwho followingaccountsare based “You are not going to kick us tion cycle, Realtors alone donat- ing provisions that allow hom- language stripping flood insur- $120,000 almost 20 years ago. rebuilding.HenryThompson near Cypress Creek,including A&MUniversityprofessor and wasbrieflyGeorge McGovern’s on congressional testimonyand out of Louisiana,” Tauzin said ed more than $55 million to con- eowners to maintain low rates, ance from new homes, arguing Like many of their neighbors, and his wife,for example, bought the Norchester neighborhood technical adviser to Gov. Greg running mate in the 1972 presi- other documents, campaign fi- during the floor debate. “Not gressional campaigns, of which even if the flooding risk increas- it would hurt real estate prices they were willing to take their their home not farfromCypress where the Thompsons and Hills Abbott, “and nevermoving your dential election. Eagleton lob- nance and lobbying disclosure with this bill or any other bill.” $32 million, or about 60 percent, es, and transfer those low rates to along the coast. chances with flooding. They Creek three years ago. They live. hand away.” bied Hunter to allowagricultural records, and dozens of inter- Baker and Tauzin declined to went to Republicans — including new owners after a sale. At the same time, House loved the tree-lined streets and knewthe neighborhood north- About 2,700homes scattered businesses thatplayalarge role views with lawmakers, congres- comment. more than $645,000 to Eric Can- Cassidy said his constituents members were getting nervous, forest bordering their backyard west of Houston flooded, but the in theseand other vulnerable AwarningfromLBJ in Missouri’s economy and poli- sional aides, lobbyists and tech- The bill that ultimately passed tor of Virginia, then the House deserved afordable flood insur- fearing a hit to real estate devel- — and flood insurance was just costofflood insurance wasso Harris County neighborhoods Thefederal governmentgot tics to significantlylowerflood nical experts. the House and the Senate in 2004 majority leader. ance. He defeated Landrieu, win- opmentin their districts. Hensar- $378 a year. low—about $400 ayear —they flood so often and so severely into flood insurance because pri- insurance premiums by build- In 2003,Rep. Doug Bereuter, barely resembled the one filed by Realtors also contributed ning one of nine seats claimed by ling’s staf talked to Scalise’s, who The Middletons’ luck ran out bought anyway. that they have collected acom- vate companies would no longer ing circular dams around grain aRepublican fromNebraska, Bereuter and Blumenauer. The heavily to three Republican Republicans as they took control said the new construction provi- in 2016, when the Tax Day floods Then Harvey swept2feet of bined $574 million in insurance providecoverage after devastat- elevators along the Missouri and and Rep. Earl Blumenauer, an number of repetitive loss prop- lawmakers pushing the repeal of the Senate. Republicans held sion was a “nonstarter.” That lan- washed more than 2 feet of water water undertheir threshold, payments since 1978, according floods nearly bankrupted Mississippi rivers. Oregon Democrat,tookaim at erties covered by the law was of Biggert-Waters, including the House, too, winning in battle- guage was cast aside, too. into their home. The National forcingthem to live on thesecond ing to FEMA data obtained by some of them in the early partof Insuranceprogramengineers, akey driverofballooning flood vastly reduced. Premiums re- $400,000 to then-Rep. Bill Cassi- ground districts in New Jersey “You’re dealing with mem- Flood Insurance Program sent floor for the pastthree months the National Resources Defense the 20th century. By the 1960s, however, determined thatsuch insurance costs: properties that mained far below market rates. dy of Louisiana, $126,000 to Rep. and New Yo rk hard hit by Sandy. bers, and at some point you have them $110,000 to make repairs. with amicrowave,anelectric Council. themounting costs of disaster dams would increase flooding flood again and again. These “re- Other changes made the law so Steve Scalise, also of Louisiana, Cantor, who now works at to count votes,” Hensarling said. They lived for four months with skillet and two young children. None of this should come as a relief for flooding victims led up and down river, and Hunter petitivelossproperties”—which complicated that it took FEMA and $245,000 to Rep. Michael an investment bank, declined Before the end of June, the their three teenage children in a They want to sell butcan’t imag- surprise to the country’s leaders. lawmakers and policymakers to turned Eagleton down. Thesena- they defined as twoormore years to implement — so long Grimm of New Yo rk, who repre- to comment. A former stafer, Real Estate Round Table, a po- camping trailer in the driveway. ine they’ll find abuyer,leaving Report after report has warned propose an insurance program tor spentthe next year trying to claims over10years —repre- that key parts of the law expired sented Staten Island. Neil Bradley, said politics played litical action committee, donated Hurricane Harvey filled the them with little choice buttocash Congress thatitneeds to raise backed by the federal govern- getHunterfired, complaining to sented just 2 percent of insured soon after FEMA adopted all of Cassidy was running for Sen- no part in the repeal of Biggert- $5,000 to Hensarling’s cam- house with more than 4 feet of the insurance check, rebuild and premiums, enforce mandatory ment. the watchdog GovernmentAc- properties but accounted for 40 the rules. ate against Sen. Mary Landrieu, Waters. Scalise, now the House paign, the National Association water. Now they’re back in the wait for thewaters to rise again. insurancepurchaserequire- Theideawas to create amech- countability Ofce thatHunter percentoflosses. Barely a year after the bill the Deep South’s last Democratic majority whip, the third-highest of Home Builders PAC $2,500. trailer, rebuilding with a $73,000 “You’restuck,”Thompson ments and enroll more property anismfinanced by premiums was improperly appointed and One $50,000 home in Can- passed, Hurricane Katrina hit holdout. Other House Republi- post in House leadership, also In June, insurance PACs wrote check from the National Flood said. “That’sthe onlyway to put owners in the program. thatwould protectproperty should be removed. ton, Miss., for example,flooded New Orleans, killing more than cans seeking re-election worried said the repeal had nothing to do a letter to Hensarling asking for Insurance Program and hoping it.” Butreforms thatFEMA of- owners from flood losses while “Hewanted me to bend the 25 times in 18 years — once ev- 1,800 people and causing more irate homeowners would blame with politics. changes to the legislation. In Sep- for more. Theflood insurance program cials, insurance specialists and reducing the need for taxpay- rules and let large financial inter- eryeight months —and cashed than $160 billion in damages. The them for skyrocketing premiums. “It had to do with a large num- tember, they and another insur- The Middletons say they don’t is $20billion in debt now, and financial analysts sayare needed ers to foot the bill. In 1966,atask ests in Missouri getlowerrates,” $161,000 in flood insurance pay- flood insurance program paid $18 But the House Financial Ser- ber of members in our confer- ance group gave his campaign plan to leave. If they flood again, it likely will require morecash to achieve theprogram’s original forcecommissioned by Presi- said Hunter,who later servedas ments. Ahome in Houston, val- billion in claims, borrowing from vices Committee — which over- ence recognizing that millions of committee $13,500. they’ll rebuild again. next year from taxpayers, who goals have runintothe forces of dent Lyndon B. Johnson recom- Texas’ insurance commissioner ued at $114,000,filed16claims be- taxpayers to meet the obliga- sees flood insurance legislation homeowners would have been Scalise, the majority whip, Their flood insurance rates? alreadyhavebailed out the pro- power, moneyand influence. mended thatthe governmentof- and is nowinsurance director for tween 1989 and 1995 and collected tions. Most of that money, $16 bil- — was uninterested. Committee thrown out on the street,” he said who was still in a hospital after They rose last year for the first gram 16 times in 25 years totaling About 140 companies and trade fer below-marketrates to entice the advocacy organization Con- morethan$806,000 in payments. lion, was never repaid; Congress Chairman Jeb Hensarling, a Dal- in November. “A nd that was un- being shot by a disgruntled Il- time — to $410 year. $42 billion in loans and grants. groupsrepresenting builders property owners to enroll in the sumer Federation of America in In January2003, Bereuterand forgave the debt this year, rec- las Republican, favored higher tenable.” linois man during a congressio- Those figures don’tinclude the needing property to develop, program. Butitwarned thatsuch Washington. “Congress puts a Blumenauerintroduced theTwo ognizing it would bankrupt the premiums to make the program It was still business as usual nal baseball practice in June, got Coming Wednesday: Part 3 hundreds of billions of dollars banks wanting to write mort- an approach presented dangers if lotofpressure on the program, Floods And Yo uAre Out Of The program. self-supporting. He refused to al- in Houston, too. Not long after a call from House Speaker Paul What’s in a Houston floodway? in disaster relief not covered by gages, real estate agents looking lowinsurance costs were allowed and very few people are willing Taxpayers’ Pocket Act. Their pro- low a repeal bill through his com- the repeal, Christy and Jonathan Ryan, telling him to work out Property worth $13 billion. flood insurance. to sell homes, and insurers hop- to become incentivesfor building to stand up to it.” posal:Ifahomeowner made two Reform and repeal mittee. Shofner bought their home in a deal with Hensarling. When They also don’tcapture the ing to profit from flood policies in flood-prone areas. insurance claims within10years, Katrina crippled the program, “I wasn’t going to make the the Norchester neighborhood for Scalise returned in September, [email protected] financial stressand anxieties have lobbied to block, influence “Itwouldaggravate flood Powerofthe ‘interests’ FEMA would ofer to move the which limped along until 2012, program less fiscally sustain- $215,000. Forty dollars a month Hensarling was left with two twitter.com/@davidhunn of families who have sunk life or water down reforms during damages and constitute gross Those pressures mounted as house, elevate it above flood level when lawmakers from both par- able,” Hensarling said in an in- for flood insurance didn’t seem choices: compromise or kill the savingsintohomes thathave the past15years, the Chronicle’s public irresponsibility,” the task the danger predicted by John- or razeit, paying marketvalue to ties pushed through the most terview. like much of a risk. bill. [email protected] become all but worthless. Eight examination found. force concluded. son’s taskforce —low-costflood return theproperty to grass and ambitious revision in its history. So Cassidy and Scalise went Two years later, 5 feet of wa- The two men met twice and twitter.com/@ryanmhandy doorsdownfromthe Thomp- Together,thesespecialin- Congress heeded thatwarn- insuranceencouraging denser forest. The law, known as Biggert- around Hensarling, forming ter rushed into their house dur- agreed to a deal in which premi- sons, Jeremy and Amber Hill terests have poured more than ing when it created the National developmentalong waterfronts Butifhomeowners declined Waters after its sponsors, Rep. a caucus of House members ing the Tax Day floods. They ums would rise on properties [email protected] and their four boys,ages3to12, $350 million into congressional Flood InsuranceProgram in and in low-lying areas — came such assistance,premiums Judy Biggert, an Illinois Repub- concerned about rising flood had barely settled back in after with multiple claims — but only twitter.com/@osborneja find themselvesinasimilar bind. campaign committees. They’ve 1968, calling for stateand local true. TheNational Flood Insur- would at leastquadruple to cover lican, and Rep. Maxine Waters, insurance premiums and draft- rebuilding with $130,000 from Their home has flooded twice also hired at least20formerstaf- governments to “constrict the ance Program is on track to pay the costsofinsuring such ahome. a California Democrat, did what ing legislation that would undo their flood insurance claim and in the six years they’ve owned ers of keyflood insurance law- They also would become ineli- reformers and insurance spe- Biggert-Waters. In October 2013, $40,000 of their own money it.Theycan’t sell.But theycan’t makers to lobbyrepresentatives gible for disaster assistance that cialists had sought for so long. It that caucus started meeting with when Harvey’s rains inundated About the journalists stay,either. and senators —insomecases pays for losses notcovered by in- significantly raised premiums to Cantor, who believed repealing the property with 10 feet of water. DAVID HUNN came to the Chronicle in June 2016 as an enterprise “The kids,” said JeremyHill, their old bosses —and formed surance. levels that reflected the risks and Biggert-Waters would help Re- “You’re financially trapped,” reporter covering energy. He has since written on bankruptcies and “have apanic attack everytime it alliances with friendlylawmak- “Wehaveseen people diebe- costs of potential claims from publicans hold the House, pos- said Christy Shofner. “We’re debt loads after the 2014 oil price crash and the boom in the Permian rains.” ers whose political interests lie in causethey live in places where flooding. sibly give Cassidy a Senate seat, either forced to sell at a lowball Basin that followed. He previously worked at the St. Louis Post- protecting the program. God has repeatedly shown that But five months later, Hur- and help the party take control of price, or we’re forced to put it Dispatch, where he was on a team that was a finalist for a Pulitzer Moneyand power No congressional delegation he does not want them,” Blume- ricane Sandy hit the East Coast the Senate, according to several back together, wait for the next Prize for coverage of a city hall shooting. Fewplaces in the countryem- has been friendlier than Louisi- nauer said after introducingthe just before FEMA began to former and current congressio- flood, and claim again.” RYAN MAYE HANDY covers the regulation of utilities and oil and gas bodythe issues undermining the ana’s, andnonehas done more to bill. “Wedonot do them anyfa- raise rates. Homeowners, strug- nal aides and lobbyists involved in Texas. She came to the Chronicle in October 2016 from Colorado, flood insurance program better derail flood insurance reforms, vors.” gling to recover from the storm, in negotiating the bill. Pulling lines out of bills where she worked as a reporter for nearly six years covering energy and thanTexas and metropolitan particularlythose thatwould Over the next several months, howled. “Undoing Biggert-Waters re- The flood insurance program the environment, county government and natural disaster recovery. Houston. raise premiums and restrict lawmakers and special inter- The National Association forms became a political football, soon was back in a familiar po- JAMES OSBORNE covers the intersection of energy and politics from In Texas, more than 40 per- building. ests converged on the bill. The of Home Builders claimed the and basically what resulted was sition, with claims rising faster the Chronicle’s Washington bureau. Before arriving in 2016, he spent cent of the homes required by Louisiana has receivedfar Mortgage Bankers Association higher rates were scaring po- a triumph of politics over policy,” than premiums and more prop- three years covering Texas’ energy sector for the Dallas Morning News, federal lawtocarryflood insur- more in flood insurance payouts of America, whose members tential buyers away and driving said Steve Ellis, vice president of erties vulnerable to flooding where he chronicled the hydraulic fracturing boom, the rise of the wind ance don’thaveit, according to a than anyother state, $20billion write loans on abig chunk of the down property values, which the watchdog group Taxpayers coming on its rolls. and solar industries and how technology is changing the ways we 2014 studyfor theFederal Emer- between 1978 andSeptember this $1.2 trillion in property insured in turn undermined incentives for Common Sense, who was in- In early 2017, Hensarling tried produce and consume energy. gency ManagementAgency.Har- year,more than double the $8 bil- by theprogram,pushedtokeep to remodel. Real estate agents volved in the negotiations. “Here again to shore up the program’s JON SHAPLEY, a videographer for the Chronicle, is a native ris County premiums, averaging lion paid during thatperiod to premiums lowonrepetitive-loss sent lawmakers copies of hous- we are subsidizing people to finances. He and Rep. Sean Houstonian who joined the staf in 2015. He previously worked at the about $550 ayear,are onlyabout the runner-up, Texas, which Harvey filled theMiddletons’home with4feetofwater. Storm continuesonA19 ing contracts in Florida, Louisi- build in harm’s way.” Dufy, the Wisconsin Republi- NPR afliate in Austin as well as monthly magazines in Austin and San ana and North Carolina that fell With Cantor’s help, Cassidy, can who chairs the insurance Antonio. He can be reached at [email protected].

Rising flood insurancecosts Morehomes in the flood plain $20b The way forward flood plain and discourage new ones. Update flood plain maps regularly. reflect real risks and make residents think Since 1978,the National FloodInsurance 2017 Thereare at least26,500 more insured homes in $14billion But that doesn’t mean taxpayers have The federal government has no twice before buying in flood plains — Program haspaid out $72billion in the Houstonmetropolitan area flood plain now 2005 HARVEY Scientists, engineers, advocates and to pay to insure those homes. Congress requirement to update flood maps. In the reducing damage to homes, payouts and claims, adjustedfor inflation. Hurricane than in 2001, ariseof 100,000 $21.8 IRMA flood plain managers say the National considered barring new development Houston area, the maps range from being buyouts from the federal government. As Harvey claims, projected to cost billion MARIA nearly30percent. 97,152 Flood Insurance Program is broken. from the flood insurance program as 3 years old to 30. If updated more regularly, long as insurance rates remain low and $11 billion,likelywill make this decade KATRINA $15b WILMA Congress has failed to fix it. But experts recently as this fall, but the provision they would reflect new construction, new claims continue to rise, the National Flood the most expensivedecadeever. TOTAL, HOUSTONMSA 80,000 RITA 2012 generally agree on several solutions: was dropped from legislation. rainfall trends and new flood control Insurance Program will fall even deeper $9.95 projects. The more recent the data, the into debt. Source:FEMA billion Stop insuring new construction in the Increase buyout money for properties better the flooding estimates will be. ADJUSTED 2004 SANDY 70,578 HoustonChronicle FORINFLATION 60,000 $2.84 $10b flood plain. that are damaged repeatedly. Ofer financial aid to help poor Builders in Houston are allowed to Homes that have been flooded End grandfathering of insurance homeowners pay full-risk premiums. billion 37,817 IVAN 2008 2016 2017-19 construct new homes in the flood plain multiple times are hard to sell, and, premiums. If Congress raises premiums to $3.89 $3.69 CITY OF HOUSTON CHARLEY Data are 40,000 as long as the homes are elevated when sold, often go to unwitting The National Flood Insurance reflect actual flood risk, lawmakers 1979 1989 1992 1995 2001 FRANCES billion billion estimates $1.49 $1.24 $1.19 IKE MATTHEW to or above flood levels — a tactic buyers, trapping them in properties Program purposely discounted rates recognize that some homeowners will $2.03 $1.73 $5b 23,132 billion billion billion billion billion that doesn’t always spare them that likely will flood again — and 45 years ago, soon after its creation, not be able to aford them. In 2012, DAVID HUGO ANDREW OPAL ALLISON 13,962 20,000 from flooding. There are now roughly demand repeated payments from to get more homeowners to buy when Congress passed the Biggert- FREDERIC CITY OF GALVESTON 26,000 more homes in the Houston- taxpayers. When the federal or local insurance. But many of those premiums Waters Act that caused premiums to area flood plain than 20 years ago. government buys out homes, however, have stayed artificially low. In some spike, many lawmakers and federal $1b HARRIS COUNTY 11,109 That was not the goal of the National they demolish the buildings, ending cases, homeowners can even pass on ofcials discussed ofering reduced flood 78’’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 ’01 ’02 ’03 ’0044 ’0055 ’0066 ’0077 ’0088 ’09 ’10 ’1111 ’1122 ’1133 ’1144 ’1155 ’1166 17 Flood Insurance Program, which was the cycle. Harris County has targeted “grandfathered” rates when they sell insurance rates based on household designed to insure existing homes in the roughly 5,500 properties for buyouts. their homes. Experts say rates should income. But they never followed through. Dec. 10, 2017

DEVELOPING STORM

The National Flood Insurance Program is $20 billion in debt and encourages building in vulnerable areas. Eforts to fix it have been stymied by coastal lawmakers and special interests. Build, flood, rebuild: flood insurance’s expensive cycle

Jon Shapley Henry Thompson and his wife, Kate, knew the Cypress Creek area ﬂooded but were reassured by cheap ﬂood insurance. DEVELOPING STORM

By David Hunn, Ryan Maye Handy and James Osborne

The National Flood Insurance Pro- thousands of homes in the Houston gram, designed to protect Americans area that flooded during Hurricane from catastrophic floods, has failed in Harvey. almost every way, encouraging people It was designed to insure properties to buy and build in flood-prone areas vulnerable to flooding, but only half of while increasing the cost and magni- such properties carry flood insurance tude of disasters. as required by law. Congress’ eforts to reform the pro- It was intended to reduce the costs gram have failed just as thoroughly. of disaster relief, but those costs have Attempts to fix flood insurance have exploded. been derailed repeatedly by special It was supposed to be self-support- interests, political expediency and ing, but premiums don’t come close to powerful lobbies that have poured covering the expenses, requiring re- hundreds of millions of dollars into peated bailouts by taxpayers. congressional campaigns, a three- “Without those billions of dollars month examination by the Houston in subsidies, you couldn’t have water- Chronicle reveals. Banks, builders, front development the way it is today,” insurers and real estate agents — sup- said Craig Poulton, CEO of Poulton ported by property owners and allies in Associates, one of the country’s largest Congress — have combined to thwart administrators of private flood insur- even the most practical changes. ance. Earlier this year, for example, a pro- Those subsidies have helped lure posal to stop the federal government generations of homeowners into from insuring homes built in flood properties that trap them in a cycle plains beginning in 2021 was scuttled of building, flooding and rebuilding. by coastal lawmakers and the National Henry Thompson and his wife, for ex- Association of Home Builders, which ample, bought their home not far from spent $39 million lobbying Congress Cypress Creek three years ago. They since 2005. knew the neighborhood northwest of The impact of Congress’ failure is Houston flooded, but the cost of flood undisputed. The National Flood In- insurance was so low - about $400 a surance Program was supposed to year - they bought anyway. discourage development in flood- Then Harvey swept 2 feet of water prone areas, but new development has under their threshold, forcing them spread across flood plains, including to live on the second floor for the past

Hurricane Harvey dumped an unprecedented amount of rain on Houston, but the resulting damage was multiplied by decisions made — and not made — during the past 50 years. During the next two weeks, a Houston Chronicle investigation will explain why the August storm was both a natural and man-made disaster. DEVELOPING STORM

Jon Shapley three months with a microwave, an Henry Thompson watches his son Harrison, 4, play electric skillet and two young children. with a box of packing peanuts in a second-floor bedroom of the family’s flood-damaged home. They want to sell but can’t imagine they’ll find a buyer, leaving them with little choice but to cash the insurance check, rebuild and wait for the waters have become all but worthless. Eight to rise again. doors down from the Thompsons, Jer- “You’re stuck,” Thompson said. emy and Amber Hill and their four “That’s the only way to put it.” boys, ages 3 to 12, find themselves in The flood insurance program is $20 a similar bind. Their home has flood- billion in debt now, and it likely will ed twice in the six years they’ve owned require more cash next year from tax- it. They can’t sell. But they can’t stay, payers, who already have bailed out the either. program 16 times in 25 years totaling “The kids,” said Jeremy Hill, “have a $42 billion in loans and grants. Those panic attack every time it rains.” figures don’t include the hundreds of billions of dollars in disaster relief not Money and power covered by flood insurance. Few places in the country embody They also don’t capture the financial the issues undermining the flood in- stress and anxieties of families who surance program better than Texas have sunk life savings into homes that and metropolitan Houston. DEVELOPING STORM

In Texas, more than 40 percent of About 140 companies and trade groups the homes required by federal law to representing builders needing proper- carry flood insurance don’t have it, ty to develop, banks wanting to write according to a 2014 study for the Fed- mortgages, real estate agents looking eral Emergency Management Agency. to sell homes, and insurers hoping to Harris County premiums, averaging profit from flood policies have lobbied about $550 a year, are only about one- to block, influence or water down re- third of the nearly $1,400 a year that forms during the past 15 years, the the nonpartisan Congressional Bud- Chronicle’s examination found. get Ofce estimates is needed to cover Together, these special interests have claims for flood damage here. poured more than $350million into Since 2001, according to federal congressional campaign committees. flood insurance data, the number of They’ve also hired at least 20 former homes in the region’s flood plains has stafers of key flood insurance lawmak- increased by an estimated 26,000. ers to lobby representatives and sena- People have bought, built and rebuilt tors —- in some cases their old bosses in areas such as Houston’s Meyerland — and formed alliances with friendly and Greenspoint neighborhoods, de- lawmakers whose political interests lie veloped around Brays and Greens in protecting the program. bayous, and parts of unincorporated No congressional delegation has Harris County near Cypress Creek, in- been friendlier than Louisiana’s, and cluding the Norchester neighborhood none has done more to derail flood where the Thompsons and Hills live. insurance reforms, particularly those About 2,700 homes scattered in that would raise premiums and re- these and other vulnerable Harris strict building. County neighborhoods flood so often Louisiana has received far more in and so severely that they have collect- flood insurance payouts than any oth- ed a combined $574 million in insur- er state, $20 billion between 1978 and ance payments since 1978, according September this year, more than double to FEMA data obtained by the Nation- the $8 billion paid during that period al Resources Defense Council. to the runner-up, Texas, which has five None of this should come as a sur- times the population. In a state with prise to the country’s leaders. Report so much low-lying land, so much de- after report has warned Congress that velopment in these areas, and power- it needs to raise premiums, enforce ful real estate interests, no Louisiana mandatory insurance purchase re- politician supporting increased flood quirements and enroll more property insurance premiums would ever get owners in the program. elected, members of Congress and But reforms that FEMA ofcials, in- their aides said. surance specialists and financial ana- All this has trapped federal lawmak- lysts say are needed to achieve the pro- ers in their own vicious cycle of disas- gram’s original goals have run into the ter, reform, retreat and ever more cost- forces of power, money and influence. ly disasters. DEVELOPING STORM

Jon Shapley

“It is like hitting your hand with a Todd Middleton shows his frustration while talking about damage to his Norchester home near hammer over and over again,” said Cypress Creek after the family’s second flood. Sam Brody, a Texas A&M University professor and technical adviser to Gov. Greg Abbott, “and never moving your hand away.” financed by premiums that would protect property owners from flood losses A warning from LBJ while reducing the need for taxpayers The federal government got into to foot the bill. In 1966, a task force flood insurance because private com- commissioned by President Lyndon B. panies would no longer provide cov- Johnson recommended that the gov- erage after devastating floods nearly ernment ofer below-market rates to bankrupted some of them in the early entice property owners to enroll in the part of the 20th century. By the 1960s, program. But it warned that such an the mounting costs of disaster relief approach presented dangers if low in- for flooding victims led lawmakers and surance costs were allowed to become policymakers to propose an insurance incentives for building in flood-prone program backed by the federal govern- areas. ment. “It would aggravate flood damages The idea was to create a mechanism and constitute gross public irresponsi- DEVELOPING STORM

bility,” the task force concluded. increase flooding up and down river, Congress heeded that warning when and Hunter turned Eagleton down. it created the National Flood Insur- The senator spent the next year trying ance Program in 1968, calling for state to get Hunter fired, complaining to the and local governments to “constrict watchdog Government Accountability the development of land which is ex- Ofce that Hunter was improperly ap- posed to flood damage.” But commu- pointed and should be removed. nities didn’t want to lose the tax mon- “He wanted me to bend the rules ey and economic activity that comes and let large financial interests in Mis- with construction, and congressional souri get lower rates,” said Hunter, representatives soon started pressur- who later served as Texas’ insurance ing flood insurance administrators to commissioner and is now insurance lower premiums, change flood plain director for the advocacy organization maps and let states make develop- Consumer Federation of America in ment decisions, said Bob Hunter, who Washington. “Congress puts a lot of ran the flood insurance program from pressure on the program, and very few 1974 to 1977. people are willing to stand up to it.” Hunter recalled one battle with the late Sen. Thomas Eagleton, the Power of the ‘interests’ Missouri Democrat who was briefly Those pressures mounted as the dan- George McGovern’s running mate in ger predicted by Johnson’s task force - the 1972 presidential election. Eagle- low-cost flood insurance encouraging ton lobbied Hunter to allow agricul- denser development along waterfronts tural businesses that play a large role and in low-lying areas - came true. The in Missouri’s economy and politics to National Flood Insurance Program is significantly lower flood insurance on track to pay some $39 billion in premiums by building circular dams claims during this decade, nearly sev- around grain elevators along the Mis- en times the $6 billion, adjusted for souri and Mississippi rivers. inflation, paid in the 1980s, according Insurance program engineers, how- to federal data. ever, determined that such dams would Congress has repeatedly tried to fix

Rising flood insurance costs More homes in the flood plain $20b Since 1978, the National Flood Insurance 2017 There are at least 26,500 more insured homes in $14 billion Program has paid out $72 billion in the Houston metropolitan area flood plain now 2005 HARVEY claims, adjusted for inflation. Hurricane $21.8 IRMA than in 2001, a rise of 100,000 Harvey claims, projected to cost billion MARIA nearly 30 percent. 97,152 $11 billion, likely will make this decade KATRINA $15b WILMA the most expensive decade ever. TOTAL, HOUSTON MSA RITA 2012 80,000 $9.95 Source: FEMA billion ADJUSTED 2004 SANDY 70,578 Houston Chronicle FOR INFLATION 60,000 $2.84 $10b billion 2008 2016 37,817 IVAN 2017-19 CITY OF HOUSTON CHARLEY $3.89 $3.69 Data are 40,000 1979 1989 1992 1995 2001 FRANCES billion billion estimates $1.49 $1.24 $1.19 IKE MATTHEW $2.03 $1.73 $5b 23,132 billion billion billion billion billion DAVID HUGO ANDREW OPAL ALLISON 13,962 20,000 FREDERIC CITY OF GALVESTON

$1b HARRIS COUNTY 11,109

’78 ’79 ’80 ’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 DEVELOPING STORM the program, but three bills filed over assistance, premiums would at least the past 15 years show why reform ef- quadruple to cover the costs of insur- forts have failed even as the costs of ing such a home. They also would be- flooding disasters have grown, from come ineligible for disaster assistance more than $5 billion in damage caused that pays for losses not covered by in- by Tropical Storm Allison in 2001 to surance. more than $100billion from Hurri- “We have seen people die because cane Harvey. The following accounts they live in places where God has re- are based on congressional testimony peatedly shown that he does not want and other documents, campaign fi- them,” Blumenauer said after intro- nance and lobbying disclosure records, ducing the bill. “We do not do them and dozens of interviews with lawmak- any favors.” ers, congressional aides, lobbyists and Over the next several months, law- technical experts. makers and special interests converged In 2003, Rep. Doug Bereuter, a Re- on the bill. The Mortgage Bankers As- publican from Nebraska, and Rep. Earl sociation of America, whose members Blumenauer, an Oregon Democrat, write loans on a big chunk of the $1.2 took aim at a key driver of ballooning trillion in property insured by the pro- flood insurance costs: properties that gram, pushed to keep premiums low flood again and again. These “repet- on repetitive-loss houses, fearing that itive loss properties” - which they de- homeowners would default on mort- fined as two or more claims over 10 gages if flood insurance became too years - represented just 2 percent of expensive. insured properties but accounted for The National Association of Real- 40 percent of losses. tors, whose members earn commis- One $50,000 home in Canton, sions selling waterfront properties, Miss., for example, flooded 25 times fought to maintain below-market pre- in 18 years - once every eight months miums on vacation homes. The Real- - and cashed $161,000 in flood insur- tors gave $3.8 million to congressio- ance payments. A home in Houston, nal campaigns in 2003-04, including valued at $114,000, filed 16 claims $11,000 to Blumenauer and $11,000 between 1989 and 1995 and collected to Rep. Robert Ney, the Ohio Repub- more than $806,000 in payments. lican who chaired the subcommittee In January 2003, Bereuter and Blu- reviewing the bill, according to data menauer introduced the Two Floods compiled by the Center for Responsive And You Are Out Of The Taxpayers’ Politics, a nonprofit that tracks money Pocket Act. Their proposal: If a home- in politics. owner made two insurance claims Lawmakers representing states with within 10 years, FEMA would ofer to large swaths of land vulnerable to move the house, elevate it above flood flooding, particularly Texas, Louisiana level or raze it, paying market value to and Florida, fought to redefine “repeti- return the property to grass and forest. tive loss” as four claims, greatly reduc- But if homeowners declined such ing the number of homeowners afect- DEVELOPING STORM

Jon Shapley ed, Bereuter recalled. They also sought Harvey filled the Middletons’ home with 4 feet of to cap premium increases. water. Rep. Richard Baker of Louisi- ana, a former real estate agent and fourth-ranking Republican on the House and the Senate in 2004 barely House Financial Services Committee, resembled the one filed by Bereuter had the bill recast as a short-term pro- and Blumenauer. The number of re- gram that expired five years later. Rep. petitive loss properties covered by the Billy Tauzin, chairman of the power- law was vastly reduced. Premiums re- ful Energy and Commerce Commit- mained far below market rates. Other tee, persuaded House leaders to allow changes made the law so complicated homeowners who decline FEMA buy- that it took FEMA years to implement outs to still get disaster assistance if — so long that key parts of the law ex- they stayed in flood-prone areas. pired soon after FEMA adopted all of “You are not going to kick us out the rules. of Louisiana,” Tauzin said during the Barely a year after the bill passed, floor debate. “Not with this bill or any Hurricane Katrina hit New Orleans, other bill.” killing more than 1,800 people and Baker and Tauzin declined to com- causing more than $160 billion in ment. damages. The flood insurance program The bill that ultimately passed the paid $18 billion in claims, borrowing DEVELOPING STORM from taxpayers to meet the obliga- election cycle, Realtors alone donated tions. Most of that money, $16billion, more than $55 million to congressio- was never repaid; Congress forgave nal campaigns, of which $32 million, the debt this year, recognizing it would or about 60 percent, went to Republi- bankrupt the program. cans — including more than $645,000 to Eric Cantor of Virginia, then the Reform and repeal House majority leader. Katrina crippled the program, Realtors also contributed heavily to which limped along until 2012, when three Republican lawmakers pushing lawmakers from both parties pushed the repeal of Biggert-Waters, includ- through the most ambitious revision ing $400,000 to then-Rep. Bill Cas- in its history. sidy of Louisiana, $126,000 to Rep. The law, known as Biggert-Waters Steve Scalise, also of Louisiana, and after its sponsors, Rep. Judy Biggert, $245,000 to Rep. Michael Grimm of an Illinois Republican, and Rep. Max- New York, who represented Staten Is- ine Waters, a California Democrat, did land. what reformers and insurance special- Cassidy was running for Senate ists had sought for so long. It signifi- against Sen. Mary Landrieu, the Deep cantly raised premiums to levels that South’s last Democratic holdout. Oth- reflected the risks and costs of poten- er House Republicans seeking re-elec- tial claims from flooding. tion worried irate homeowners would But five months later, Hurricane blame them for skyrocketing premi- Sandy hit the East Coast just before ums. FEMA began to raise rates. Home- But the House Financial Services owners, struggling to recover from the Committee — which oversees flood storm, howled. insurance legislation — was uninter- The National Association of Home ested. Committee Chairman Jeb Hen- Builders claimed the higher rates were sarling, a Dallas Republican, favored scaring potential buyers away and higher premiums to make the program driving down property values, which self-supporting. He refused to allow a in turn undermined incentives to re- repeal bill through his committee. model. Real estate agents sent law- “I wasn’t going to make the program makers copies of housing contracts in less fiscally sustainable,” Hensarling Florida, Louisiana and North Carolina said in an interview. that fell through after flood insurance So Cassidy and Scalise went around premiums rose by an estimated hun- Hensarling, forming a caucus of dreds, if not thousands, of dollars. House members concerned about ris- Banks, builders, insurance compa- ing flood insurance premiums and nies and Realtors are major donors drafting legislation that would undo to political campaigns, particularly Biggert-Waters. In October 2013, that Republicans, who then controlled the caucus started meeting with Cantor, House and were in striking distance who believed repealing Biggert-Wa- of the Senate. Over the 2013-2014 ters would help Republicans hold the DEVELOPING STORM

House, possibly give Cassidy a Senate seat, and help the party take control of the Senate, according to several former and current congressional aides and lobbyists involved in negotiating the bill. “Undoing Biggert-Waters reforms became a political football, and basically what resulted was a triumph of politics over policy,” said Steve Ellis, vice president of the watchdog group Taxpayers for Common Sense, who was involved in the negotiations. “Here we are subsidizing people to build in harm’s way.”

With Cantor’s help, Cassidy, Scalise Jon Shapley and Grimm found a vehicle to bring Kate Thompson sits at the bottom of the stairs, their legislation to the House floor, upset because a contractor had told her repairs where it was approved overwhelming- would stretch into February. ly in March 2014. The Senate followed less than two weeks later, enacting a repeal that overturned most rate increas- had nothing to do with politics. es and even reimbursed homeowners “It had to do with a large number of for the higher premiums they had paid. members in our conference recogniz- It also restored grandfathering provi- ing that millions of homeowners would sions that allow homeowners to main- have been thrown out on the street,” he tain low rates, even if the flooding risk said in November. “And that was un- increases, and transfer those low rates tenable.” to new owners after a sale. It was still business as usual in Hous- Cassidy said his constituents de- ton, too. Not long after the repeal, served afordable flood insurance. He Christy and Jonathan Shofner bought defeated Landrieu, winning one of nine their home in the Norchester neigh- seats claimed by Republicans as they borhood for $215,000. Forty dollars a took control of the Senate. Republicans month for flood insurance didn’t seem held the House, too, winning in bat- like much of a risk. tleground districts in New Jersey and Two years later, 5 feet of water rushed New York hard hit by Sandy. into their house during the Tax Day Cantor, who now works at an invest- floods. They had barely settled back ment bank, declined to comment. A in after rebuilding with $130,000 former stafer, Neil Bradley, said poli- from their flood insurance claim and tics played no part in the repeal of Big- $40,000 of their own money when gert-Waters. Scalise, now the House Harvey’s rains inundated the property majority whip, the third-highest post in with 10 feet of water. House leadership, also said the repeal “You’re financially trapped,” said DEVELOPING STORM

Christy Shofner. “We’re either forced insuring homes built in flood plains to sell at a lowball price, or we’re forced starting in 2021. to put it back together, wait for the next The National Association of Real- flood, and claim again.” tors immediately sought meetings with Dufy, fearing that allowing grandfa- Pulling lines out of bills thered rates to rise would deflate prices The flood insurance program soon of waterfront properties and unravel was back in a familiar position, with deals. “We didn’t want a repeat of Big- claims rising faster than premiums and gert-Waters,” said Ken Wingert, a lob- more properties vulnerable to flooding byist with the Realtors group. coming on its rolls. The Realtors spent some $64million In early 2017, Hensarling tried again lobbying Congress last year - more than to shore up the program’s finances. He five times what Exxon Mobil spent. and Rep. Sean Dufy, the Wisconsin Re- Real estate interests also contributed publican who chairs the insurance sub- more than $143,000 to Dufy’s cam- committee, started circulating drafts of paign committee in 2017 alone. legislation that would phase out grand- Dufy said he remembered the out- fathered rates, sharply raise premiums cry from homeowners that killed Big- on properties that flood repeatedly and gert-Waters and wanted to preserve prohibit the federal government from other parts of the legislation that would

The way forward the flood plain and discourage Update flood plain maps reflect real risks and make new ones. But that doesn’t regularly. residents think twice before mean taxpayers have to The federal government has buying in flood plains — Scientists, engineers, pay to insure those homes. no requirement to update reducing damage to homes, advocates and flood plain Congress considered barring flood maps. In the Houston payouts and buyouts from the managers say the National new development from the area, the maps range from federal government. As long Flood Insurance Program is flood insurance program as being 3 years old to 30. If as insurance rates remain low broken. Congress has failed recently as this fall, but the updated more regularly, and claims continue to rise, to fix it. But experts generally provision was dropped from they would reflect new the National Flood Insurance agree on several solutions: legislation. construction, new rainfall Program will fall even deeper trends and new flood control into debt. Stop insuring new Increase buyout money projects. The more recent the construction in the flood for properties that are data, the better the flooding Ofer financial aid to help plain. damaged repeatedly. estimates will be. poor homeowners pay full- Builders in Houston are Homes that have been risk premiums. allowed to construct new flooded multiple times are End grandfathering of If Congress raises premiums homes in the flood plain hard to sell, and, when sold, insurance premiums. to reflect actual flood risk, as long as the homes are often go to unwitting buyers, The National Flood lawmakers recognize that elevated to or above flood trapping them in properties Insurance Program purposely some homeowners will not levels — a tactic that doesn’t that likely will flood again discounted rates 45 years be able to aford them. In always spare them from — and demand repeated ago, soon after its creation, 2012, when Congress passed flooding. There are now payments from taxpayers. to get more homeowners to the Biggert-Waters Act that roughly 26,000 more homes When the federal or local buy insurance. But many of caused premiums to spike, in the Houston-area flood government buys out homes, those premiums have stayed many lawmakers and federal plain than 20 years ago. however, they demolish the artificially low. In some cases, ofcials discussed ofering That was not the goal of the buildings, ending the cycle. homeowners can even pass reduced flood insurance rates National Flood Insurance Harris County has targeted on “grandfathered” rates based on household income. Program, which was designed roughly 5,500 properties for when they sell their homes. But they never followed to insure existing homes in buyouts. Experts say rates should through. DEVELOPING STORM increase money flowing into the flood turned in September, Hensarling was insurance program. left with two choices: compromise or “We decided we wanted to raise reve- kill the bill. nue,” said Dufy, who denied campaign The two men met twice and agreed to contributions changed his position, a deal in which premiums would rise on “but we wanted to do it gently.” properties with multiple claims — but The fight, however, was just begin- only based on future claims, not those ning. Jerry Howard, CEO of the Na- filed previously. On Nov. 14, the House tional Association of Home Builders, passed what was left of Dufy’s bill. who has spent more than two decades The legislation, still awaiting Senate lobbying Congress, stormed into Hen- action, would gradually raise premiums sarling’s ofce. Howard said he de- on the riskiest properties while encour- manded Hensarling pull the language aging insurance companies to write stripping flood insurance from new private flood insurance policies. homes, arguing it would hurt real es- Hensarling, who announced his re- tate prices along the coast. tirement in October, said campaign At the same time, House members contributions did not afect his moves. were getting nervous, fearing a hit to But he acknowledged the influence lob- real estate development in their dis- byists had on other lawmakers. tricts. Hensarling’s staf talked to Scal- “It’s discouraging from time to time ise’s, who said the new construction to have members of Congress essential- provision was a “nonstarter.” That lan- ly say, ‘I’m not interested in the policy. guage was cast aside, too. Tell me what outside group is for and “You’re dealing with members, and what outside group is against it,’” he at some point you have to count votes,” said. Hensarling said. Before the end of June, the Real Es- Still a bargain tate Round Table, a political action When Hurricane Harvey reached committee, donated $5,000 to Hen- Houston in August, it dumped 51 sarling’s campaign, the National Asso- inches of rain, flooding an estimated ciation of Home Builders PAC $2,500. 150,000 structures across the region, In June, insurance PACs wrote a letter and killing more than 80. to Hensarling asking for changes to In the months following, Harris the legislation. In September, they and County crews picked up 26,000 truck- another insurance group gave his cam- loads of debris ripped from people’s paign committee $13,500. flooded homes and dumped on their Scalise, the majority whip, who was lawns. The federal government has still in a hospital after being shot by a spent more than $1 billion in housing disgruntled Illinois man during a con- assistance to families driven from their gressional baseball practice in June, homes and expects the flood insurance got a call from House Speaker Paul program will eventually pay $11 billion Ryan, telling him to work out a deal in Harvey claims. with Hensarling. When Scalise re- Todd and Genie Middleton bought DEVELOPING STORM their home in the Norchester neigh- with their three teenage children in a borhood for $120,000 almost 20 camping trailer in the driveway. years ago. Like many of their neigh- Hurricane Harvey filled the house bors, they were willing to take their with more than 4 feet of water. Now chances with flooding. They loved the they’re back in the trailer, rebuilding tree-lined streets and forest bordering with a $73,000 check from the Na- their backyard — and flood insurance tional Flood Insurance Program and was just $378 a year. hoping for more. The Middletons’ luck ran out in The Middletons say they don’t plan 2016, when the Tax Day floods washed to leave. If they flood again, they’ll re- more than 2 feet of water into their build again. home. The National Flood Insurance Their flood insurance rates? They Program sent them $110,000 to make rose last year for the first time — to repairs. They lived for four months $410 year.

About the journalists

DAVID HUNN came to the Chronicle in June 2016 as an enterprise reporter covering energy. He has since written on bankruptcies and debt loads after the 2014 oil price crash and the boom in the Permian Basin that followed. He previously worked at the St. Louis Post-Dispatch, where he was on a team that was a ﬁnalist for a Pulitzer Prize for coverage of a city hall shooting.

RYAN MAYE HANDY covers the regulation of utilities and oil and gas in Texas. She came to the Chronicle in October 2016 from Colorado, where she worked as a reporter for nearly six years covering energy and the environment, county government and natural disaster recovery.

JAMES OSBORNE covers the intersection of energy and politics from the Chronicle’s Washington bureau. Before arriving in 2016, he spent three years covering Texas’ energy sector for the Dallas Morning News, where he chronicled the hydraulic fracturing boom, the rise of the wind and solar industries and how technology is changing the ways we produce and consume energy.

JON SHAPLEY, a videographer for the Chronicle, is a native Houstonian who joined the staf in 2015. He previously worked at the NPR afliate in Austin as well as monthly magazines in Austin and San Antonio. He can be reached at [email protected] m.