HUD Issues Proposed Rule on Floodplain Management

Climate-related disasters impact millions of Americans annually when roads wash out, power goes down, crops fail, and schools flood. The Federal Flood Risk Management Standard (FFRMS) was established to encourage federal agencies to consider and manage current and future flood risks. FFRMS requires agencies to prepare for and protect federally funded buildings and projects from flood risks. It requires agencies to determine specific federal building or project dimensions in order to manage and mitigate any current or potential flood risks.

HUD recently proposed a new approach to defining the FFRMS floodplain for HUD-assisted or financed projects. The proposed rule moves away from HUD’s current reliance on FEMA Flood Insurance Rate Mapping, using the 1-percent-annual-chance (100-year) floodplain based on historic flood data. The proposed shift to the FFRMS floodplain is, instead, “based on likely or potential climate change scenarios, regional climate factors, and an advanced scientific understanding of these effects.”

In seeking to incorporate climate risk to define the FFRMS floodplain for HUD-assisted or -financed projects, HUD proposes the following approach:

·         Climate-Informed Science Approach. Where available, the FFRMS floodplain is based on maps developed using a Climate-Informed Science Approach (CISA) applied throughout the anticipated life cycle of a project, an Environmental Impact Statement (EIS) analyzing sea level rise and other climate impacts, and approval by HUD.

·         Two-percent annual chance. Where CISA mapping or other CISA analysis is not available, HUD allows using the FEMA-designated 0.2-percent-annual-chance (500-year) floodplain for noncritical actions.

·         Freeboard value approach. Where CISA mapping and FEMA 2 percent risk data are not available, HUD allows using the Freeboard value approach (FVA) for noncritical actions, established by adding 2 feet to the base flood elevation established on the effective FIRM rate map or Flood Insurance Study (FIS). For critical actions where CISA data isn’t available, the FFRMS floodplain is established by the higher of the FEMA 2 percent annual floodplain or adding 3 feet to the base flood elevation.

The proposed rule also re-defines several key definitions, including how to identify wetlands, and updates the floodplain-hazard notification provisions for financial partners and current and prospective tenants. The proposed rule also clarifies that HUD or other responsible entities may require flood insurance coverage beyond the minimums established by the Flood Disaster Protection Act and encourages acquisition of flood insurance in areas outside of the Special Flood Hazard Area but within the FFRMS floodplain.