IREM Blogs


Houston Area Voters Approve $2.5 Billion in Flood Bond

September 11, 2018 | Ted Thurn

On August 25, a year to the day after Hurricane Harvey devastated the Houston region, voters in Harris County, Texas, which includes the Houston-The Woodlands-Sugar Land metropolitan area, went to the polls to vote on a $2.5 billion infrastructure bond to finance flood damage reduction projects.

The IREM Houston Chapter, through grassroots efforts and social media, strongly urged members and the community at large to support the bond measure. Not only did IREM Houston support the measure, the Chapter made a $2,500 contribution to the Flight Flooding PAC, a Political Action Committee founded by concerned county and city leaders to address Harris County’s flood problem.

The IREM Houston Chapter was intimately involved in supporting this effort, as the Houston region has been affected by five major storms since 2001. These storms have cost hundreds of lives and billions in property damage while the amount of property taxes dedicated by Harris County to flood control has fallen from $0.08 per $100 of valuation to less than $0.03.

IREM has been monitoring the proposal in Harris County as flood reduction is not only important to the Houston area, it is an important property management issue nationwide. Over the past year, IREM Members have been engaged with their federal legislators about the National Flood Insurance Program (NFIP). NFIP is a partnership between federal, state and local governments helping to mitigate flood risk by providing affordable flood insurance to 5.6 million families and businesses. NFIP provides 90 percent of all flood insurance nationwide and close to 100 percent for individually owned residential and small-to-mid-sized commercial properties.

The program was set to expire in March and again on the last day of July. Each time the program was set to expire, IREM members contacted their legislators, urging them not to allow the program to lapse. Congress has extended the program until November 30, 2018. It was the seventh short-term extension of the program since September 2017.

IREM will continue to advocate for long-term reform and reauthorization bill for NFIP. Provisions in a long-term reform bill should include: reauthorize NFIP for at least five years; increase affordability through annual rate caps and lower surcharges; direct FEMA to develop more granular rate tables that better align rates with actual risk; fund loans and grants to help mitigate flood risk; and increase access to private market flood insurance.

With respect to the Houston referendum, the IREM Houston Chapter’s efforts were successful as voters approved the historic measure by a whopping 85 percent, making it the largest bond Harris County voters ever approved. Bonds will not be sold all at once but in increments over at least 10 to 15 years as needed for the projects and their multiple phases. Projects will be authorized individually for funding by Harris County Commissioners Court, based on recommendations by the Harris County Flood Control District (Flood Control District).

Based on the $2.5 billion in bonds and a likely borrowing schedule over approximately 15 years, the Harris County Budget Management Department estimates that the overall tax increase will be no more than 2 to 3 cents per $100 of home valuation—meaning that most homeowners will see an increase of no more than 1.4 percent in their overall property tax. A homeowner with an over-65 or disabled exemption and a home worth $200,000 or less would not pay any additional taxes for these bonds.

The bond program already has a list of 237 proposed projects. High on the list are construction-ready projects with federal funding partners (such as the U.S. Army Corps of Engineers and the Federal Emergency Management Agency). The list also includes locally funded projects in economically disadvantaged communities that may not meet the federal grant requirements, but where there is a substantial need for flood damage reduction work. Consideration will also be given to areas that have a lower level of current protection as compared to other areas in the county.

Projects will be prioritized based upon a number of factors, including: readiness for preliminary engineering, design or construction; availability and/or time-sensitive nature of partnership funding; clearly defined drainage issues and flood risk reduction benefits; and benefits relative to the community’s population.

  • Potential projects supported by the bond funds include:
  • Channel modifications to improve stormwater conveyance
  • Regional stormwater detention basins
  • Major repairs to flood-damaged drainage infrastructure
  • Removing large amounts of sediment and silt from drainage channels
  • Voluntary buyouts of flood-prone properties
  • Wetland mitigation banks
  • Property acquisition for preserving the natural floodplains
  • Drainage improvements made in partnership with other cities, utility districts or other local government agencies
  • Upgrading the Harris County Flood Warning System

Some of these projects will be funded through partnership agreements with the Federal Government. Bond funds will be used to provide the “local match” funding that is required for participation in these federal partnerships.

About the Author
Ted Thurn (tthurn@irem.org) is director of government affairs at IREM Headquarters in Chicago.



Comments

05 Oct 2018 | Alice Devine
Congratulations on your strategy and support for these important funds to assist Houston.
Reply
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