Project Spotlight: Incentivizing flood vents with fee waivers

March 2, 2020

In the Project Spotlight series, we will be highlighting the creative work done by local government officials to incentivize and fund mitigation projects throughout the country.

Cape May, New Jersey is a small coastal community of just under 3,500 residents known for its historic district. The city is one of a trio of municipalities sitting on a man-made island at the tip of the Cape May Peninsula. Many of the community's residents live in FEMA-designated Special Flood Hazard Areas — these zones carry development restrictions to limit risk and loss in the event of a flood. Like many local governments in the U.S., the City of Cape May is limited in how and when it can enforce floodplain compliance. Because legal recourse is only sometimes applicable, the municipality has utilized a variety of outreach and education techniques to encourage mitigation. For example, Cape May offers property owners a 20% discount on NFIP flood insurance policies through its participation in FEMA's Community Rating System. In 2017, the city also piloted a program to encourage residents to purchase flood vents.

Cape May's flood vent incentive program ran for one year and offered residents a permit fee waiver for flood vent installation projects. Flood vents are popular mitigation options in coastal New Jersey communities, as they mitigate against water pressure build-up during flood events and are often effective in lowering flood insurance premiums. In an island community like Cape May, these benefits can result in significant cost savings for residents (both on an ongoing basis and during flood events). We spoke with Lou Belasco, the municipality's Tax Assessor and CRS Coordinator to learn more about how the program was implemented and what lessons were learned in the pilot.

Costs & Impacts

About 100 property owners utilized the flood vent permit waiver program during the year that the pilot ran. There are around 4,000 properties in Cape May, approximately 75% of which are in a Special Flood Hazard Area, so this represented a substantial portion of the city's housing stock. On average, applicants saved about $100 in permit fees. A big win for the City was the participation of a large condominium complex consisting mostly of 1 bedroom units.

Through our conversations with municipal officials, we've heard that forgoing income is a significantly more attractive option than spending existing funds. In exchange for compliance, the city forwent about $10,000 in construction fees. Lou notes:

"It was the carrot that we could offer. We couldn't start writing checks to people, but we could do this. We were able to bring 100 homeowners into compliance, and that's a lot. It cost a little bit but, in the long run, we felt strongly about getting some of these structures into compliance that might never have installed vents otherwise."

Generating Buy-in & Lessons Learned

Something we hear a lot is that it is importance to generate elected official buy-in for mitigation incentive programs. Lou spoke about how crucial this was for Cape May, where the flood vent permit waiver program originated with executive government. In 2017 Clarence F. Lear III was sworn in as a new Mayor for the community. Shortly after starting his term, Mayor Lear floated the idea of waiving permitting fees with Lou and his peers. They replied with enthusiasm: "There's only one way to find out." To implement the waiver, a city resolution was passed. In Lou's opinion, this process was greatly expedited by mayoral backing. For communities interested in similar efforts, buy-in from governing officials can be a crucial factor in enabling programs that leverage city income for mitigation.

To spread the word about the incentive program, announcements were made at a city council meeting and at a local taxpayers association meeting. Reflecting on the pilot, Lou had a few thoughts that similar communities might find useful. He noted that part of the program's draw was its time-sensitive nature:

"If you do it too often, you lose the incentive you're looking to create. To bring it back year after year wouldn't be as effective."

The rarity of the pilot meant that property owners needed to act quickly to take advantage of it. It also allowed the city to plan for a specific amount of time during which permit income was lost. We imagine that the budgetary impact of a continuous program would be much harder to calculate.

Given the success of the flood vent pilot, the City of Cape May is considering similar compliance incentive programs for the future. Deciding what to offer is an art unto itself. Says Lou:

"The key is identifying something that is incentivizing to an individual but does not hurt the city-wide budget."

For a lot of communities, this is likely to be a fine line to walk. Once the City decides on a new incentive, Lou will probably conduct more outreach, noting that the City anticipated that news of the program would spread more readily than he did. More active outreach will hopefully engender even more participation.

Are you working on a project that encourages or alleviates the burden of mitigation in your community? We would love to share your insights! Get in touch with us here.

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