The Federal Emergency Management Agency (FEMA) has long provided insurance to communities in floodplain areas because private insurance companies have long shunned the potential risks in their portfolio. The government-backed National Flood Insurance Program was recently extended again, and it provides lower cost insurance options to waterfront home owners in certain river, lake, and even Puget Sound areas.
FEMA has recently been given feedback that their provision of lower cost insurance options to potentially flood prone areas has caused negative environmental impacts in those sensitive riparian areas where building would otherwise not occur if insurance rates were higher and market-driven. Recent focus has been on protected species such as salmon and orca whales, and the interconnected web of shoreline management with their lifecycles and range of habitat.
In response, FEMA is working on more restrictive building rules for around 122 western Washington communities. This will only directly affect new construction and those interested to get insurance through the program (which can sometimes be required for financing).
So, as with many things, this can be good or bad depending upon what kind of waterfront property you own. If you own or are looking to buy land to develop, this will be a new consideration. If you already own or are looking to purchase an existing waterfront home, it only makes your property more valuable since future supply of competing waterfront homes is more restricted, and waterfront is a fixed commodity. Your neighborhood will also more likely have continued salmon friendly natural habitat.
