SOUTHEASTERN N.C. — With FEMA’s deadline to adopt new map changes approaching, how will new floodplain designations impact property values?
FEMA’s new zoning categorizations reveal a pattern of change, according to multiple floodplain administrators’ reports in southeastern North Carolina.
The reports show thousands of oceanfront properties being zoned into a lower risk category. At the same time, thousands more inland properties are being added to the floodplain for the first time.
RELATED: FEMA zoning changes approved in Carolina Beach, more properties added to 100-year floodplain
It appears new categories could impact what developers choose to build on their property.
From apartments to storage
FEMA’s new maps were cited by owners of over 8 acres of property on North College Road in a July 11 rezoning request. What was originally planned to be multi-building apartment complex in New Hanover County could soon be a storage facility, instead.
Adjacent to Emsley A. Laney High School, the property’s owners are anticipating rising costs pending flood zone changes. In 2016, the property was rezoned from highway business district to conditional use residential district.
New Hanover County Commissioners granted property owners a Special Use Permit (SUP) to develop a high density, 88-unit development. At the time, a portion of the property was included in FEMA’s “AE” Special Flood Hazard Area — an area prone to inland flooding.
FEMA’s new maps show a portion of that property will now in the “floodway.” Still technically in the AE Zone, the floodway carries the highest velocity riverine flooding.
Developing properties located in the floodway can be costly, according to Randy Mundt, outreach coordinator for North Carolina Floodplain Mapping Program. Mundt said the federal government requires higher standards for developing in this area.
“You can develop in the floodway but you have to demonstrate that that development will not increase water surface elevations beyond what the model and map already shows,” Mundt.
In a letter requesting the rezoning, the North College property owners said a storage facility would be more suitable. Owners based their request on a market study and updated flood maps.
Residential value
While new zoning designations could change developer’s land use decisions, they may not impact overall residential property values.
“On the residential side, we don’t see any change coming,” Fred Gainey, president of Cape Fear REALTORS, said.
Though owners may see a lower or higher monthly premium, Gainey said FEMA’s new maps don’t impact overall property value.
“We have a huge demand and a low supply,” he said. “We don’t see it impacting the current market.”
For cash buyers, Gainey said flood maps are even less relevant. “Where the flood zone comes in is where that buyer comes in to get a mortgage,” he said.
The cost of flood map zoning may be felt at the inner workings of a real estate deal, rather than at the ticket price.
If a homeowner has a mortgage from a federally regulated lender, they are required to purchase flood insurance. Insurance costs are incurred via monthly premiums. In southeastern, North Carolina, many of these changes have already begun.
“There’s going to be that one or two that’s going to buy in the VE zone to where the flood insurance might keep people from being qualified,” he said.
Send tips and comments to Johanna Ferebee at johanna@localvoicemedia.com
