High Insurance Rates Could Force Middle Class Out of NJ Shore [AUDIO]
As many Jersey Shore residents begin to rebuild after the damage caused by Superstorm Sandy, they will soon be paying a lot more for flood insurance.
With the National Flood Insurance Program severely under-funded because of so many strong storms in recent years, flood insurance premiums will begin to rise 20 to 25 percent a year – starting next month.
Rutgers economist James Hughes says many middle class, and lower-middle class households have acquired homes down the shore many, many years ago, because believe it or not, 30-40 years ago places were quite cheap on the Jersey shore, but “with a flood insurance program that is in a deep financial hole, they may not be able to afford the new higher flood insurance rates…we’re going to have a number of middle-class and below households squeezed out of the shore market.”
He says “we’ll probably see more and more, only the more affluent being able to afford a lot of those shore properties…and looking down the road, even some of the more affluent may not want to take the risks of shore homeownership…we really do have an uncertain future along the shore…in order for shore residents to rebuild, and then deal with skyrocketing flood insurance, they’re going to have to be able to borrow money, they’re going to have to have equity to bridge the gap so it’s going to be a very perilous fiscal situation for many households…the more modest dwellings are going to be an artifact of the past – and when you do rebuild, they’re going to have to be rebuilt in a different fashion – a much more expensive fashion.”
Hughes adds “it’s going to be a different shore in many places…we’re going to see a much less diverse shore, probably a more affluent shore.”