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This proposed rule would revise HUD’s regulations governing floodplain management and the protection of wetlands to implement the Federal Flood Risk Management Standard (FFRMS), in accordance with Executive Order 13690 (Establishing a Federal Flood Risk Management Standard and a Process for Further Soliciting and Considering Stakeholder Input), improve the resilience of HUD-assisted or financed projects to the effects of climate change and natural disasters, and provide for greater flexibility in the use of HUD assistance in floodways under certain circumstances. This rule would also revise HUD’s floodplain and wetland regulations to streamline them, improve overall clarity, and modernize standards.

Statement of Need:

The rule is part of HUD's commitment under HUD’s 2021 Climate Action Plan. HUD committed to completing rulemaking to update 24 CFR part 55 of its regulations and implement FFRMS as a key component of its plan to increase climate resilience and climate justice across the Department, noting that low-income families and communities of color are disproportionately impacted by climate change. Additionally, HUD notes that affordable housing is increasingly at risk from both extreme weather events and sea-level rise, and that coastal communities are especially at risk.

HUD’s existing regulations currently rely on Flood Insurance Rate Maps, which are critical resources when assessing flood risk, but are not intended to reflect changes in future flood risk influenced by a changing climate. This rule would ensure that HUD projects are designed with a more complete picture of a proposed project site’s flood risk over time. Building to the standards discussed in this proposed rule would increase resiliency, reduce the risk of flood loss, minimize the impact of floods on human safety, health, and welfare, and promote sound, sustainable, long-term planning informed by a more accurate evaluation of risk that takes into account possible sea level rise and increased development associated with population growth.

Summary of the Legal Basis:

These regulatory revisions would implement the Federal Flood Risk Management Standard (FFRMS), in accordance with Executive Order (E.O.) 13690 (Establishing a Federal Flood Risk Management Standard and a Process for Further Soliciting and Considering Stakeholder Input) (2015).

Alternatives:

An alternative to promulgating this rule would be to maintain HUD’s existing regulations governing floodplain management and the protection of wetlands. However, doing so would ignore the threats that increasing flood risks pose to life and taxpayer-funded property. Additionally, HUD would not be in compliance with Executive Order 13960 and implementing guidance if HUD did not revise its regulations. Other alternatives include higher additional elevation standards for HUD projects without using a CISA approach. HUD prefers the CISA approach because it provides a forward-looking assessment of flood risk based on likely or potential climate change scenarios, regional climate factors, and an advanced scientific understanding of these effects.

Anticipated Costs and Benefits:

Executive Order 12866, as amended, requires the agency to provide its best estimate of the combined aggregate costs and benefits of all regulations included in the agency's Regulatory Plan that will be pursued in FY 2022. HUD expects that the neither the total economic costs nor the total efficiency gains will exceed $100 million. Elevating HUD-assisted structures located in and around the FFRMS floodplain will lessen damage caused by flooding and avoid relocation costs to tenants associated with temporary moves when HUD-assisted structures sustain flood damage and are temporarily uninhabitable. These benefits, which are realized throughout the life of HUD-assisted structures, are offset by the one-time increase in construction costs, borne only at the time of construction.

Risks:

This rule could increase construction costs for HUD projects where it leads to additional elevation requirements, thereby increasing the cost of constructing affordable housing. However, these costs are offset by the decreased damage caused by flooding a project will endure throughout its lifetime, and the avoidance of relocation costs when HUD-assisted structures sustain flood damage.