The Houston City Council is hoping to prevent a repeat of the damage the city’s infrastructure suffered in the wake of Hurricane Harvey, and the changes to municipal codes could affect some real estate investors. The council recently passed a new ordinance it designated as “designed to retool and strengthen building codes for areas within the city’s floodplain.”

A floodplain is traditionally defined as the low-lying ground next to a body of water that is often subject to flooding, but municipal codes define floodplains in terms of areas likely to flood in the event of a “100-year storm, which has a 1 percent chance of occurring in any given year. Houston is expanding codes and regulations to cover buildings in areas in the 500-years floodplain, which has an 0.2 percent chance of flooding in any given year.

The ordinance will require new buildings in the 500-year floodplain to be elevated two feet above the floodplain and have flood insurance.

Although some city council members say the new ordinance is “overreaching” because of the extremely low likelihood that homes in that area will flood, the measure passed with nine in favor and seven against. The ordinance will require new buildings in the 500-year floodplain to be elevated two feet above the floodplain (previously, the requirement was one foot) and have flood insurance. Notably for investors operating in the area, this will also apply to properties that are expanding via rehab or renovation by 33 percent of more.

Critics of the plan say that there is no reason to regulate an event that is unlikely to recur and, even if it does, unlikely to cause damage to homes meeting current 500-year requirements. They argue there is not enough data to support the change at the present time. “We’ve only looked at 5,000 houses in the 500-year floodplain,” complained one council member. “There’s not enough data.” Supporters of the plan argue that doing nothing will leave the public vulnerable if there is another major storm.

Houston investor Brian Spitz, founder of Big State Home Buyers, believes the floodplain ordinance is well designed. “This new ordinance is a positive change for the Houston market because it relates to new construction, rather than requiring old buildings to be retrofitted to meet the new requirements,” he said. “While this may increase upfront construction costs, consumers purchasing new homes, and investors buying properties within a 500-year floodplain to remodel, will be more confident in their decisions. At the end of the day, the Houston market is nervous about future flooding, and this new ordinance will directly combat those fears.”

 

Categories | Article | Market & Trends
  • Carole VanSickle Ellis

    Carole VanSickle Ellis serves as the news editor and COO of Self-Directed Investor (SDI) Society, a membership organization dedicated to the needs of self-directed investors interested in alternative investment vehicles, including real estate. Learn more at SelfDirected.org or reach Carole directly by emailing Carole@selfdirected.org.

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