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Ray Duckler: Digging a hole that’s far too deep

Pamela Smith (right) and her girlfriend, Beth Dooley, bought a house they could afford and planned to fix up. But after a year of living there, they said their flood insurance premium jumped from $2,000 per year to $4,600 based on elevation and that their home has a basement.
(JOHN TULLY / Monitor staff)

Pamela Smith (right) and her girlfriend, Beth Dooley, bought a house they could afford and planned to fix up. But after a year of living there, they said their flood insurance premium jumped from $2,000 per year to $4,600 based on elevation and that their home has a basement. (JOHN TULLY / Monitor staff)

Pamela Smith, a first-time homeowner, had it all figured out.

She waited until she had money in the bank, until she could find a house within her tight budget, until she knew what needed to be fixed and how much the repairs would cost.

She and her girlfriend, Beth Dooley, moved into their home in Hillsboro 21 months ago and began their new life together.

Too bad an increase in their flood insurance hit them like a wall of water, forcing them to reassess their future.

“I can’t afford it,” Smith said recently. “I don’t have that money.”

What she does have is a new annual premium, $4,600, up from $2,000 when she closed the deal in December 2011. If nothing changes, Smith and Dooley will be forced to move from a house that cost them $62,000.

The problem? First, Smith failed to inquire about the potential increase in future rates for her flood insurance policy, administered by the Federal Emergency Management Agency and, FEMA says, guided by a manual that evolves as the agency learns more about flood risks and potential damage.

Next, Smith’s house was

built in 1989, 10 years after Hillsboro passed an ordinance forbidding the building of basements in the floodplain. Nonetheless, Smith’s house, in the floodplain, was built with a basement, its floor 7 feet below ground.

And that, eventually, meant a huge insurance payment.

Why the basement was built is anyone’s guess. Smith and Dooley knew that their house was built in a risky section of town, the floodplain, which is why they agreed to pay $2,000 annually for insurance.

And that was okay.

But, they say, no one ever told them that houses built in the floodplain after 1979 were not supposed to have basements.

Their options? Pay the extra $2,600 for insurance, or fill in their basement with concrete or gravel, making the first floor, which is in compliance with flood regulations, the lowest level in the house.

“We should not have bought this house. Period,” said Dooley, a FedEx courier.

“As you can see, we’re trying,” said Smith, a case manager. “We were informed we were in a flood zone, but being in a flood zone and having to pay $2,000 is a lot different than being told we’re in a flood zone and our house is out of compliance.”

The couple had planned and planned and planned some more, uprooting their lives so they could buy a house and live happily ever after. Dooley lived in Peabody, Mass., and received a transfer to Manchester. She moved in with Smith in Hooksett. She sold her truck.

“We gave up everything, made one sacrifice after another,” Dooley said. “The money we’ve spent, we’re just going to throw it out the window and walk away? Unreal.”

Since receiving their insurance renewal notice last month, and with it the bad news about the increase in their rate, Smith and Dooley have done their homework and contacted every official they could think of, looking for a solution or a sympathetic ear.

They were rejected for financial help, according to an email from Elizabeth Peck of the state’s Flood Mitigation Assistance program that, ironically, they weren’t candidates because their home had yet to suffer any flood damage.

State and regional officials for FEMA said that flood premiums are re-established each year, based on a constant flow of information, such as how particular structures hold up against storms and flooding of varying degrees.

Bob Desaulniers, the FEMA insurance specialist for Region I, based in Boston, investigated the matter, looking for a typo, a misreading of the guidelines, something that could be used to push Smith’s rate back to where it had been.

He said he found nothing.

“(Smith) definitely got a big jump in premium,” Desaulniers said, “but anybody who had the same type of characteristics as her building would have gotten a similar jump in premium.”

When asked what Smith might have done to protect herself, Desaulniers said, “Before she bought the house, I guess if she had asked the right questions of her agent or anybody. I’ve run into those who were quoted a premium of $2,000, and then they asked how would they know if that’s what it would be year after year. They didn’t make an assumption that it would always stay the same. In her case, ouch.”

Which brings us to the core question: Why was the basement built in the first place, nearly 25 years ago, against town regulations?

Smith and Dooley hit a dead end from the town itself, which said it has nothing to do with setting flood insurance rates. Town Administrator Laura Buono expanded in an email to Smith, dated Oct. 31, saying Hillsboro didn’t employ a building inspector until 2006.

“I’m sure you reviewed the property file prior to purchasing the home and would have possibly seen the original plans documenting that there was to be no basement,” Buono wrote in the email. “Even if you did not review the property file, it appears you were aware that the home was in a floodplain and required flood insurance since you have been paying the premium since you purchased the property.”

The file, which includes the permit application and certificate of compliance, does, indeed, state, “2 bedroom cottage no basement.”

But the basement is there; I saw it.

“How come they allowed it to be built?” Smith asked. “They say in their plans for the house that it didn’t have a basement, but I didn’t just build it. They say it didn’t come with the plan when someone came to build the house, and they never inspected it to make sure.”

For now, the couple continues to work for modest pay, and Smith is taking graduate classes at night. They’ve contacted Sen. Jeanne Shaheen’s office seeking help but haven’t heard back.

Their words reflect broken spirits.

“I’m ready to give up on stuff,” Smith said. “I don’t know what else to do.”

(Ray Duckler can be reached at 369-3304 or rduckler @cmonitor.com or on Twitter @rayduckler.)

Thank you for any one who recognized that I truly did the best I could being a first time home buyer and relying on the resources that were available to me at the time of purchase. I contacted my legislature because I disagreed with the legislation that was passed that caused this significant increase. There was also information of a program that would help one eleviate flood risk by making improvements though I am not eligible because my house has never flooded. Just doesn't make much sense that once my house accrues a certain amount of flood damage I would be eligible for a loan to make improvements but not available if you have a high flood rate but haven't accrued damage. James, it looks like you need to reread the article and pay attention to the details.

I feel for this couple. This also seems to be an issue with zoning as there is in every town. I can recall the hassle of porch railing height when I built. It was off by 6" so before we were allows to move in we had to raise them 6" which left us with no view when you sit in a chair on the porch. A home less than two miles from us was built at the same time without any railings at all. $40 per week for flood insurance increase seems rather high to me.

Your low information comment brings someone else to mind as well as the attitude. No need for being insulting here. On new construction, rule compliance is much easier but not without challenges especially in small towns. Her mistake was relying on a Realtor and thinking she was safe. It is unfortunate they have experienced these problems but sometimes the "dream" gets in the way. In the case of short sales or foreclosures you have to realize you are on your own and the sellers just want to unload it. As far as your stocks don't expect me to generate a tear, stock is a gamble but home ownership shouldn't be.

A lot of the questions they "should have asked" are things I would never think of in a million years.

Actually I don't want government assistance and didn't ask for any. I've never had any assistance in my life actually. So don't assume you know anything about me. I bought this house from working hard on my own. This was my first house. If you actually read the article you would have learned that the insurance was within my range and then went up by over 100%. This was due to biggert waters 2012. Don't GUESS how the house was bought, because you would be wrong. Clearly you have too much time on your hands speculating on things you know nothing about, however I have been really busy working 50 hours per week for a meager salary in addition to attending graduate school. Don't assume you know about my situation or my level of education.

In the article Duckler claims you contacted NH's senior senator for help. Are you saying that is not seeking help from the government or was Duckler incorrect in the article? I made no reference to education. I am very suspect of there being a realtor involved your purchase of the property, if there were you would be seeking address in the court system

Touche...

What is your problem, James? Are you so eager to pass judgment on Pamela and Beth that you have to resort to creating your own set of facts? You should be ashamed of yourself.

Apparently you've never been a first time house buyer. Or young.

This is happening all over Florida with the expansion of the floodplain zones. Properties miles from the ocean are being included. Seniors and low income people are unable to afford their insurance.

I don't even own property on water! I make less than 35000 a year. I did what I thought was my homework. Things were within my means. The house was affordable. The payment was affordable. I would be able to do the repairs. I didn't get an adjustable rate, I made sure it was fixed. I was well within my means. I didn't know the house was out of compliance with the basement (was not constructed per plan and in violation of local building ordinances) when I bought it actually. I didn't know about that until after the fact. I didn't know I was supposed to look at those things. I was a consumer, not a real estate expert nor a lawyer.

Pamela, You did your homework. There's a certain unfortunate mentality on the internet that would rip on Christ himself, Mother Theresa, Buddha. It's a way of not dealing with the reality that life is fragile and bad things really can happen to good people. If I can blame you for what happened to you, then I can tell myself I can ward off any bad things. Through super powers, apparently. You're okay, you did your best. James is basically blaming you for lack of ESP. Welcome to the human race, girlfriend. Hang in.

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