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Rule2024-06246

Floodplain Management and Protection of Wetlands; Minimum Property Standards for Flood Hazard Exposure; Building to the Federal Flood Risk Management Standard

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Published

April 23, 2024

Effective

May 23, 2024

Issuing agencies

Housing and Urban Development Department

Abstract

This final rule revises HUD's regulations governing floodplain management and the protection of wetlands to implement the Federal Flood Risk Management Standard (FFRMS) in accordance with the Executive Order titled "Establishing a Federal Flood Risk Management Standard and a Process for Further Soliciting and Considering Stakeholder Input." These revisions to HUD's regulations will 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. Among other revisions, this rule provides a process for determining the extent of the FFRMS floodplain, with a preference for a climate-informed science approach (CISA) to making this determination. The rule also revises HUD's floodplain and wetland regulations to streamline, improve overall clarity, and modernize standards. Also, this rule revises HUD's Minimum Property Standards for one-to-four-unit housing under HUD's mortgage insurance and low-rent public housing programs to require that the lowest floor in newly constructed structures located within the 1-percent-annual-chance (100-year) floodplain be built at least 2 feet above the base flood elevation (BFE) as determined by best available information. The rule also revises a categorical exclusion when HUD performs environmental reviews and updates various HUD environmental regulations to permit online posting of public notices.

Full Text

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[Federal Register Volume 89, Number 79 (Tuesday, April 23, 2024)]
[Rules and Regulations]
[Pages 30850-30914]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-06246]

[[Page 30849]]

Vol. 89

Tuesday,

No. 79

April 23, 2024

Part III

Department of Housing and Urban Development

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24 CFR Parts 50, 55, 58, et al.

Floodplain Management and Protection of Wetlands; Minimum Property
Standards for Flood Hazard Exposure; Building to the Federal Flood Risk
Management Standard; Final Rule

Federal Register / Vol. 89 , No. 79 / Tuesday, April 23, 2024 / Rules
and Regulations

[[Page 30850]]

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Parts 50, 55, 58, and 200

[Docket No. FR-6272-F-02]
RIN 2506-AC54

Floodplain Management and Protection of Wetlands; Minimum
Property Standards for Flood Hazard Exposure; Building to the Federal
Flood Risk Management Standard

AGENCY: Office of the Secretary, U.S. Department of Housing and Urban
Development (HUD).

ACTION: Final rule.

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SUMMARY: This final rule revises HUD's regulations governing floodplain
management and the protection of wetlands to implement the Federal
Flood Risk Management Standard (FFRMS) in accordance with the Executive
Order titled ``Establishing a Federal Flood Risk Management Standard
and a Process for Further Soliciting and Considering Stakeholder
Input.'' These revisions to HUD's regulations will 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. Among other revisions, this rule provides a process for
determining the extent of the FFRMS floodplain, with a preference for a
climate-informed science approach (CISA) to making this determination.
The rule also revises HUD's floodplain and wetland regulations to
streamline, improve overall clarity, and modernize standards. Also,
this rule revises HUD's Minimum Property Standards for one-to-four-unit
housing under HUD's mortgage insurance and low-rent public housing
programs to require that the lowest floor in newly constructed
structures located within the 1-percent-annual-chance (100-year)
floodplain be built at least 2 feet above the base flood elevation
(BFE) as determined by best available information. The rule also
revises a categorical exclusion when HUD performs environmental reviews
and updates various HUD environmental regulations to permit online
posting of public notices.

DATES:
Effective Date: May 23, 2024.
Compliance Date: Compliance with this final rule is required no
later than June 24, 2024, except: compliance with this final rule's
amendments to 24 CFR part 200 is required for new construction where
building permit applications are submitted on or after January 1, 2025;
and compliance with this final rule's amendments to 24 CFR part 55 is
required no later than January 1, 2025 for the following programs: (1)
Programs subject to chapter 9 of the Federal Housing Administration's
(FHA) Multifamily Accelerated Processing (MAP) Guide (4430.G):
Multifamily FHA, Section 202 and 811 capital advance grants, transfers
under Section 8(bb) of the United States Housing Act and Section 209 of
HUD's annual appropriations (or subsequent provisions), Section 8
Renewals with Capital Repairs, Rental Assistance Demonstration (RAD)
conversions to Project-Based Rental Assistance (PBRA), and the Green
and Resilient Retrofit Program; and (2) The other mortgage insurance
programs subject to part 55: FHA Healthcare and FHA Risk Share.

FOR FURTHER INFORMATION CONTACT: Kristin L. Fontenot, Director, Office
of Environment and Energy, Office of Community Planning and
Development, Department of Housing and Urban Development, 451 7th
Street SW, Room 7282, Washington, DC 20410-8000. For inquiry by phone
or email, contact Lauren Hayes Knutson, Director, Environmental
Planning Division, Office of Environment and Energy, Office of
Community Planning and Development, at 202-402-4270 (this is not a
toll-free number) or email to: <a href="/cdn-cgi/l/email-protection#baffd4ccd3c8d5d4d7dfd4cedbd6ead6dbd4d4d3d4ddfed3ccd3c9d3d5d4fad2cfde94ddd5cc"><span class="__cf_email__" data-cfemail="5c19322a352e3332313932283d300c303d323235323b18352a352f3533321c342938723b332a">[email&#160;protected]</span></a>.
For questions regarding the Minimum Property Standards, contact Julie
Shaffer, Associate Deputy Assistant Secretary, Office of Single Family
Housing, 215-861-7216. HUD welcomes and is prepared to receive calls
from individuals who are deaf or hard of hearing, as well as
individuals with speech or communication disabilities. To learn more
about how to make an accessible telephone call, please visit <a href="https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs">https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs</a>.

SUPPLEMENTARY INFORMATION:

I. Background

On March 24, 2023, HUD published the ``Floodplain Management and
Protection of Wetlands; Minimum Property Standards for Flood Hazard
Exposure; Building to the Federal Flood Risk Management Standard''
proposed rule (the ``proposed rule'').\1\ In the proposed rule, HUD
explained that increased and increasing frequency of flooding and
weather and climate disasters make it necessary for HUD to ensure it
approves Federal investments wisely to minimize losses, particularly
following repeated flooding events. The revisions to HUD's regulations
implemented through this final rule will 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.
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\1\ 88 FR 17755. On May 11, 2023, HUD extended the original 60-
day comment period provided in the proposed rule by an additional 14
days. See 88 FR 30267.
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HUD has broad general rulemaking authority under 42 U.S.C. 3535 to
``make such rules and regulations as may be necessary to carry out [the
Secretary's] functions, powers and duties'' in order to implement its
statutory mission, which is to provide assistance for housing to
promote ``the general welfare and security of the Nation and the health
and living standards of [its] people.'' \2\ Under the National Housing
Act, HUD has discretion to set terms upon which it will insure
mortgages. 12 U.S.C. 1701 et seq. HUD also has authority and
responsibility under the National Environmental Policy Act of 1969
(NEPA) (42 U.S.C. 4321 et seq.):
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\2\ 42 U.S.C. 3531.
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<bullet> to use all practicable means;
<bullet> to improve and coordinate Federal plans, functions,
programs, and resources to the end that the Nation may:
[cir] fulfill the responsibilities of each generation as trustee of
the environment for succeeding generations;
[cir] assure for all Americans safe, healthful, productive, and
esthetically and culturally pleasing surroundings;
[cir] attain the widest range of beneficial uses of the environment
without degradation, risk to health or safety, or other undesirable and
unintended consequences.

42 U.S.C. 4331(b).

NEPA also requires all Federal agencies to ``utilize a systematic,
interdisciplinary approach which will ensure the integrated use of the
natural and social sciences and the environmental design arts in
planning and in decision making which may have an impact on man's
environment.'' 42 U.S.C. 4332(2)(A). Each year, HUD provides States,
local governments, and housing providers with billions of dollars in
Federal financial assistance, appropriated and authorized by Congress.
By taking the actions it does in this final rule, HUD protects Federal
investments, preserves the environment for future generations, and
promotes the health, safety, and general welfare of individuals. As
described in the

[[Page 30851]]

proposed rule, in response to the threats that increasing flood risks
pose to life and taxpayer funded property, on January 30, 2015,
President Obama signed Executive Order (E.O.) 13690, Establishing a
Federal Flood Risk Management Standard and a Process for Further
Soliciting and Considering Stakeholder Input.\3\ E.O. 13690 amended
E.O. 11988, Floodplain Management, which was originally issued in
furtherance of the National Flood Insurance Act of 1968, as amended (42
U.S.C. 4001 et seq.); the Flood Disaster Protection Act of 1973, as
amended (Pub. L. 93-234, 87 Stat. 975); and NEPA (42 U.S.C. 4321 et
seq.).
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\3\ 80 FR 6425 (Feb. 2, 2015). E.O. 13690 was revoked by E.O.
13807, Establishing Discipline and Accountability in the
Environmental Review and Permitting Process for Infrastructure
Projects (Aug. 15, 2017); however, E.O. 13690 was reinstated by E.O.
14030, Climate-Related Financial Risk (May 20, 2021), published at
86 FR 27967.
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Significantly for the purposes of this rulemaking, E.O. 13690
revised section 6(c) of E.O. 11988 to provide new approaches to
establish the floodplain. E.O. 13690 provided, however, that prior to
any actions implementing E.O. 13690, additional input from stakeholders
be solicited and considered. Consistent with this direction, the
Federal Emergency Management Agency (FEMA), as Chair of the Mitigation
Framework Leadership Group (MitFLG),\4\ published a notice in the
Federal Register seeking public comment on the proposed ``Revised
Guidelines for Implementing Executive Order 11988, Floodplain
Management'' to provide guidance to agencies on the implementation of
E.O. 13690 and 11988.\5\ In addition, MitFLG held nine public listening
sessions across the country that were attended by over 700 participants
from State and local governments and other stakeholder organizations to
discuss the Revised Guidelines for Implementing Executive Order 11988,
Floodplain Management.\6\ MitFLG considered stakeholder input and
provided recommendations to the U.S. Water Resources Council (WRC).\7\
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\4\ MitFLG is a senior level group formed in 2013 to coordinate
mitigation efforts across the Federal Government and to assess the
effectiveness of mitigation capabilities as they are developed and
deployed across the Nation. The MitFLG includes relevant local,
State, Tribal, and Federal organizations. More information about
MitFLG can be found at <a href="https://www.fema.gov/emergency-managers/national-preparedness/frameworks/mitigation/mitflg">https://www.fema.gov/emergency-managers/national-preparedness/frameworks/mitigation/mitflg</a>.
\5\ 80 FR 6530 (Feb. 5, 2015). The ``Revised Guidelines for
Implementing Executive Order 11988, Floodplain Management'' is
included as a supporting document with the docket associated with 80
FR 6530.
\6\ Specific information on the listening sessions can be found
in the notices on the docket at <a href="https://www.regulations.gov/docket/FEMA-2015-0006/document?documentTypes=Notice">https://www.regulations.gov/docket/FEMA-2015-0006/document?documentTypes=Notice</a>. Transcripts of those
sessions are available on the docket at <a href="https://www.regulations.gov/docket/FEMA-2015-0006/document?documentTypes=Supporting%20%26%20Related%20Material">https://www.regulations.gov/docket/FEMA-2015-0006/document?documentTypes=Supporting%20%26%20Related%20Material</a>.
\7\ The WRC is a statutory body tasked to maintain a continuing
study and prepare an assessment of the adequacy of supplies of water
necessary to meet the water requirements in each water resource
region in the United States and the national interest therein. 42
U.S.C. 1962a. The WRC is a means for the coordination of the water
and related land resources policies and programs of several Federal
agencies. The WRC is composed of the Secretary of the Interior, the
Secretary of Agriculture, the Secretary of the Army, the Secretary
of Commerce, the Secretary of Housing and Urban Development, the
Secretary of Transportation, the Administrator of the Environmental
Protection Agency, and the Secretary of Energy.
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On October 8, 2015, the WRC issued the updated ``Guidelines for
Implementing Executive Order 11988, Floodplain Management, and
Executive Order 13690, Establishing a Federal Flood Risk Management
Standard and a Process for Further Soliciting and Considering
Stakeholder Input'' (the ``Guidelines'').\8\ Although the Guidelines
describe various approaches for determining the higher vertical flood
elevation and corresponding horizontal floodplain for federally funded
projects, the Guidelines indicate that it is not meant to be an
elevation standard but rather a resilience standard. Further, the
Guidelines provide that all future actions where Federal funds are used
for new construction, substantial improvement,\9\ or to address
substantial damage \10\ meet the level of resilience established by the
Guidelines. In implementing the Guidelines and establishing the FFRMS,
Federal agencies were to select among the following three approaches
for establishing the flood elevation and hazard area in siting, design,
and construction:
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\8\ The Guidelines are available at <a href="https://www.fema.gov/sites/default/files/documents/fema_implementing-guidelines-EO11988-13690_10082015.pdf">https://www.fema.gov/sites/default/files/documents/fema_implementing-guidelines-EO11988-13690_10082015.pdf</a>. HUD notes that the WRC is not currently active.
\9\ HUD defines substantial improvement in 24 CFR 55.2(b). This
final rule does not substantively change this definition except by
moving it from its current location in Sec. 55.2(b)(10) to Sec.
55.2(b)(12) to reflect other changes to that section and by
clarifying that the term ``structure'' includes a manufactured
housing unit.
\10\ Substantial damage is defined in FEMA regulations at 44 CFR
59.1 as ``damage of any origin sustained by a structure whereby the
cost of restoring the structure to its before damaged condition
would equal or exceed 50 percent of the market value of the
structure before the damage occurred.'' For more information on
substantial improvement and substantial damage, see FEMA,
Substantial Improvement/Substantial Damage Desk Reference FEMA P-758
(May 2010), available at <a href="https://www.fema.gov/sites/default/files/2020-08/fema_p_758_complete_r3_0.pdf">https://www.fema.gov/sites/default/files/2020-08/fema_p_758_complete_r3_0.pdf</a>.
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<bullet> Climate-Informed Science Approach (CISA): The elevation
and flood hazard area that result from using a climate-informed science
approach that uses the best-available, actionable, hydrologic and
hydraulic data;
<bullet> Freeboard \11\ Value Approach (FVA): The elevation and
flood hazard area that result from using the freeboard value reached by
adding an additional 2 feet to the base flood elevation (the 100-year,
or 1-percent-annual-chance flood elevation) for non-critical actions
and by adding an additional 3 feet to the base flood elevation for
critical actions, or
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\11\ Freeboard is defined by FEMA as ``a factor of safety
usually expressed in feet above a flood level for purposes of
floodplain management. `Freeboard' tends to compensate for the many
unknown factors that could contribute to flood heights greater than
the height calculated for a selected size flood and floodway
conditions, such as wave action, bridge openings, and the
hydrological effect of urbanization of the watershed.'' 44 CFR 59.1.
See also FEMA, National Flood Insurance Program Terminology Index,
available at <a href="http://www.fema.gov/freeboard">http://www.fema.gov/freeboard</a>.
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<bullet> 0.2-Percent-Annual-Chance (500-Year) Flood Approach: The
elevation and flood hazard area that result from using the 0.2-percent-
annual-chance flood approach (500-year flood elevation).
The FVA and 0.2-percent-annual-chance flood approach result in
higher elevations than the base flood elevation with correspondingly
larger horizontal floodplain areas. CISA will generally have a similar
result, with the exception that agencies using CISA may find the
resulting elevation to be equal to or lower than the current elevation
in some areas due to the nature of the specific climate change
processes and physical factors affecting flood risk at the project
site. However, as a matter of policy established in the Guidelines,
CISA should only be used if the resulting flood elevation is at least
equal to or higher, depending on the criticality of the action, than
current base flood elevation.
In response to comments received on the Guidelines, MitFLG included
an appendix that explained CISA. Appendix H of the Guidelines \12\
explains that CISA treats the future as potentially non-stationary;
considers local conditions as well as global change; accommodates other
factors beyond those that are climate-related; and assists in bounding
the decision space by considering plausible future conditions
appropriate to a given decision. CISA uses existing sound science and
engineering methods as have historically been used to implement E.O.
11988 but supplemented with best available

[[Page 30852]]

climate-related scientific information when appropriate. CISA is
consistent with the climate science and related information found in
the latest National Climate Assessment report or other best-available,
actionable science. CISA combines information from different
disciplines (like atmospheric sciences, coastal sciences, oceanographic
sciences) in addition to traditional science and engineering
approaches. CISA should include impacts from projected land cover and
land use changes, long-term coastal and/or riverine erosion, and
vertical land movement expected over the lifecycle of the action.
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\12\ The appendices to the Guidelines are available at <a href="https://www.fema.gov/sites/default/files/documents/fema_IGA-appendices-a-h_10082015.pdf">https://www.fema.gov/sites/default/files/documents/fema_IGA-appendices-a-h_10082015.pdf</a>.
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As described in the Guidelines, CISA relies on best available and
actionable science. Best available means data and science that is
transparent, technically credible, usable, legitimate, and flexible.
Actionable science consists of theories, data, analyses, models,
projects, scenarios, and tools that are relevant to the decision under
consideration; reliable in terms of its scientific or engineering basis
and appropriate level of peer review; understandable to those making
the decision; supportive of decisions across wide spatial, temporal,
and organization ranges; and co-produced by scientists, practitioners,
and decision-makers. Appendix H indicates that different approaches are
appropriate for coastal and riverine flooding because the directional
change of local sea level plus storm surge is generally known for
coastal flood risk but, for riverine, it is difficult to determine the
direction of changes in precipitation and resulting flood elevations.
As a result, the MitFLG recommended that coastal flood risks agencies
take into account mean sea level rise scenarios that are adjusted to
reflect local conditions to identify CISA. The MitFLG and Appendix H to
the Guidelines do not provide a similar hydrologic standard for CISA
for riverine flood risks because of the limitations on best-available
and actionable science.
In 2023, Federal agencies participating in the White House Flood
Resilience Interagency Working Group \13\ reviewed the science behind
CISA and concluded that incorporating the latest projections of sea
level rise in evaluation of future coastal flood risk continues to be
best practice and actionable science, whereas the science surrounding
the climate change impacts to precipitation and inland flooding is not
mature enough to establish one CISA standard for riverine flooding.\14\
In August 2023, the White House Flood Resilience Interagency Working
Group released a job aid to assist agencies with their responsibility
to identify the floodplain using the three approaches.\15\
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\13\ More information about the White House Flood Resilience
Interagency Working Group can be found at <a href="https://www.whitehouse.gov/ceq/news-updates/2021/08/27/readout-of-the-first-white-house-flood-resilience-interagency-working-group-meeting-on-implementation-of-the-federal-flood-risk-management-standard/">https://www.whitehouse.gov/ceq/news-updates/2021/08/27/readout-of-the-first-white-house-flood-resilience-interagency-working-group-meeting-on-implementation-of-the-federal-flood-risk-management-standard/</a>.
\14\ See Federal Flood Risk Management Standard Climate-Informed
Science Approach (CISA) State of the Science Report (March 2023),
<a href="https://www.whitehouse.gov/wp-content/uploads/2023/03/Federal-Flood-Risk-Management-Standard-Climate-Informed-Science-Approach-CISA-State-of-the-Science-Report.pdf">https://www.whitehouse.gov/wp-content/uploads/2023/03/Federal-Flood-Risk-Management-Standard-Climate-Informed-Science-Approach-CISA-State-of-the-Science-Report.pdf</a>.
\15\ See FFRMS Floodplain Determination Job Aid (August 2023),
<a href="https://www.fema.gov/sites/default/files/documents/fema_ffrms-floodplain-determination-job-aid.pdf">https://www.fema.gov/sites/default/files/documents/fema_ffrms-floodplain-determination-job-aid.pdf</a>.
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E.O. 11988 directs Federal agencies to avoid, to the extent
possible, the long- and short-term adverse impacts associated with the
occupancy and modification of floodplains and to avoid direct and
indirect support of floodplain development wherever there is a
practicable alternative. Floodplains are found both in coastal flood
areas, where rising tides and storm surge are often responsible for
flooding, and in riverine flood areas where moving water bodies may
overrun their banks due to heavy rains or snow melt. E.O. 11988 directs
each agency to evaluate the potential effects of any actions it may
take in a floodplain; to ensure that agency planning programs and
budget requests reflect consideration of flood hazards and floodplain
management; and to identify the floodplain area.
E.O. 11988, as amended, requires agencies to take a scientific
approach to determine if a proposed action is in or affects a
floodplain. The result of this analysis is often most easily conveyed
via a map, making floodplain maps ubiquitous with the process of
identifying the floodplain, though, in process, they are separate. The
identification of the floodplain is the analysis the agencies have been
tasked with carrying out under E.O. 11988 and maps are the visual
representation of that analysis. Because flood risk can change over
time, FEMA and the National Flood Insurance Program (NFIP) program
continually revise Flood Insurance Rate Maps (FIRMs), advisory base
flood elevations and preliminary floodplain maps and studies to
incorporate new information and reflect the current understanding of
flood risk. E.O. 13690 amended E.O. 11988 to direct agencies to update
the floodplain using one (or a combination) of the three approaches
listed above, which are incorporated in the FFRMS.
Communities across the Nation have proactively strengthened their
local floodplain management codes and standards to ensure that
buildings and infrastructure are resilient to flood risk. By
implementing the FFRMS, HUD's standards will better align with these
actions and better protect against future flood risk, considering
climate informed science, where available. At the same time, HUD
recognizes that the need to make structures resilient also requires a
flexible approach to adapt to the needs of the Federal agency, local
community, and the circumstances surrounding each project or action.

II. This Final Rule

In its 2021 Climate Action Plan,\16\ HUD committed to completing
rulemaking to update 24 CFR part 55 and implement FFRMS as a key
component of HUD's plan to increase climate resilience and climate
justice across the Department, noting that underserved communities are
disproportionately impacted by climate change.\17\ Development of
equitable strategies to protect low- to moderate-income persons and
businesses serving communities disproportionately impacted by climate
change is at the core of HUD's mission to create strong, sustainable,
inclusive communities. This final rule will 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.
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\16\ U.S. Department of Housing and Urban Development, Climate
Action Plan (Nov. 2021), available at <a href="https://www.hud.gov/climate">https://www.hud.gov/climate</a>.
\17\ See also Marino, E.K., K. Maxwell, E. Eisenhauer, A.
Zycherman, C. Callison, E. Fussell, M.D. Hendricks, F.H. Jacobs, A.
Jerolleman, A.K. Jorgenson, E.M. Markowitz, S.T. Marquart-Pyatt, M.
Schutten, R.L. Shwom, and K. Whyte, 2023: Ch. 20. Social systems and
justice. In: Fifth National Climate Assessment. Crimmins, A.R., C.W.
Avery, D.R. Easterling, K.E. Kunkel, B.C. Stewart, and T.K. Maycock,
Eds. U.S. Global Change Research Program, Washington, DC, USA,
available at <a href="https://doi.org/10.7930/NCA5.2023.CH20">https://doi.org/10.7930/NCA5.2023.CH20</a>.
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HUD notes that affordable housing is increasingly at risk from both
extreme weather events and sea level rise, with coastal communities
especially at risk. Recent peer-reviewed analysis and mapping by
independent research organization Climate Central projects that the
number of affordable housing units at risk from flooding in coastal
areas will triple by 2050,\18\ and a 2019 report from the Denali
Commission found that 144 Native Alaskan Villages face infrastructure
damage from erosion, flooding, and permafrost thaw.\19\
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\18\ Maya K. Buchanan et al. (2020). Environ. Res. Lett., 15,
124020.
\19\ Alaska Division of Geological & Geophysical Surveys.
February 23, 2021. Alaska's Environmentally Threatened Communities.
ArcGIS, <a href="https://storymaps.arcgis.com/stories/2a0d221e55ca48dd8092427b50a98804">https://storymaps.arcgis.com/stories/2a0d221e55ca48dd8092427b50a98804</a> (interpreting University of Alaska
Fairbanks Institute of Northern Engineering et al., Statewide Threat
Assessment: Identification of Threats from Erosion, Flooding, and
Thawing Permafrost in Remote Alaska Communities--Report Prepared for
the Denali Commission), November 2019, available at <a href="https://www.denali.gov/wp-content/uploads/2019/11/Statewide-Threat-Assessment-Final-Report-20-November-2019.pdf">https://www.denali.gov/wp-content/uploads/2019/11/Statewide-Threat-Assessment-Final-Report-20-November-2019.pdf</a>.

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[[Page 30853]]

HUD's experience in the wake of flood disasters is that unless
structures in flood-prone areas are properly designed, constructed, and
elevated, they may not withstand future severe flooding events. This
risk is exacerbated by climate change and projected increases in
hurricane rainfall and intensity as well as other precipitation
throughout most of the United States. This final rule provides for a
more forward-looking approach to floodplain management, which bases
decisions not just on past flooding but on how flood risk is
anticipated to grow and change over the anticipated life of a project.
This final rule expands the floodplain of concern from the 1-
percent-annual-chance floodplain to the FFRMS floodplain, designated
based on projected future flood risk, to ensure that HUD projects are
designed with a more complete picture of a proposed project site's
flood risk over time. Flood risk projection based on current climate
science can help HUD meet the objectives of E.O. 11988, including
avoidance of floodplain impacts and minimization of such impacts where
there is no practicable alternative to locating a HUD-assisted activity
in proximity to flood sources. Adequate elevation of structures is a
key minimization strategy, together with complementary natural
ecosystem processes and nature-based approaches, to promote the
preservation of beneficial floodplain functions.
As recognized by MitFLG and directed by the FFRMS and E.O. 13690,
requiring structures located within the expanded FFRMS floodplain to be
elevated or floodproofed to an additional elevation above the base
flood elevation will increase resiliency and reduce loss of life,
property damage, and other economic loss, and can also benefit property
owners by reducing flood insurance rates. These higher standards
provide an extra buffer above the base flood elevation based on the
best available information to improve the long-term resilience of
communities. Additionally, higher standards help account for increased
flood risk associated with projected sea level rise, increased
rainfall, and other climate risks, which are not considered in current
FEMA maps and flood insurance costs. As stated in the report ``Global
and Regional Sea Level Rise Scenarios for the United States'' (February
2022) by the U.S. Department of Commerce, National Oceanic and
Atmospheric Administration (NOAA),\20\ scientists are confident that
global sea level will rise by between about 1 and as much as 6.56 feet
by the year 2100.\21\ The higher standards required, in some cases, by
this final rule allow HUD to do more to address these increasing risks.
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\20\ Sweet, W.V., B.D. Hamlington, R.E. Kopp, C.P. Weaver, P.L.
Barnard, D. Bekaert, W. Brooks, M. Craghan, G. Dusek, T. Frederikse,
G. Garner, A.S. Genz, J.P. Krasting, E. Larour, D. Marcy, J.J.
Marra, J. Obeysekera, M. Osler, M. Pendleton, D. Roman, L. Schmied,
W. Veatch, K.D. White, and C. Zuzak, 2022: Global and Regional Sea
Level Rise Scenarios for the United States: Updated Mean Projections
and Extreme Water Level Probabilities Along U.S. Coastlines. NOAA
Technical Report NOS 01. National Oceanic and Atmospheric
Administration, National Ocean Service, Silver Spring, MD, 111 pp.,
<a href="https://oceanservice.noaa.gov/hazards/sealevelrise/sealevelrise-tech-report.html">https://oceanservice.noaa.gov/hazards/sealevelrise/sealevelrise-tech-report.html</a>.
\21\ Id. See also NOAA Climate Change Program Office, United
States Global Change Research Program, U.S. Climate Resilience
Toolkit, available at <a href="https://toolkit.climate.gov/topics/coastal/sea-level-rise">https://toolkit.climate.gov/topics/coastal/sea-level-rise</a>.
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Choosing alternative sites outside the FFRMS floodplain and
requiring additional elevation above the base flood elevation may also
lead to a net reduction of expected housing costs over time. HUD's
mission is to create strong, sustainable, inclusive communities and
quality affordable homes for all. Flood insurance is a key financial
tool to manage potential rebuilding costs and can make homes in risky
areas more expensive due to their greater flood risk. By elevating
additional feet above the base flood elevation, homeowners may benefit
from flood insurance premium reductions that will increase long-term
affordability.
Through this final rule, HUD is prioritizing using CISA in defining
the floodplain 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. Therefore, in this final rule, HUD will require the use
of CISA, where data is available and actionable, to establish the
required level of flood resilience for floodplain management decision
making, elevation of structures, and floodproofing. In areas where CISA
data is not currently available and actionable to define the FFRMS
floodplain, as described in this final rule, HUD will typically require
that the FFRMS floodplain to be based on the FEMA-mapped 0.2-percent-
annual-chance floodplain or a freeboard height above the FEMA-mapped 1-
percent-annual-chance floodplain, as further described in the
subsection that follows. As CISA data availability improves over time
and over a greater area, HUD expects the use of CISA to increase.
Beyond implementing the FFRMS floodplain and elevation
requirements, this final rule implements broader changes to modernize
and improve 24 CFR part 55 in accordance with the Department's climate
adaptation, environmental justice, and equity priorities. These
revisions explicitly recognize HUD's responsibility to consider the
environmental justice impact of the Department's actions within the
floodplain management and decision making process. To meet HUD's
affordable housing and community development mission more effectively
and efficiently, this final rule also streamlines decision making for
activities that mitigate flood risk, avoid wetland losses, or provide
co-benefits that directly contribute to HUD's efforts to reduce climate
impacts. This final rule also strengthens HUD's commitment to use
nature-based floodplain management approaches, where practicable, by
identifying specific strategies and practices that have proven
effective in increasing flood resilience and environmental quality.
HUD notes that adherence to the requirements in this final rule
does not modify any party's responsibilities or obligations under any
other Federal laws, including statutes and regulations administered by
other Federal agencies.

A. Federal Flood Risk Management Standard (FFRMS) Floodplain

To implement the framework described in this rule, this final rule
defines the FFRMS floodplain in a new 24 CFR 55.7. This new section
establishes a three-tiered approach to define the FFRMS floodplain,
depending on the data available in the project area.
1. Climate Informed Science Approach (CISA): The FFRMS floodplain
is defined as areas designated as having an elevated flood risk during
the anticipated life of the project based on CISA. CISA will generally
use the same methodology for both critical and non-critical actions;
however, the selection of climate change scenarios used for future
projections should account for the lower tolerance of risk based on the
action's criticality. Where

[[Page 30854]]

part 55 applies,\22\ CISA is the required approach to define the FFRMS
floodplain if data is available and actionable. When preparing an
Environmental Impact Statement (EIS), an analysis of sea level rise and
other climate impacts utilizing CISA and other climate risk tools will
be required regardless of whether pre-existing data is available for
reference. Because EIS level projects have such a high potential for
adverse impacts, HUD believes climate informed science is necessary to
fully understand the potential environmental concerns, where available
and actionable data exists or can be generated in accordance with 42
U.S.C. 4336(b)(3).
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\22\ All HUD programs, with the exception of programs that are
not subject to NEPA (e.g., the Federal Housing Administration single
family program and the Housing Trust Fund), are subject to part 55.
Certain projects may be exempt from part 55 based on project
activities, as discussed in Sec. 55.12 of this final rule.
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2. 0.2-Percent-Annual-Chance Flood Approach (0.2 PFA): For non-
critical actions, where CISA data or other types of CISA analysis is
not available or actionable, but FEMA has defined the 0.2-percent-
annual-chance floodplain, the FFRMS floodplain is defined as those
areas that FEMA has designated as within the 0.2-percent-annual-chance
floodplain. For critical actions where CISA data is not available nor
actionable, the FFRMS floodplain is defined as either the area within
the 0.2-percent-annual-chance floodplain or the area that results from
adding an additional three feet to the base flood elevation, whichever
results in the larger floodplain and higher elevation. For any action,
newly constructed or substantially improved structures within this
definition of the FFRMS floodplain are required to be elevated to or
above the FFRMS floodplain.
3. Freeboard Value Approach (FVA): For non-critical actions, if
CISA data is not available or actionable and the FEMA 0.2-percent-
annual-chance floodplain is not defined, the FFRMS floodplain is
defined as those areas, including the horizontal extent, that result
from adding an additional two feet to the base flood elevation as
established by the effective FEMA FIRM or Flood Insurance Study (FIS).
If available, a FEMA-provided interim or preliminary FIRM, FIS, or
advisory base flood elevation, whether regulatory or informational in
nature, may also be used; however, an interim or preliminary FEMA
analysis map may not be used if the mapped base flood elevation is
lower than the current FIRM or FIS. For critical actions where CISA
data is not available or actionable and where the 0.2-percent-annual-
chance floodplain elevation is not defined, the FFRMS floodplain is
defined as those areas, including the horizontal extent, that result
from adding an additional three feet to the base flood elevation.
If CISA data is not available or actionable and FEMA FIRMs, FIS,
preliminary maps, and advisory base flood elevations are unavailable or
insufficiently detailed to determine base flood elevation, other
Federal, State, local, or Tribal data may be used as ``best available
information'' to define the 1-percent-annual-chance floodplain.

B. Climate Informed Science Approach--Availability and Actionability of
Data

As described throughout this final rule, CISA is the preferred
approach to define the FFRMS floodplain. In Sec. 55.7, HUD requires
that the FFRMS floodplain be defined using CISA where data is available
and actionable.
As described in Sec. 55.7, HUD considers CISA data to be available
and actionable for a particular project where: (1) the data is included
in a tool, resource, or other process developed or identified by a
Federal agency or agencies to define the floodplain using CISA, and (2)
HUD has adopted the particular tool, resource, or other process through
a Federal Register notice for comment. As a matter of policy, HUD has
decided to publish a Federal Register notice for comment prior to the
use of a particular tool, resource, or other process under Sec. 55.7.
Regardless of whether HUD has adopted a particular tool, resource,
or other process to define the floodplain using CISA, this final rule
at Sec. 55.7(f) permits HUD or a responsible entity to voluntarily
define the FFRMS floodplain utilizing CISA when a State, Tribal, or
local government has formally adopted, through code or other formal
adoption measures, a tool, resource, or other written standards that
provides data or other methods to identify the FFRMS floodplain using
CISA for a particular project. In addition, HUD may identify additional
tools, resources, or other processes that a responsible entity may
voluntarily use to define the FFRMS floodplain using CISA. HUD or a
responsible entity has the option to utilize a tool, resource, written
standard, or other process permitted in Sec. 55.7(f) where it results
in an elevation that is at least as high as the lowest of (1) the 0.2-
percent-annual-chance floodplain elevation; (2) the elevation that
results from adding an additional two feet to the base flood elevation;
or (3) the elevation required by paragraphs (b) or (c) of Sec. 55.7,
if CISA data is available and actionable under paragraphs (b)(1) or
(c)(1). Where HUD or a responsible entity voluntarily defines the FFRMS
floodplain using the options in paragraphs (f)(1)(i) or (f)(1)(ii) of
Sec. 55.7, the criticality of the action must be considered when
determining the appropriate elevation of the FFRMS floodplain.

C. Revised Definitions

This final rule revises various definitions in 24 CFR 55.2. The
definitions are revised as follows:
Best available information: The final rule relocates the definition
of ``best available information'' from within the definition of coastal
high hazard area in 24 CFR 55.2 to two new sections, 24 CFR 55.7 and
55.8. The final rule also adjusts the definitions of ``0.2-percent-
annual-chance (500-year) floodplain,'' ``floodway,'' and ``1-percent-
annual-chance (100-year) floodplain,'' to reflect these new citations.
Sources of best available information for identifying the FFRMS
floodplain are described in 24 CFR 55.7 according to CISA, 0.2-Percent-
Annual-Chance Flood Approach, and FVA methods. Best available
information sources for floodways, coastal high hazard areas, and areas
within the Limit of Moderate Wave Action (LiMWA) are identified in 24
CFR 55.8 and include effective and advisory or preliminary FEMA
analysis reflected in FEMA's maps.
Critical action: The final rule revises the definition of
``critical action'' to include community stormwater management
infrastructure and water treatment plants as examples of utilities or
services that could become inoperative during flood and storm events.
Federal Flood Risk Management Standard (FFRMS) floodplain: The
final rule adds the definition of FFRMS floodplain.
0.2 percent-annual chance floodplain: The final rule updates the
definition of ``0.2-percent-annual-chance floodplain'' to be consistent
with the new definition of FFRMS floodplain. The final rule also
removes the statement that the 0.2-percent-annual-chance floodplain is
the minimum area of concern for critical actions, which is not
consistent with HUD's implementation of FFRMS when CISA data is
available and actionable.
Impervious surface area: The final rule adds the definition of
``impervious surface area'' to provide an objective criterion for use
in Sec. Sec. 55.8(a)(1), 55.12, and 55.14.
Limit of Moderate Wave Action (LiMWA): The final rule adds the
definition of ``Limit of Moderate Wave Action (LiMWA).'' The LiMWA is
the

[[Page 30855]]

inland limit of the portion of Coastal A Zone where wave heights can be
between 1.5 and 3 feet during a base flood event, subjecting properties
to damage from waves and storm surge.\23\ The area on the flood map
between the coastal high hazard area (Zone V) and the LiMWA is called
the Coastal A Zone, and laboratory tests have consistently confirmed
that wave heights within the Coastal A Zone can cause significant
damage to structures that are not constructed to withstand coastal
hazards.\24\ Consistent with the risks posed by these coastal hazards,
this final rule requires structures within the Coastal A Zone to be
built to Zone V standards.
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\23\ The LiMWA marks the inland limit of the ``Coastal A Zone,''
a term referenced by building codes and standards. The Coastal A
Zone is the part of the coastal Special Flood Hazard Area (SFHA)
where wave heights can be between 1.5 and 3 feet during the base
flood event, see <a href="https://www.fema.gov/sites/default/files/documents/fema_coastal-glossary.pdf">https://www.fema.gov/sites/default/files/documents/fema_coastal-glossary.pdf</a>.
\24\ See, e.g., Federal Emergency Management Agency, National
Flood Insurance Program, Answers to Questions About the NFIP,
available at <a href="https://agents.floodsmart.gov/nfip-answers-to-questions">https://agents.floodsmart.gov/nfip-answers-to-questions</a>.
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New construction: The final rule removes the definition for new
construction from Sec. 55.2 and incorporates it into a new Sec.
55.10, ``Limitations on HUD assistance in wetlands.'' The definition is
also revised to provide additional context on construction actions.
Wetlands: The final rule revises the definition for ``wetlands'' by
removing the part of the definition that described how wetlands are
determined and moves that description to a new Sec. 55.9,
``Identifying wetlands.'' The final rule also removes the non-
exhaustive list of examples of what does not constitute a wetland
because it is not necessary to list things that the definition does not
cover and in order to avoid confusion about certain areas around deep
water aquatic habitats that may be considered wetlands.

D. Assignment of Responsibilities

This final rule clarifies in 24 CFR 55.3 that HUD Assistant
Secretaries, the HUD General Counsel, and the President of the
Government National Mortgage Association shall take responsibility for
all decisions made under their jurisdictions that are made pursuant to
the decision making process in 24 CFR 55.20. The final rule also
revises the duties of grantees and applicants for clarity and adds a
new Sec. 55.3(f) that codifies the role of third-party providers.

E. Notification of Floodplain Hazard

This final rule revises HUD's regulations requiring notification of
floodplain hazard. The notification requirements in 24 CFR 55.21 and
conveyance restrictions in 24 CFR 55.22 are moved to a new 24 CFR 55.4.
This creation of the new Sec. 55.4 emphasizes the importance of
providing notice as early in the process as possible. Section 55.4
retains the requirement that HUD (or HUD's designee) or the responsible
entity must ensure that any party participating in a financial
transaction for a property located in a floodplain and any current or
prospective tenant is notified of the hazards of the floodplain
location. In addition, 24 CFR 55.4 defines the notification
requirements for property owners, buyers, developers, and renters and
identifies specific hazards and information that must be included in
these notices based on the interests of these parties.
The required information for owners, buyers, and developers
includes the requirement or option to obtain flood insurance, the
approximate elevation of the FFRMS floodplain, proximity of the site to
flood-related infrastructure including dams and levees,\25\ ingress and
egress or evacuation routes, disclosure of information on flood
insurance claims filed on the property, and other relevant information
such as available emergency notification resources. For HUD-assisted,
HUD-acquired, and HUD-insured rental properties, new and renewal leases
are required to include acknowledgements signed by residents indicating
that they have been advised that the property is in a floodplain and
flood insurance is available for their personal property. Renters must
also be informed of the location of ingress and egress or evacuation
routes, available emergency notification resources, and emergency
procedures for residents in the event of flooding. HUD encourages a
proactive and systematic approach to notification requirements for
properties in floodplains to ensure that prospective buyers and renters
are made aware of potential flood risk with sufficient warning so that
they can make risk-informed decisions.
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\25\ Proximity to flood control infrastructure can be identified
through the U.S. Army Corps of Engineers' National Levee Database
and National Inventory of Dams, <a href="https://levees.sec.usace.army.mil/">https://levees.sec.usace.army.mil/</a>.
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The final rule also moves the conveyance restrictions for the
disposition of multifamily real property from 24 CFR 55.22 to 24 CFR
55.4 with minimal changes to reflect updated floodplain terminology.

F. Flood Insurance

To address the issues of flood insurance requirements more
comprehensively in the context of 24 CFR part 55 decision making, this
final rule consolidates and moves all applicable flood insurance
requirements to a new Sec. 55.5. The flood insurance topic
requirements covered in the new Sec. 55.5 include Flood Disaster
Protection Act (FDPA) limitations on HUD program participation for
properties in communities not participating in FEMA's NFIP and on HUD
disaster assistance for property damage in a special flood hazard area
where previous flood disaster assistance required maintenance of flood
insurance and the insurance was not maintained. In addition, Sec. 55.5
includes the much more frequently applicable FDPA requirement for HUD-
assisted projects regarding the mandatory purchase of flood insurance
within the Special Flood Hazard Area (SFHA) as designated by FEMA on
the effective FIRM or FIS, and the NFIP plays an important role in
minimization measures to reduce flood losses.
The new Sec. 55.5 also includes new language clarifying that HUD
or the responsible entity may require flood insurance beyond the
minimums established in the FDPA or by a State, locality, Tribe, or
part 55 when necessary to minimize financial risk. Also, the new Sec.
55.5 clarifies that mortgagees participating in a HUD assistance or
mortgage insurance or guarantee program may impose additional flood
insurance requirements.
While nothing in part 55 requires flood insurance outside of the
SFHA, HUD strongly encourages that flood insurance be obtained and
maintained for all structures within the FFRMS floodplain to mitigate
financial losses. It may also be appropriate for high-value structures
to maintain more flood insurance than is available under the NFIP. The
maximum available building coverage through the NFIP is $250,000 for
single family structures of one-to-four units and $500,000 for
multifamily structures with five or more housing units and commercial
structures.\26\ For example, for FHA multifamily programs, the MAP
Guide provides for flood insurance in an amount at least equal to the
greater of: (1) the maximum flood insurance available for that type of
property under the NFIP; or (2) an amount equal to the replacement cost
of

[[Page 30856]]

the bottom two stories above grade.\27\ For larger structures in more
expensive areas, it may be necessary to obtain private flood insurance
to insure up to the full replacement cost of the structure or owners
may risk catastrophic financial losses even with NFIP coverage.
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\26\ See FEMA, Flood Insurance and the NFIP Fact Sheet (June 14,
2021), available at <a href="https://www.fema.gov/fact-sheet/flood-insurance-and-nfip">https://www.fema.gov/fact-sheet/flood-insurance-and-nfip</a>.
\27\ See MAP Guide, sec. 3.9.2.3, available at <a href="https://www.hud.gov/program_offices/administration/hudclips/guidebooks/hsg-GB4430">https://www.hud.gov/program_offices/administration/hudclips/guidebooks/hsg-GB4430</a>. See also form HUD-92329, available at <a href="https://www.hud.gov/program_offices/administration/hudclips/forms/hud9">https://www.hud.gov/program_offices/administration/hudclips/forms/hud9</a>. Per the NFIP
definition, the grade level is defined as the lowest or highest
finished ground level that is immediately adjacent to the walls of
the building. Use natural (pre-construction), ground level, if
available, for Zone AO and Zone A (without BFE).
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G. Compliance

This final rule creates a new Sec. 55.6 regarding complying with
the requirements for floodplain management and protection of wetlands
by outlining the process HUD or the responsible entity must follow to
determine whether compliance with part 55 is required. The new Sec.
55.6 also describes how to determine whether the 8-step decision making
process \28\ is required and whether the proposed action would require
notification and flood insurance. The new Sec. 55.6 does not create
any new requirements but, to assist practitioners, Sec. 55.6 does
provide a process to comply with part 55. The new Sec. 55.6 also moves
a summary of documentation requirements from Sec. 55.27 to Sec.
55.6(d).
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\28\ For a discussion of the decision making process in the
Guidelines, see Guidelines for Implementing Executive Order 11988,
Floodplain Management, and Executive Order 13690, Establishing a
Federal Flood Risk Management Standard and a Process for Further
Soliciting and Considering Stakeholder Input (October 8, 2015).
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This final rule also creates a new section regarding limitations on
HUD assistance in floodplains at Sec. 55.8 and revises Sec. 55.10 to
address the topic of limitations on HUD assistance in wetlands.
Sections 55.8 and 55.10 largely maintain the restrictions that existed
prior to this final rule but with some revisions and additions. For
example, Sec. 55.8(b) maintains the current requirement that all
decisions be based on the best available flood data provided by FEMA
unless the current effective data indicates a higher flood risk than
interim or preliminary sources.
In order for HUD assistance to be used in a proposed activity,
Sec. 55.8(c) requires that HUD or the responsible entity take measures
to address repeat flood losses associated with structures identified by
FEMA as Severe Repetitive Loss (SRL) properties.\29\ When FEMA has
approved improvements designed to prevent repeated flood losses at the
SRL property and communicated these to the property owner, completion
of this FEMA-identified mitigation qualifies the structure to be listed
as ``Mitigated'' and may reduce the flood insurance premium of the SRL
property. To ensure that HUD substantial improvement, reconstruction,
or new construction funding and HUD-required mitigation identified in
the 8-step decision making process delivers this benefit, under Sec.
55.8(c) HUD or the responsible entity must identify and incorporate the
FEMA identified SRL mitigation within Step 5 (minimization of impacts)
of the 8-step decision making process at Sec. 55.20. The intent of
this addition is to preserve lives and property, avoid repeated flood
losses, potentially reduce flood insurance costs, and ensure that HUD-
identified mitigation at a minimum meets the level of mitigation
required by FEMA to be listed as ``Mitigated'' in its NFIP database.
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\29\ SRL properties are defined following current FEMA
standards. In its April 2020 NFIP Flood Insurance Manual, FEMA
designates NFIP-insured single family or multifamily residential
buildings as SRL where:
1. The building has incurred flood-related damage for which four
or more separate claims payments have been made, with the amount of
each claim (including building and contents payments) exceeding
$5,000, and with the cumulative amount of such claims payments
exceeding $20,000; or
2. At least two separate claims payments (building payments
only) have been made under such coverage, with the cumulative amount
of such claims exceeding the market value of the building.
In both instances, at least two of the claims must be within 10
years of each other, and claims made within 10 days of each other
will be counted as one claim. In determining SRL status, FEMA
considers the loss history since 1978, or from the building's
construction if it was built after 1978, regardless of any changes
in the ownership of the building. The term ``SRL property'' refers
to either an SRL building or the contents within an SRL building, or
both. The most recent designations can be found in Appendix I of the
April 2020 NFIP Flood Insurance Manual, available at <a href="https://www.fema.gov/sites/default/files/2020-05/fim_appendix-i-severe-repetitive-loss-properties_apr2020.pdf">https://www.fema.gov/sites/default/files/2020-05/fim_appendix-i-severe-repetitive-loss-properties_apr2020.pdf</a>.
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H. Incidental Floodplain Exception

For purposes of defining when projects with onsite floodways may
proceed, this final rule removes floodways, as well as coastal high
hazard areas and the LiMWA, from the incidental floodplain exception at
Sec. 55.12(c)(7) and replaces it with the new Sec. 55.8(a)(1), which
covers limitations on HUD assistance in floodways. The new Sec.
55.8(a)(1) clarifies that HUD assistance may be used in floodways in
two circumstances:
1. Where an exception in Sec. 55.12 applies. This is not a change
from HUD's existing regulations.
2. Where all structures and most improvements are removed from the
floodway and a permanent covenant or comparable restriction would
prevent future development or expansion of existing uses in the
floodplain and/or wetland. Rehabilitation activities, including
reconstruction in the case of Presidentially declared disasters, that
do not expand existing uses in the FFRMS floodplain outside of the
floodway are permitted under the new Sec. 55.8. This exception
combines aspects of the existing exceptions for floodplain restoration
activities and incidental floodplains and allows for limited
improvements in the floodway, including functionally dependent uses,
utility lines, de minimis improvements, and removal of existing
structures or improvements. This option allows for a broader range of
activities in the floodway and in the adjacent FFRMS floodplain than is
permitted under the current incidental floodplain exception. This
option does require projects with onsite floodways to complete the 8-
step decision making process in Sec. 55.20 and determine that there
are no practicable alternatives before approving any proposed activity
on a site that includes a floodway.
This final rule maintains a narrower version of the existing
incidental floodplain exception as applied to the FFRMS floodplain (not
including floodways, coastal high hazard areas, or within the LiMWA) in
the revised Sec. 55.12(g). The revised Sec. 55.12(g) allows projects
to proceed without completing the 8-step decision making process where
an incidental portion of the project site falls within the FFRMS
floodplain.

I. Identifying Wetlands and Limitations on HUD Assistance in Wetlands

This final rule adds a new Sec. 55.9 and revises Sec. 55.10 to
address issues regarding wetlands identification and HUD's limitations
on work impacting wetlands.
The new Sec. 55.9, ``Identifying Wetlands,'' builds on the
definition of ``wetlands'' in Sec. 55.2(b)(13) by clarifying common
areas of confusion and removes unnecessary procedural requirements.
Section 55.9 revises HUD's current regulations to address limitations
associated with the exclusive use of the National Wetlands Inventory
(NWI) for wetlands screening.\30\ This final rule broadens the wetlands
definition beyond NWI screening alone and addresses the potential for
data gaps or outdated information by requiring that HUD and

[[Page 30857]]

responsible entities supplement the NWI with a visual observation of
the property to assess wetlands indicators. Where these sources do not
provide a conclusive answer as to whether a wetland is present,
practitioners may use one of three methods to determine the presence or
absence of a wetland: (1) consultation with the U.S. Fish and Wildlife
Service (USFWS); (2) reference to other Federal, State, and/or local
resources and site analysis by the environmental review preparer; or
(3) a wetlands evaluation prepared by a qualified wetlands scientist.
This process of determining the presence or absence of a wetland
increases flexibility and avoids unnecessary consultation with the
USFWS without increasing the risk that wetlands will not be accurately
identified.\31\
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\30\ The U.S. Fish and Wildlife Service maintains the NWI. For
more information regarding the NWI, see the U.S. Fish and Wildlife
Service's National Wetlands Inventory website, available at <a href="https://www.fws.gov/program/national-wetlands-inventory">https://www.fws.gov/program/national-wetlands-inventory</a>.
\31\ This approach is specific to HUD's regulations and differs
from the United States Army Corps of Engineers' (USACE) current
process for jurisdictional wetland determination identified in the
USACE Wetland Delineation Manual.
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The revised Sec. 55.10, ``Limitations of HUD Assistance in
Wetlands,'' explicitly defines the procedural requirements for projects
with the potential to directly or indirectly impact on- or off-site
wetlands. These revisions to Sec. 55.10 codify and clarify existing
policies on wetlands compliance without imposing new requirements.

J. Clarification and Revisions of Exceptions

This final rule breaks down the exceptions in the current Sec.
55.12(a)-(c) into three separate sections, Sec. Sec. 55.12, 55.13, and
55.14. This revision improves the overall clarity of the three distinct
categories of excepted activities: (1) those that are excluded from all
compliance with part 55 (Sec. 55.12); (2) those that must comply with
the standards and limitations in part 55, such as prohibitions on
activities in floodways but that are not required to complete the 8-
step decision making process (Sec. 55.13); and (3) those that may
complete the modified 5-Step decision making process in lieu of the
full 8-step decision making process (Sec. 55.14). Beyond this
revision, the final rule makes only limited changes to the exceptions
themselves.
1. Exceptions in Sec. 55.12
Based on HUD's experience and activities reflected in environmental
review records for floodplain restoration projects, this final rule
provides flexibility for floodplain-compatible parks and recreation
uses routinely combined with floodplain and wetland restoration and
preservation work. In the revised 24 CFR 55.12, ``Inapplicability of 24
CFR part 55 to certain categories of proposed actions,'' this final
rule expands on the existing exception for floodplain and wetland
restoration and preservation activities to allow certain structures and
improvements designed to be compatible with the beneficial floodplain
or wetland function of a property.
Two exceptions are removed through this final rule. The exception
for sites where FEMA has issued a Letter of Map Amendment (LOMA) or
Letter of Map Revision (LOMR) in the current Sec. 55.12(c)(8) is
removed. HUD is removing the exception described in the current Sec.
55.12(c)(8)(i) because a FEMA determination, through the LOMA/LOMR
process, that a location is outside of the 1-percent-annual-chance
floodplain or above base flood elevation is not intended to state
whether the location is or is not within the FFRMS floodplain. HUD is
removing the exception described in the current Sec. 55.12(c)(8)(ii)
on conditional LOMAs and conditional LOMRs for the same reason, as well
as because this exception can incentivize adding fill in a floodplain
in a manner that reduces floodplain function in adjoining areas by
excepting such actions from compliance with part 55. HUD is changing
this policy to disincentivize the use of sitewide fill and require
completion of the 8-step decision making process before adding fill to
modify a floodplain.
HUD is also removing the exception described in the current Sec.
55.12(c)(11) for projects related to ships and waterborne vessels
because these are not activities that generally receive HUD funds and
practitioners have expressed confusion over its presence in the rule.
2. Exceptions in Sec. Sec. 55.13 and 55.14
The final rule makes minimal changes to the activities listed in
the current Sec. 55.12(a) and (b), which must comply with the
requirements in part 55 but do not trigger the full 8-step decision
making process. The final rule makes clarifying changes to the
requirements currently listed in Sec. 55.12(a)(3) and (4) that the
footprint of the structure and paved areas are not significantly
increased. Through this final rule, the new Sec. 55.14(c) and (d)
require that the footprint of the structure and paved areas are not
increased by more than 20 percent. The final rule also includes a
clarification for the requirement currently listed in Sec.
55.12(b)(5)(iii) that the approval of financial assistance to lease an
existing structure located in the floodplain requires that the
structure be insured to the maximum in order to meet the exception.
This existing provision was inadvertently omitted from the text of the
proposed rule. The final rule provision also clarifies that this
exception applies to financial assistance to lease both an existing
structure and units within an existing structure.
Notably, the final rule adds two new exceptions:
1. Section 55.13(f). For special projects dedicated to improving
energy or water efficiency of utilities or installing renewable energy
that do not meet the threshold for substantial improvement, the new
Sec. 55.13(f) limits procedural hurdles to energy or water efficiency
retrofit projects, which have limited potential to adversely affect
floodplains or wetlands.
2. Section 55.14(e). For repairs, rehabilitation, or replacement of
certain infrastructure with limited impact on impervious surface area,
including streets, curbs, and gutters, Sec. 55.14(e) provides an
exception for smaller scale infrastructure projects that had been
lacking from part 55. This added exception does not apply to critical
actions, levee systems, chemical storage facilities (including any
tanks), wastewater facilities, or sewer lagoons, all of which would
require the 8-step decision making process.

K. 8-Step Decision Making Process

For actions that trigger the 8-step decision making process in
whole or in part, the final rule makes several revisions to Sec. 55.20
to implement FFRMS, clarify proper completion of each of the 8 steps of
the decision making process, and otherwise modernize requirements.
These revisions include:
1. Codifying roles and responsibilities in the 8-step decision
making process, which have been frequently misunderstood.
2. Editing for consistency with FFRMS and new paragraphs on
identification and limitations associated with the FFRMS floodplain and
wetlands.
3. Adding an option to publish public notices in Steps 2 and 7 on
an appropriate government website as an alternative to a printed news
medium.
4. Inserting further clarifications and examples of required and
suggested analysis.
5. Adding a requirement to coordinate the 8-step decision making
process with any public engagement process associated with
environmental justice, where project planners are also engaging
stakeholders. This is consistent with the policy goals of Executive
Order 14096, ``Revitalizing Our Nation's Commitment

[[Page 30858]]

to Environmental Justice.'' \32\ HUD intends to issue updated guidance
on advancing environmental justice.
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\32\ E.O. 14096 builds on and supplements prior E.O.s. See 88 FR
25,251 (Apr. 26, 2023), <a href="https://www.federalregister.gov/documents/2023/04/26/2023-08955/revitalizing-our-nations-commitment-to-environmental-justice-for-all">https://www.federalregister.gov/documents/2023/04/26/2023-08955/revitalizing-our-nations-commitment-to-environmental-justice-for-all</a>.
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L. Elevation, Floodproofing, Minimization, and Restoration

In addition to the revisions to Sec. 55.20 previously described,
this final rule significantly expands Step 5 in Sec. 55.20(e) to
implement FFRMS. Section 55.20(e) of the final rule provides that, in
addition to the current mitigation and risk reduction requirements, all
new construction and substantial improvement actions in the FFRMS
floodplain subject to the 8-step decision making process must be
elevated or, in certain cases, floodproofed above the FFRMS floodplain.
If higher elevations, setbacks, or other floodplain management measures
are required by State, Tribal, or locally adopted code or standards,
HUD will require that those higher standards apply. The revised Sec.
55.20(e) also provides more specific instruction on minimization and
floodplain restoration measures, which are a key component of
increasing flood resilience and must be considered in the 8-step
decision making process.
For non-critical actions that are non-residential structures or
multifamily residential structures that have no residential dwelling
units below the FFRMS floodplain, through Sec. 55.20(e)(1)(ii) of this
final rule, new construction and substantial improvement projects may,
as an alternative to being elevated above the FFRMS floodplain, be
designed and constructed such that, below the FFRMS floodplain, the
structure is floodproofed. Except for changing ``base flood level'' to
``FFRMS floodplain,'' as defined in Sec. 55.7, this final rule adopts
FEMA's requirements for floodproofing as provided in FEMA's regulations
at 44 CFR 60.3(c)(3)(ii) and 60.3(c)(4)(i). In summary, all
substantially rehabilitated or newly constructed structures within the
FFRMS floodplain which are not elevated must be floodproofed consistent
with the latest FEMA standards at or above the level of the FFRMS
floodplain. This provision permits owners of non-residential and
certain residential buildings to construct structures in a way that is
less expensive than elevating but allows the buildings to withstand
flooding, thus appropriately balancing property protection with costs
and reflecting the lower risk to human life and safety in non-
residential structures or parts of structures.
In the case of residential buildings, Sec. 55.20(e)(1) of this
final rule provides that the term ``lowest floor'' must be applied
consistent with FEMA regulations in 44 CFR 59.1, FEMA's Elevation
Certificate guidance, or FEMA's current guidance that establishes
lowest floor.
Through this final rule, Sec. 55.20(e)(2) identifies specific
strategies that can reduce flood risk and loss of beneficial values of
floodplains and wetlands, including green infrastructure,
reconfiguration of the project footprint, and incorporation of
resilient buildings standards. These strategies are based on floodplain
and stormwater management best practices and HUD experience. Based on
requests for technical assistance in this area, HUD believes the
inclusion of recommended minimization measures will assist persons
engaged in an 8-step decision making process.
This final rule also adds a new Sec. 55.20(e)(3) to describe more
clearly what is meant by restoration and preservation of wetlands or
beneficial functions of the floodplain. Floodplain preservation is a
concept that has been used in 24 CFR part 55 implementation
historically but has been defined primarily through guidance, and this
clarification is based on past practice and the successful
incorporation of these measures in HUD-assisted projects.
Finally, this final rule replaces the current Sec. 55.20(e)(3),
which defines mitigation measures specific to critical actions, with a
new Sec. 55.20(e)(4). Section 55.20(e)(4) establishes mandatory
actions to plan ahead for residents' safety in multifamily residential
properties, healthcare facilities, and critical actions.

M. Processing for Existing Nonconforming Sites

This final rule creates a new Sec. 55.21, ``Alternate processing
for existing nonconforming sites,'' to address concerns about existing
sites with onsite floodways. This section creates a special approval
process for improvements to existing HUD-assisted or HUD-insured
properties with onsite floodways under the following circumstances,
summarized as:
1. HUD completes an 8-step decision making process and
environmental review pursuant to part 50 and mandates measures to
reduce flood risk and ensure that there are no other environmental
risks or hazards at the site;
2. Specific measures will be taken to minimize flood risk and
improve overall resilience at the site, including removing all
residential units and critical action structures from the floodway; and
3. HUD determines that the HUD assistance cannot be practicably
transferred to a safer site.
The purpose of this section is to establish a means of continuing
HUD assistance or financing in exceptional circumstances to existing
HUD-assisted or HUD-financed projects (e.g., properties receiving
assistance through Public Housing, Section 8 Project-based Rental
Assistance, or subject to a HUD-insured mortgage) that would otherwise
be unable to comply with part 55 due to the presence of an on-site
floodway. This section should be applied only in very rare cases and is
not intended to eliminate the general prohibition on providing HUD
assistance for projects within floodways. However, HUD recognizes that
there are circumstances in which terminating HUD assistance would not
improve residents' overall resilience or safety in the context of HUD's
mission. In such cases, HUD will closely review the site and determine
whether the best option to improve flood resilience would be financing
improvements at the existing site or rejecting HUD assistance at the
site. The Assistant Secretary for Community Planning and Development
has the authority to approve a project after HUD has met all of the
conditions above.

N. Other Changes to Part 55

This final rule makes various other changes to part 55 to update
terminology and references and restructures part 55 for readability and
accuracy. Additionally, this final rule removes various provisions
codified in part 55 that are outdated or underutilized.
The final rule removes Sec. 55.24, ``Aggregation,'' because this
provision is redundant with aggregation principles described more
clearly in 24 CFR parts 50 and 58, which also apply to projects
processed under 24 CFR part 55.
The final rule also removes the current Sec. 55.25, ``Areawide
compliance.'' Areawide decision making described in this section
requires a complex notification process involving publications, and HUD
has no record of the provision's use in a HUD-assisted activity since
the promulgation of 24 CFR part 55. This provision is unnecessary
because HUD has well-established procedures for tiering of
environmental review records that similarly facilitate compliance with
part

[[Page 30859]]

55 across a geographic area without relying on Sec. 55.25.
The final rule relocates instructions on documenting 24 CFR part 55
decision making in the HUD environmental review record from Sec. 55.27
to Sec. 55.6 so that the instructions appear in context with general
instructions on compliance with 24 CFR part 55 and a description of its
structure. Additionally, the final rule revises the documentation
requirements for consideration of alternatives to the proposed action
to remove the requirement to compile a list of alternative properties
in the local market. This information may be unavailable for some
project types or not relevant to consideration of viable alternatives
to achieve the goals of the decision making process within a given HUD
program context.
The final rule removes Sec. 55.28, which, in concept, provides
relief from five of the eight steps in the wetlands decision making
process when a permit has been secured from the United States Army
Corps of Engineers (USACE) under Section 404 of the Clean Water Act for
a proposed HUD-assisted construction activity in a jurisdictional
wetland outside of the floodplain. The final rule removes this section
because practitioners have not historically found it useful, and part
55 already contains another section that offers similar relief from the
8-step decision making process where USACE (or any other Federal
agency) has already completed the 8-step decision making process for
the same action. Section 55.26, which the final rule retains with
revisions, allows HUD or responsible entities to adopt another agency
or responsible entity's 8-step decision making process under conditions
that are less restrictive than those in Sec. 55.28, which apply to
decision making under E.O. 11988 or E.O. 11990 carried out by USACE.

O. Minimum Property Standards

This final rule applies a new elevation standard to one-to-four-
family residential structures with mortgages insured by FHA. Generally,
in HUD's single family mortgage insurance programs, Direct Endorsement
mortgagees submit applications for mortgage insurance to HUD, and
Lender Insurance mortgagees endorse loans for insurance after the
structure has been built. Thus, there is no HUD review or approval
before the completion of construction. In these instances, HUD is not
undertaking, financing, or assisting construction or improvements.
Thus, the FHA single family mortgage insurance program is not subject
to review under E.O. 11988, NEPA, or related environmental laws or
authorities. However, newly constructed single family properties in
HUD's mortgage insurance programs are generally required to meet HUD's
Minimum Property Standards under 24 CFR 200.926 through 200.926e. These
property standards require that when HUD insures a mortgage on a
property, the property meets basic livability and safety standards and
is code compliant. The section relating to construction in flood hazard
areas, Sec. 200.926d(c)(4), has long been included as a property
standard.
In alignment with the revisions in this final rule that address
FFRMS under E.O. 11988, this final rule also amends the Minimum
Property Standards on site design, specifically the standards
addressing drainage and flood hazard exposure at Sec. 200.926d(c)(4).
The purpose of the amendment of the property standards is to decrease
potential damage from floods, increase the safety and soundness of the
property for residents, and provide for more resilient communities in
flood hazard areas. The final rule revises Sec. 200.926d(c)(4) by
requiring the lowest floor (including basements and other permanent
enclosures) of newly constructed dwellings, within the 1-percent-
annual-chance floodplain, to be at least 2 feet above the base flood
elevation as determined by best available information. For one- to
four-unit housing under HUD's mortgage insurance and low-rent public
housing programs, HUD's Minimum Property Standards in 24 CFR part 200
currently require that a one- to four-unit property involving new
construction, located in the 1 percent-annual-chance floodplain in the
effective FIRM, be elevated to the effective FIRM base flood elevation.
This final rule adds two feet of additional elevation to the base flood
elevation as a resilience standard and applies this standard only to
new construction of such properties and not to substantial improvement.
This final rule does not require consideration of the horizontally
expanded FFRMS floodplain for single family mortgage insurance projects
governed by the requirements in the Minimum Property Standards.

P. Categorical Exclusion

This final rule amends Sec. 50.20(a)(2)(i) to revise the
categorical exclusion from further environmental review under NEPA for
minor rehabilitation of one- to four-unit residential properties.
Specifically, this final rule removes the qualification that the
footprint of the structure may not be increased in a floodplain or
wetland when HUD performs the review. In 2013, HUD removed the
footprint trigger from the corresponding categorical exclusion at Sec.
58.35(a)(3)(i) for rehabilitations reviewed by responsible entities.
This change makes the review standard the same regardless of whether
HUD or a responsible entity is performing the review. Moreover, when
HUD performs a review under 24 CFR part 50, the categorical exclusion
in Sec. 50.20(a)(3) applies to construction, but not rehabilitation,
of up to four units in a floodplain or wetland as an individual action
such that an environmental assessment or environmental impact statement
is normally not required. Rehabilitated structures in a floodplain or
wetland with an increased footprint currently require an environmental
assessment or environmental impact statement.\33\ It is logically
inconsistent to require a greater review for minor rehabilitations than
new construction. Similarly, it is logically inconsistent to apply a
higher level of review for HUD as opposed to grantees because the
proposed actions would be the same regardless of review authority under
24 CFR part 50 or part 58.
---------------------------------------------------------------------------

\33\ See Sec. 50.20(a)(3)(iii).
---------------------------------------------------------------------------

Actions under this revised categorical exclusion remain subject to
E.O. 11988, E.O. 11990, and part 55, and any impact resulting from an
increased footprint in a floodplain or wetland will be fully addressed
by the 8-step decision making process in part 55.

Q. Permitting Online Posting

This final rule updates Sec. Sec. 50.23, 58.43, 58.45, and 58.59
to allow public notices to be posted on an appropriate government
website as an alternative to publication in local news media if the
appropriate government website is accessible to individuals with
disabilities and provides meaningful access to individuals with Limited
English Proficiency. This change makes parts 50 and 58 consistent with
revised Sec. 55.20, which allows public notices required as part of
the 8-step decision making process to be posted on a government website
instead of in a newspaper.

R. Severability

This final rule incorporates a new severability provision in a new
subpart D, at Sec. 55.30. As described in Sec. 55.30, it is HUD's
intent that each provision of this final rule has effect to its fullest
extent permitted by law, including by ensuring the severability of any
provision affected by a judicial order. Should a court find any
specific portion of this final rule unenforceable, the

[[Page 30860]]

remainder of this final rule and its application should remain
effective to the fullest extent permitted by law. Those portions that
are unaffected by any judicial ruling can be implemented by HUD without
a new rulemaking simply to promulgate provisions that are not subject
to a court ruling. For example, this final rule revises standards in
both 24 CFR parts 55 and 200. The administration and workability of
each part are independent; and so, severing a portion of the revision
to one part would not affect the administration and workability of the
revisions in the other part. Similarly, severing one program from the
application of this final rule would not affect the administration and
workability of its application to other HUD programs. As another
example, severing one approach for identifying the FFRMS floodplain
described in Sec. 55.7 would not affect the validity and
administration of the remainder of Sec. 55.7, nor the remaining
portions of this final rule.

S. Tribal Consultation and Stakeholder Listening Sessions

HUD's Government-to-Government Tribal Consultation Policy calls for
consultation with Tribal Nations and Tribal Leaders early in the
rulemaking process on matters that have Tribal implications.
Accordingly, on June 10, 2021, HUD sent letters to all eligible funding
recipients under the Native American Housing Assistance and Self
Determination Act of 1996 (NAHASDA) and their tribally designated
housing entities informing them of the nature of the forthcoming rule
and soliciting comments. This letter announced a 30-day comment period
and a webinar and conference call consultation session regarding the
forthcoming rule. On August 18, 2021, HUD sent a second letter with a
60-day comment period to review an early draft of the proposed
regulatory changes. During this period, HUD held an additional
consultation session via webinar and conference call. This letter was
posted on Codetalk, the HUD Office of Native American Programs'
website, along with an early outline of the rule. During this draft
review period, HUD received one written comment, suggesting that HUD
explicitly recognize the right to Tribal self-governance in part 55.
HUD acknowledges the sovereignty of federally recognized American
Indian and Alaska Native Tribes and is committed to operate within a
Government-to-Government relationship to allow Tribes the maximum
amount of responsibility for administering their housing programs.
Tribes had the opportunity to comment on this rule at the proposed rule
stage.
During the comment period of the proposed rule, HUD engaged in
additional stakeholder outreach through four live listening sessions
held April 17, 2023, May 2, 2023, May 4, 2023, and May 15, 2023. While
all sessions were free and open to the public, local government
officials, Tribal representatives, housing industry representatives,
and the general public each had a session targeted towards their
respective organizations or groups. These sessions were intended as
informative listening sessions in which HUD provided an overview of the
proposed rule and an opportunity for members of the public to comment.
Notes from the listening sessions can be found at <a href="https://www.hud.gov/program_offices/comm_planning/environment_energy/ffrms">https://www.hud.gov/program_offices/comm_planning/environment_energy/ffrms</a>.

T. Delayed Compliance Date

This final rule has an effective date of May 23, 2024; however,
required compliance with this final rule is delayed until June 24,
2024, except: compliance with this final rule's amendments to 24 CFR
part 200 is required for new construction where building permit
applications are submitted on or after January 1, 2025; and compliance
with this final rule's amendments to 24 CFR part 55 is required no
later than January 1, 2025 for the following programs: (1) Programs
subject to chapter 9 of the MAP Guide (Multifamily FHA, Section 202 and
811 capital advance grants, transfers under Section 8(bb) of the United
States Housing Act and Section 209 of HUD's annual appropriations (or
subsequent provisions), Section 8 Renewals with Capital Repairs, RAD
conversions to PBRA, and Green and Resilient Retrofit Program); and (2)
The other mortgage insurance programs subject to part 55 (FHA
Healthcare and FHA Risk Share).
After reviewing public comments, HUD has determined, in certain
instances, to provide a delayed compliance period to allow entities
regulated by this rule a grace period to come into compliance with the
revised requirements. As described, compliance with the amendments to
part 200 of this rule is required for new construction where building
permit applications are submitted on or after January 1, 2025. This
delay is intended to provide home builders ample opportunity to adapt
and prepare for the requirements of this rule, including the increased
elevation standards. Setting a delayed compliance period for the
amended requirements for part 200 is appropriate to address public
comments received expressing concern that the rule could limit the
availability of single family affordable housing. Applications for
single family FHA insurance are submitted to HUD after housing
construction is completed. As a result, for new construction located in
Special Flood Hazard Areas, applications submitted to HUD following
implementation of this rule will be rejected if they do not meet the
elevation requirements in the Minimum Property Standards. HUD is
extending the compliance date for the part 200 revisions to allow time
for housing developers to incorporate the new Minimum Property
Standards into the planning process for new construction.
Similarly, after reviewing public comments, HUD has determined to
provide a delayed compliance period until January 1, 2025, for entities
to come into compliance with the revisions this final rule makes to
part 55 for the following programs: (1) Programs subject to chapter 9
of the MAP Guide (Multifamily FHA, Section 202 and 811 capital advance
grants, transfers under Section 8(bb) and under Section 209 of HUD's
annual appropriations (or subsequent provisions), Section 8 Renewals
with Capital Repairs, RAD conversions to PBRA, and the Green and
Resilient Retrofit Program); and (2) The other mortgage insurance
programs subject to part 55 (FHA Healthcare and FHA Risk Share).
Setting a delayed compliance period for the revised part 55 is
appropriate for these programs to account for the extensive lead time
required for site design, planning, and environmental analysis, all of
which are required prior to submitting an application for FHA mortgage
insurance. Many mortgage insurance projects include large-scale
development that requires significant time and monetary investment in
planning initiatives, thereby requiring a longer compliance period to
incorporate part 55 revisions into the planning process. Additional
programs subject to the MAP Guide have similar project planning
timelines. The delayed compliance period poses limited increased flood
risk for these programs in the interim because the MAP Guide currently
requires elevation to BFE +2 feet for new construction, which is one of
the methods for defining the FFRMS floodplain under this rule.

III. Changes at the Final Rule Stage

In response to comments received during the proposed rule stage of
this rulemaking, HUD is making several revisions to the final rule:
Part 50 (Authority). The final rule revises the authority section
at the beginning of part 50 to update the

[[Page 30861]]

authority of ``42 U.S.C. 4321-4335'' to ``42 U.S.C. 4321-4336e.'' This
change to the citation to NEPA is appropriate because the Fiscal
Responsibility Act of 2023 (Pub. L. 118-5) added additional sections to
NEPA.
Part 55 (Authority). The final rule revises the authority section
at the beginning of part 55 to add the authority 42 U.S.C. 4321 et seq.
This change to include NEPA is appropriate because NEPA requires the
Federal government to act as a ``trustee of the environment'' for
future generations.
Section 55.2. In Sec. 55.2(b)(12), the final rule, in paragraphs
(i)(A) and (i)(B), clarifies that the repair, reconstruction,
modernization, or improvement of a structure includes a manufactured
housing unit. In Sec. 55.2(b)(13), the final rule also removes the
non-exhaustive list of examples of what does not constitute a wetland
because it is not necessary to list things that the definition does not
cover and in order to avoid confusion about certain areas around deep
water aquatic habitats that may be considered wetlands.
Section 55.4. In Sec. 55.4(b), the final rule adds the term ``HUD-
acquired'' to the list of property types to clarify that properties
that had been previously insured by HUD and were then acquired by HUD
through default are also subject to the requirements for notification
to renters when a property is in a floodplain.
Section 55.6a. The final rule adds a new section regarding
severability at Sec. 55.6a, which describes that any portion of this
rule found to be unlawful shall be severable from this rule and the
remainder of the part shall continue to remain effective.
Section 55.7. The final rule adds language to Sec. 55.7(b)(1) and
(c)(1) to clarify when HUD considers data to be available and
actionable to define the FFRMS floodplain using CISA. The final rule
also adds language to 55.7(e) to clarify that CISA must be used for EIS
level projects where available and actionable data exists or can be
generated. Additionally, the final rule adds language to Sec. 55.7(f)
to clarify that HUD and responsible entities may utilize local tools to
implement CISA on a voluntary basis, as long as the resulting elevation
is at least as high as the lowest of (1) the 0.2-percent-annual-chance
flood elevation; (2) the elevation that results from adding an
additional two feet to the base flood elevation; or (3) the elevation
required by paragraphs (b) or (c) of Sec. 55.7, if CISA data is
available and actionable under paragraphs (b)(1) or (c)(1). The final
rule also permits the voluntary use of any particular tool, resource,
or other process that defines the floodplain using CISA that HUD
identifies through guidance.
Section 55.8. In Sec. 55.8(a)(1)(ii), the final rule expands the
scope of activities allowed in the FFRMS floodplain where there is a
floodway onsite to include rehabilitation that does not expand the
footprint of existing buildings or the number of units on the site. In
Sec. 55.8(a)(1)(ii)(B), HUD removed specific examples of de minimis
improvements from the rule. HUD intends to provide more detailed
guidance on de minimis improvements to ensure that only compliant work
is allowable under this part. In Sec. 55.8(a)(2), the final rule
clarifies that certain critical actions may be located in the floodway
if they are functionally dependent and any existing or new structure
has been or will be elevated or floodproofed to the FFRMS elevation for
critical actions; and that certain critical actions may be located in a
coastal high hazard area or LiMWA if they are functionally dependent
and meet FEMA's mitigation requirements for such actions located in the
coastal high hazard area. This section also clarifies that for critical
actions, mortgage insurance on a property containing a floodway may be
exempt from the prohibition in Sec. 55.8(a)(2) if there are no
structures or improvements located in the floodway, and subject instead
to Sec. 55.8(a)(1).
Section 55.9. In Sec. 55.9(a), the final rule makes minimal
changes to align the text of Sec. 55.9(a) with Sec. 55.10.
Section 55.10. In Sec. 55.10(a), the final rule clarifies, through
an added example, that new construction activities for a proposed
project include related activities for any structures or facilities
including the siting of new manufactured housing units.
Section 55.12. The final rule excludes the proposed Sec.
55.12(g)(3) so as to avoid duplication and to better align with both
existing processes and new incidental floodway provisions.
Section 55.13. In Sec. 55.13(e), the final rule clarifies that the
exception to Sec. 55.20 applies to financial assistance to lease an
existing structure and/or units within an existing structure, adds
paragraph (e)(3), which was unintentionally omitted from the proposed
rule and aligns with existing regulatory language, and specifies in
paragraph (e)(3) that the structure should be insured to the maximum
extent available under the NFIP. In Sec. 55.13(f), the final rule
clarifies that the exception applies to special projects for the
purpose of improving the ``energy or water efficiency'' of utilities
rather than the ``efficiency'' of utilities. The final rule excludes
the proposed 55.13(g) exemption to avoid unnecessary duplication. HUD
determined that both the Section 184 Indian Housing loan guarantee
program and the Section 184A Native Hawaiian Housing loan guarantee
program meet the categorical exclusion at 24 CFR 50.19(b)(17), which is
already exempt from part 55 under Sec. 55.12(b).
Section 55.16. In Table 1 to Sec. 55.16, the final rule clarifies
that certain critical actions may be located in the floodway, coastal
high hazard area, and LiMWA, if they meet the requirements for critical
actions in Sec. 55.8.
Section 55.20. The final rule adds a new paragraph (e)(2)(iv) to
Sec. 55.20 to clarify that, if applicable, minimization techniques
include identifying and incorporating FEMA identified Severe Repetitive
Loss mitigation as outlined in Sec. 55.8(c). The final rule also makes
minimal changes to Sec. 55.20(a) to align the language with Sec.
55.10. The final rule also adds nature-based approaches as an
alternative method for avoiding impacts to wetlands and floodplains in
Sec. 55.20(c)(1)(ii). Additionally, the final rule makes other changes
to eliminate redundant language.
Section 55.21. The final rule revises the layout of Sec. 55.21(b)
to improve readability. Additionally, Sec. 55.21(b) adds minimum
requirements for proposed projects to meaningfully reduce flood risk
and increase the overall resilience of the site, including a No-Rise
Certification for any new improvements in the floodway.
Section 55.30. The final rule adds a new section regarding
severability at Sec. 55.30, which describes that any portion of this
rule found to be unlawful shall be severable from this rule and the
remainder of the part shall continue to remain effective.
Part 58 (Authority). The final rule revises the authority section
at the beginning of part 58 to update the authority of ``42 U.S.C.
4321-4335'' to ``42 U.S.C. 4321-4336e.'' This change to the citation to
NEPA is appropriate because the Fiscal Responsibility Act of 2023 (Pub.
L. 118-5) added additional sections to NEPA.
Section 200.926. The final rule removes the proposed revision to
Sec. 200.926(a) that would have applied the elevation standard in
Sec. 200.926d(c)(4)(i) through (iii) to substantial improvement
activities. In response to public comments received, HUD determined to
not include the proposed change to Sec. 200.926(a) in the final rule
to avoid creating adverse impacts on homeowners renovating their
existing single family homes in low-cost areas.

[[Page 30862]]

Section 200.926d. The final rule does not apply Sec. 200.926d
elevation requirements to substantial improvement activities. The final
rule also clarifies that for the elevation certificate required by
Sec. 200.926d(c)(4)(iii), HUD's elevation standard for newly erected
manufactured housing is the standard required in 24 CFR 203.43f or 24
CFR part 3285, as applicable, rather than two feet above base flood
elevation.

IV. Public Comments

This public comments section contains a summary of the public
comments that HUD received in response to the proposed rule.

Specific Questions for Comment From the Proposed Rule

In section III.Q of the proposed rule, HUD included several
specific questions for public comment. Those specific questions from
the proposed rule and public comments received in response to those
specific questions are summarized here, along with HUD's responses to
the public comments received.
A. Question #1: Whether To Prioritize an Alternative Method Among the
Three Approaches To Define the FFRMS Floodplain
1. General Support for the Proposed CISA Approach
Several commenters generally expressed support for HUD's goals
outlined in the proposed rule, such as protecting safety, health and
welfare, preserving natural floodplains, considering environmental
justice impacts, preventing the significant impact of flooding on
underserved communities, and more accurately measuring flood risk. One
commenter emphasized that it was HUD's fiscal obligation to regulate
the FFRMS floodplain using CISA to reduce the Federal government's
fiscal exposure to climate change. Another commenter strongly supported
HUD's assessment to subject more of the floodplain area to the 8-step
decision making process and encouraged HUD to solidify the basic
purpose and guidance in 24 CFR 55.1(a)(5) of the proposed rule. The
commenter emphasized the importance of HUD's commitment because
flooding--even inland flooding--is becoming more frequent across the
U.S. coastline, due to climate change, no matter how it is measured.
Several commenters expressed support for the three-tiered approach
for defining the FFRMS floodplain outlined in the proposed rule. These
commenters also agreed that CISA should remain the primary method for
determining the FFRMS floodplain. Commenters noted a preference for
CISA because it is forward-looking, acknowledges ongoing advances in
climate science, is more dynamic, and provides a more complete picture
of flood risk over the lifetime of a project.
Several commenters also expressed their support for HUD's proposal
to utilize the 0.2-Percent-Annual-Chance Flood Approach and the
Freeboard Value Approach when CISA maps and analyses are not available.
One commenter noted that where CISA floodplains cannot be implemented
in the short- and medium-term, it is important to rely on proven
standards that will give stakeholders tools that are well-understood
and widely available.
Another commenter agreed with HUD that FEMA flood maps are often
out of date and cited the White House Flood Resilience Interagency
Working Group's Federal Flood Risk Management Standard CISA State of
the Science Report in noting that the maps reflect that efforts to
prioritize modernizing and implementing the NFIP are overdue. This
commenter believed that the latest science on flood risk hazards
demonstrates that there is sufficient data to regulate the FFRMS based
on climate science and that it is critical the Federal government do so
when the data are available in order to prevent risky planning and
investment decisions.
One commenter emphasized that they support HUD's CISA-centered
approach because it is likely that FEMA's 1-percent-annual-chance flood
hazard measurements underestimate the number of assisted housing units
within those areas. This commenter encouraged HUD to use CISA to the
maximum extent possible. Another commenter agreed that continuing to
use the 1-percent-annual-chance or even the 0.2-percent-annual-chance
floodplain in place of CISA is irresponsible especially given HUD's
mission of serving low-income families who are particularly ill-
equipped to recover from flood-related hardships.
One commenter supported HUD's three-tiered approach prioritizing
CISA, and added that since flood elevations are not static, a
cautionary statement of reviewing the characteristics of flooding
(velocity, debris, and flashiness) should also be considered for all
proposals. Another commenter emphasized that no matter what approach
was ultimately taken, it is important to streamline the FFRMS
floodplain determination process and limit room for conjecture.
One commenter urged HUD to go further in its rule by requiring the
evaluation of potential flooding throughout the design lifetime of
structures using the best available risk modeling and science. This
commenter said HUD should require project plans to account for expected
flood heights and other mitigation measures. Another commenter
requested HUD consider at minimum a 50-year projection for CISA and
suggested HUD project larger floodplains because of the time necessary
for climate instability to manifest. Another commenter recommended HUD
use the same lower level of risk tolerance for critical and non-
critical actions, arguing that the Federal government has a moral
imperative to safeguard new and updated affordable housing by ensuring
affordable housing can withstand climate change.
Several commenters asked HUD to incorporate some clarity in its
final rule surrounding the meaning of ``anticipated life of the
project.'' One commenter noted that it is not unusual for projects to
extend beyond their anticipated life for years or even decades and that
a project's extended life could impact the elevation for which they
should be designed. Another commenter asked that HUD require CISA
criteria to be extended over the entire life of a project--a minimum of
50 years, which is the length of time used for most building life cycle
assessments.
HUD Response: HUD appreciates the support from commenters for HUD's
goals outlined in the proposed rule. HUD disagrees that it is our
fiscal obligation to regulate using CISA; however, we agree that it
should be used as the preferred approach where data is available and
actionable. HUD developed the three-tiered approach to defining the
FFRMS floodplain with the intent to be more forward-looking and
acknowledge that being flexible is necessary as science advances to
best achieve the outlined goals. HUD appreciates commenters' feedback
regarding the use of a multi-tiered approach and the importance of
using proven standards when CISA is unavailable. HUD also appreciates
the commenters' support that a wider floodplain area be considered in
the 8-step decision making process, though HUD disagrees that this
needs to be stated in 24 CFR 55.1(a)(5) because HUD considers the
existing language sufficient and effective.
HUD also appreciates the commenters' considerations that FEMA FIRMs
are static and based on a snapshot of data in time. HUD believes that
its preferred approach, CISA, provides a significant advantage to
provide future flood risk management.

[[Page 30863]]

HUD intends to publish guidance to help grantees choose appropriate
design life horizons to utilize CISA effectively. The goal is for the
chosen design life to protect the Federal investment throughout the
anticipated life of the project without overly burdening projects with
unreasonable elevation requirements. HUD notes that critical actions
are given additional mitigation requirements as per the instructions in
the Guidelines which ask Federal agencies to use higher standards for
critical actions due to their more sensitive nature. This higher
standard was considered too economically burdensome to impose on all
projects with lower inherent risk, so it was not imposed for all
activities. HUD intends that this rule will help protect Federal
investments against future flood risk.
2. Concerns Regarding the Proposed CISA Approach
Several commenters also wrote in with concerns about HUD's approach
for defining the FFRMS floodplain in its proposed rule.
a. Burden and Uncertainty
One commenter stated that the three-tiered definition of FFRMS
floodplain was too confusing and burdensome. This commenter noted that
establishing whether an action was in a floodplain or not is a critical
first step in HUD's regulatory process given that if the action does
occur in a floodplain, additional analysis and mitigation requirements
are triggered. The commenter went on to say that without established
floodplain maps, stakeholders will have a difficult time completing
this first step and these material unknowns and uncertainties will
generate increased project delays, increased project costs, and
increased project cancelations--all at the expense of much-needed
housing.
One commenter was specifically concerned with the horizontal
floodplain definition. The commenter stated that FEMA's FIRMs are well-
established and have clearly depicted the 1-percent-annual-chance
floodplain in most communities across the Nation to the extent that
many Federal, State, and local regulations are tied to the 1-percent-
annual-chance floodplain. FEMA's maps regularly provide certainty to
property owners to know when and where they must comply with a
multitude of rules, codes, ordinances, and grant conditions.
HUD Response: HUD appreciates the commenters' feedback regarding
the potential complexity of the tiered approach outlined in the
proposed rule. As described earlier in this preamble in section II.B.,
the tiered approach to defining the FFRMS floodplain provides
sufficient direction to grantees and applicants on how to determine if
a project is located in the FFRMS floodplain based on data
availability. Moreover, HUD intends to roll out ample training and
technical assistance with this rule to ensure that grantees are well
prepared to execute compliant environmental reviews. With training and
assistance, HUD is confident that grantees will be able to navigate the
process and avoid unnecessary negative effects on project timelines.
This training will also help grantees work with their builders and
avoid uncertainty associated with projects located in the FFRMS
floodplain.
b. Local Data
Several commenters noted that some communities lack local, State,
or Federal elevation data to establish the FFRMS floodplain with any of
the three methods outlined in the proposed rule. These commenters
suggested that this lack of available data could discourage developers
and disproportionately impact rural communities that already have a
lack of affordable housing. One commenter noted specifically that
professional surveyors will not generally provide the 0.2-percent-
annual-chance flood elevation without a formal flood study, which is
not only very expensive but is also time-consuming. This commenter
urged HUD to consider an alternative elevation for use in these
circumstances. Another commenter also noted the expense of land surveys
and the resulting decrease in housing that may result.
Conversely, one commenter noted they have created their own mapping
tools to evaluate flood risk. This commenter is hoping to be able to
continue using their tools and would like HUD to provide an approval
process for using them. This commenter reiterated that one of HUD's
stated goals is to better align with local standards that have already
been strengthened and to take ``a flexible approach to adapt to the
needs of . . . the local community.'' Commenters asked HUD to provide
up to date maps and data to local communities and asked HUD to model
FFRMS requirements after local codes.
One commenter hoped the FFRMS rule would encourage partnerships at
all levels of government to adopt floodplain management policies.
Another commenter suggested that HUD collaborate with state-level data
providers to ensure that local data products meet CISA requirements and
receive HUD approval. One commenter used the fact that many localities
have made significant investments in ``down-scaled'' mapping of future
flood risk as evidence that the availability of technically credible
data on future flood risks has developed significantly since HUD's last
proposed rule.
Another commenter urged HUD to incorporate local data that
considers climate change by considering flood risk information
available in each State's Hazard Mitigation Plan.
HUD Response: HUD appreciates the commenter's concerns regarding
the availability of data in some communities. HUD understands that
there are existing data limitations in some communities, particularly
in rural areas, where FEMA mapping is unavailable. This rule does not
change the current process and allows communities to utilize flood and
elevation studies or best available data, including anything relevant
from hazard mitigation plans, to proceed with their floodplain
determination. Therefore, where FEMA FIRMs are not available, this rule
has no impact on the current part 55 process to utilize best available
information and would not have major cost impacts in those areas. The
Regulatory Impact Analysis (RIA) did not offer evidence that the cost
of surveys would have a significant impact on housing supply. Given the
diversity of geography and data for HUD projects, HUD cannot set a
standardized baseline elevation for all projects and instead must rely
on a project-by-project approach.
As described earlier in this preamble, HUD appreciates that some
State, Tribal, and local governments have created CISA tools capable of
determining the extent of the FFRMS floodplain in their respective
jurisdictions. As such, HUD has adjusted the language of this rule to
voluntarily permit the use of local tools where they result in an
elevation at least as high as the lowest of (1) the 0.2-percent-annual-
chance floodplain elevation; (2) the elevation that results from adding
an additional two feet to the base flood elevation or (3) the elevation
required by paragraph (b) or (c) of Sec. 55.7, if CISA data is
available and actionable under paragraphs (b)(1) or (c)(1). While HUD
will not model the FFRMS floodplain around local code requirements
because it would lead to uneven protection standards nationwide, this
change will better recognize the efforts many localities have made to
address their own climate risks.
As part of the White House Flood Resilience Interagency Working
Group helping to develop CISA tools nationwide, HUD appreciates the
sentiment of commenters who wish to

[[Page 30864]]

encourage intergovernmental partnerships to adopt floodplain risk
management policies. HUD relies on the Federal science agencies like
FEMA and NOAA to work with their local partners to obtain accurate
local flood risk data for use in their development of tools which may
be used to implement CISA, as well as other FFRMS approaches. HUD is
also open to coordinating with state-level providers on a project-
specific basis as needed.
c. Federal CISA Implementation Tools
Several commenters agreed that, though they support forward-looking
risk projections that consider climate change, it is premature to rely
on CISA maps with national coverage, which may take years to develop.
One commenter suggested that without stakeholder approval and practical
application of tools, any proposed higher elevation requirements may be
too severe and result in unintended, adverse consequences. Another
commenter noted the opposite concern, that while CISA maps are being
developed, older maps will need to be relied upon, which are
insufficient. This commenter also noted that no funding is attached to
HUD's proposed rulemaking.
One commenter stated that because a BFE based on CISA data cannot
be used if the elevation is lower than the current FIRM or FIS and
because there may be other environmental disclosure rules regarding
climate flooding risk, this multilayered approach, reliant on maps that
are not yet available, would create an impractical and untenable level
of uncertainty for builders and developers. The commenter urged HUD to
withdraw the proposed rule until maps of the floodplains were available
and to release a CISA tool for public comment on the data, methodology,
functionality, accuracy, and user friendliness of the model before it
is implemented. The commenter also recommended the rule be subject to
peer-review. If not, they predicted builders would have to do a lot of
research and expend resources trying to determine if they were in a
floodplain.
One commenter emphasized the complexity of developing a CISA
mapping tool and recommended that HUD provide additional clarification
on what process it will use to approve maps developed using CISA. The
commenter suggested that this proposed rule should have focused more on
the development of the mapping tool, and HUD may need to issue a
separate notice seeking comment from the public on the tool's
development given the complexity of the development process.
Specifically, the commenter recommends HUD seek input from stakeholders
and industry participants, as their input is critical for the tool's
eventual success.
Several other commenters also requested the opportunity to provide
feedback on CISA maps. One commenter noted that they would like to
provide further comment on a focused handful of HUD's actionable
modeling criteria. Other commenters asked whether CISA maps would be
available for stakeholders to identify the FFRMS floodplains and
whether HUD would require approval for a process that would result in
FFRMS floodplain boundaries different than what a user would generate
using CISA mapping. These commenters also asked who would approve CISA
maps and by what process and what qualifications HUD's approver would
have to determine the CISA maps' sufficiency.
Another commenter noted that it is critical for HUD to define the
specific circumstances in which it will approve CISA maps. While the
commenter stated that might be best done in guidance, they emphasized
that HUD's final rule must define some ``high-level guardrails'' as
well. The commenter suggested the following guardrails: (1) all maps
must, at a minimum, be consistent with current CISA guidelines issued
by the Water Resources Council,\34\ National Climate Task Force, or
equivalent Federal authority and (2) HUD should state clearly that it
reserves the authority to deny or revoke approval of CISA maps for any
reason.
---------------------------------------------------------------------------

\34\ HUD notes that these CISA guidelines are the same
Guidelines discussed in the Background section of this preamble,
available at <a href="https://www.fema.gov/sites/default/files/documents/fema_implementing-guidelines-EO11988-13690_10082015.pdf">https://www.fema.gov/sites/default/files/documents/fema_implementing-guidelines-EO11988-13690_10082015.pdf</a>.
---------------------------------------------------------------------------

Other commenters agreed that the proposed rule cannot be fully
evaluated without CISA mapping being available for review and that it
should not be implemented before the public can review the CISA mapping
tools and provide comments. One commenter asked when the tools would be
available to make nationwide determinations. Other commenters asked
whether there will be a process for the public to refute the CISA maps.
One commenter emphasized the need to analyze granular property-
specific data, including structure-specific identifications, first-
floor height (FFH) assessments, and 1-meter digital elevation model
data, in order to develop a reliable flood risk model. This commenter
recommended that HUD use its co-chair position on the National Climate
Task Force's FFRMS Science Subgroup to advocate for the addition of
`granular' as a necessary characteristic for ``best available data and
science.''
One commenter requested that HUD develop its CISA maps with the
following in mind to ensure they are developed properly: use currently
established catastrophe models that have been recognized by State
agencies and insurance commissions; do not extrapolate results; do not
downscale data except through dynamic downscaling; do not rely on
steady-state assumptions of the future; and display information on
uncertainty and provide understandable outputs. The commenter
emphasized that adoption by standard-setting organizations demonstrates
model reliability as does peer-review. To that end, the commenter asked
HUD to clarify what standard of peer-review would be effective and to
follow up to confirm this standard has been met.
One commenter asked if CISA flood risk areas would be publicly
available online. This commenter encouraged the development of a
singular, publicly available website that reflects FFRMS approved
methodologies.
Several commenters expressed concern about how HUD's CISA maps will
be kept up to date. Commenters noted that these forward-looking maps
should be required to be updated regularly as more data becomes
available. Another commenter asked whether there will be a budget to
make sure the CISA tool remains up to date.
One commenter requested HUD rename CISA to CISA-F to avoid
confusion with another Federal tool called CISA for the Critical
Infrastructure Act.
HUD Response: As described earlier in this preamble in section
II.B., CISA is the preferred approach to define the FFRMS floodplain
and HUD intends to require use of CISA where data is available and
actionable. HUD agrees that it is premature to rely entirely on the
CISA standard which is why HUD proposed CISA as the preferred of three
methodologies to define the FFRMS floodplain. HUD recognizes that CISA
data is not currently available nationwide via a Federal CISA
implementation tool and therefore HUD has adjusted the language of this
rule to allow, but not require, the use of State, local, or Tribal CISA
data if they are available and actionable, as defined in Sec. 55.7.
HUD notes that while it cannot make funding explicitly available for
this rule as no congressional appropriation has been made available to
do so, many HUD programs do allow funding to be used for mitigation
activities such as elevation and flood resilience efforts.

[[Page 30865]]

HUD made the proposed rule available for both public comment and
comment through interagency review. Through the proposed rule, the
public had opportunity to comment on, for example, whether the FFRMS
floodplain should be defined using CISA where data is available. HUD
received numerous comments on utilizing CISA to determine the FFRMS
floodplain and other topics. As discussed more thoroughly elsewhere in
this final rule, the public also had opportunity to comment on the use
of CISA outside of this rulemaking through the guidelines.
HUD intends to release subregulatory guidance to help communities
better understand the CISA process and how they can use acceptable
tools to map the FFRMS floodplain. While HUD will not be releasing any
CISA maps of its own, HUD does intend to accept maps, tools, or
resources developed through Federal or local CISA data, when that data
is available and actionable, as long as those maps, tools, and
resources meet the requirements outlined in Sec. 55.7(b), (c), and
(f).
HUD disagrees that the proposed rule could not be evaluated or
reviewed without CISA mapping being available. The concept of CISA and
associated data is well established, as outlined in the FFRMS, the
Guidelines, and the White House State of the Science Report, for
instance.\35\ The public has accordingly had opportunity to comment on
CISA generally as well as its specific proposed use in topics addressed
by this rule. The FFRMS and Guidelines, which were subject to public
notice and comment, provided a method for considering CISA for coastal
flood hazards that takes into account regional sea-level rise
variability and service life of the project. Using CISA to define the
FFRMS floodplain provides a forward-looking approach to flood risk
management. Available and actionable CISA data is currently most
readily available along the coasts in areas with the highest risk of
flooding and, in accordance with E.O. 13690 and E.O. 11988, HUD is
directed to utilize the best-available and actionable data to protect
Federal investments. Where CISA data isn't available or actionable, HUD
has provided additional acceptable processes to define the FFRMS
floodplain including the 0.2-percent-annual-chance flood approach and
the FVA.
---------------------------------------------------------------------------

\35\ See <a href="https://www.whitehouse.gov/wp-content/uploads/2023/03/Federal-Flood-Risk-Management-Standard-Climate-Informed-Science-Approach-CISA-State-of-the-Science-Report.pdf">https://www.whitehouse.gov/wp-content/uploads/2023/03/Federal-Flood-Risk-Management-Standard-Climate-Informed-Science-Approach-CISA-State-of-the-Science-Report.pdf</a>.
---------------------------------------------------------------------------

HUD appreciates the commenter's thoughts regarding the need to
analyze granular property-specific data and encourages grantees to
utilize best-available data when complying with this rule. HUD notes
that its outlined CISA approach for identifying the floodplain is
consistent with the recommended approach from the Water Resources
Council Guidelines.\36\
---------------------------------------------------------------------------

\36\ HUD notes that these CISA guidelines are the same
Guidelines discussed in the Background section of this preamble,
available at <a href="https://www.fema.gov/sites/default/files/documents/fema_implementing-guidelines-EO11988-13690_10082015.pdf">https://www.fema.gov/sites/default/files/documents/fema_implementing-guidelines-EO11988-13690_10082015.pdf</a>.
---------------------------------------------------------------------------

HUD disagrees that renaming CISA to CISA-F is necessary to avoid
confusion and suggests that grantees use context to help differentiate
between the acronyms.
d. 0.2-Annual-Chance-Flood Approach (500-Year Floodplain Approach)
Several commenters had concerns about limitations to the 0.2-
percent-annual-chance flood approach. Several commenters pointed out
that FEMA maps do not usually provide an elevation for the 0.2-percent-
annual-chance floodplain. One commenter noted that FEMA does not
regularly produce maps that incorporate wave modeling, which makes it
difficult to plan projects and for residents to understand how
regulations may impact their homes. This commenter encouraged HUD to
work with FEMA to incorporate wave modeling in its 0.2-percent-annual-
chance floodplain maps.
One commenter asked that HUD's final rule clearly define what 0.2-
percent-annual-chance floodplain can be used, wondering whether its
limits need to contain the structure, be within the subject property
parcel, or be within 500 feet of the nearest structure. Several other
commenters wondered what data would be used to determine the 0.2-
percent-annual-chance floodplain.
One commenter asked if the addition of 2 or 3 feet to existing BFE
to calculate a revised flood hazard area and flood elevation results in
any changes to the extent of area considered seaward of the LiMWA. This
commenter asked that the 0.2-percent-annual-chance flood method reflect
the potential of the LiMWA to shift, as a result of sea level rise.
One commenter worried that the effects of using the 0.2-percent-
annual-chance floodplain for properties with no known or previously
occurring flood risk would reduce density and property values.
One commenter asked HUD to clarify if the 5/8-step process would be
triggered by improvements in a 0.2-percent-annual-chance floodplain,
and asked HUD to make the FFRMS guidance clear.
HUD Response: HUD appreciates the commenter's feedback regarding
the limitations of the 0.2-percent-annual-chance flood approach. When
the FEMA-mapped 0.2-percent-annual-chance floodplain is unavailable, or
when, for critical actions, the FVA approach is higher, HUD would allow
the FVA to be utilized.
In coastal areas, actionably accurate wave models can be difficult
and expensive for jurisdictions to obtain. HUD would generally agree
with the commenter that including wave modeling in coastal area flood
maps is beneficial to accurately depicting flood risk which is why the
CISA method is preferred. HUD will continue to work with its Federal
partners to support their efforts toward increasing availability of
mapping and modeling in coastal areas so that the best available data
may be utilized for HUD projects.
For the 0.2-percent-annual-chance flood approach with non-critical
actions, the final rule requires that the FEMA-mapped 0.2-percent-
annual-chance floodplain must be utilized to determine if the structure
is within the floodplain of concern. Additional technical assistance
and guidance will be released alongside the rule to help grantees and
practitioners make appropriate determinations for their projects and
help them understand when the 8-step decision making process is
required. As the 0.2-percent-annual-chance floodplain is not based on
climate informed data but on current FEMA mapping, it would therefore
be unable to account for sea level rise over time. Additionally, HUD
notes that the rule does not change the FEMA-defined Base Flood
Elevation.
The RIA found no evidence that the 0.2-percent-annual-chance flood
approach would reduce property values and HUD expects any density loss
to be intentional based on the goal of reducing flood risk.
e. Freeboard Value Approach
Several commenters encouraged HUD to adopt the FVA as the primary
approach for defining the FFRMS floodplain. Several commenters
recommended use of the FVA over CISA because CISA mapping is not
available for public review and the public has not been provided
adequate information to assess its impacts and implications. One
commenter suggested the NEPA process cannot be completed correctly
using CISA maps. One commenter concluded that given the uncertainties,
relying on the FVA would be most likely to ensure

[[Page 30866]]

reliable and consistently documented building elevations.
Another commenter reasoned that FVA is the most accurate method of
identifying flood risk and would be the most efficient use of
government resources. Additionally, the commenter said FVA could be
even more protective by adding two or three feet to the base flood
elevation. This commenter urged HUD to consider further research into
the FVA to compare the flood resiliency of HUD projects built to this
increased standard to those that were not and into the possible
benefits of using information in State Hazard Mitigation Plans.
Other commenters supported the FVA over the 0.2-percent-annual-
chance flood approach because many sites do not have the 0.2-percent-
annual-chance floodplain mapped and using the FVA across the board
would result in a more consistent approach. Another commenter agreed
that FVA is familiar to most stakeholders and supported its continued
use given that it was HUD's previously selected method in 2016.
One commenter supported the inclusion of the horizontal floodplain
when using the FVA.
Several commenters critiqued the requirement to add three feet to
the BFE for critical actions, regardless of known or previous flood
risk, and predicted this would lead to a reduction in density, higher
costs, higher rents, and lower valuation of properties.
One commenter asked how the FVA method would account for high
hazard areas that are subject to sea level rise and concurrent land
subsidence.
HUD Response: HUD disagrees that the FVA should be utilized as the
preferred approach to defining the FFRMS floodplain. While the FVA
provides a beneficial fallback option when CISA and the 0.2-percent-
annual-chance flood approach are unavailable, it does not account for
sea level rise and the rising risk of flooding over time. The 0.2-
percent-annual-chance flood approach is preferred to the FVA as it
allows grantees to utilize existing tools to visually display the more
protective horizontal extent of the floodplain. As stated earlier in
section II.B., HUD requires that the FFRMS floodplain be defined using
CISA where data is available and actionable, as it is the most
scientifically accurate in providing impacts to the floodplain from
climate change. As described in Sec. 55.7, HUD considers CISA data to
be available and actionable for a particular project where: (1) the
data is included in a tool, resource, or other process developed or
identified by a Federal agency or agencies to define the floodplain
using CISA, and (2) HUD has adopted the particular tool, resource, or
other process through a Federal Register notice for comment.
HUD disagrees that utilizing FVA as the preferred approach would be
the most efficient use of government resources. HUD believes that the
additional resilience provided by utilizing the hierarchy of CISA, then
0.2-percent-annual-chance flood approach, and finally FVA provides for
a more resilient and effective use of resources than using a single
approach across the board.
HUD appreciates the commenter's support for the inclusion of the
added horizontal area under the FVA approach.
E.O. 13690 directs HUD to elevate critical actions at least three
feet above freeboard value when using the FVA regardless of any
previous flood risk at the site. While the FVA does not necessarily
consider climate change because it is based on FEMA mapping of the BFE,
a Federal tool for CISA is expected to be available in coastal and
high-risk areas in FY24. As HUD's preferred methodology, CISA will
better be able to account for sea level rise over time than other
methodologies, even if they are more protective than current standards.
3. Other Alternative Approaches
One commenter suggested that HUD should consider looking to nearby
areas that do have CISA resources available rather than solely relying
on the two alternative approaches in the proposed rule.
One commenter requested certain public facilities such as fire and
police stations, emergency medical facilities, and schools be given a
heightened level of protection, and that HUD could look to more
stringent standards for such structures from other entities.
One commenter asked HUD to reconsider using Advisory Base Flood
Elevations (ABFE) to assess risk. ABFEs established after major flood
events are often much higher than the 0.2-percent-annual-chance flood
elevation, thus ABFE may result in situations where development would
be required to elevate well above what the other proposed approaches
would require. The commenter asked HUD to exclude ABFE from
establishing elevations though, as it may not represent the true
floodplain and could result in excessive fill or loss of opportunities
to develop affordable housing.
One commenter noted that 0.2-percent-annual-chance floodplain
elevation is not noted on FIRMS, which could lead to subjective
elevation determinations by the technical experts required.
Another commenter recommended a new approach entirely, given that
FEMA FIRM maps fail to account for forward-looking climate change and
are not necessarily reliable with respect to historical flood risk
either.
HUD Response: HUD agrees with the commenter and has revised the
language of the rule at 24 CFR 55.7 to clarify that it permits a
responsible entity to voluntarily define the FFRMS floodplain utilizing
CISA when a State, Tribal, or local government has formally adopted,
through code or other formal adoption measures, a tool, resource, or
other written standards that provide data or other methods to identify
the FFRMS floodplain using CISA for a particular project. HUD also
notes that critical actions require a higher standard of protection, as
their definition indicates, due to the potentially extreme impacts of
flooding.
HUD believes that use of interim flood hazard data such as ABFEs is
acceptable and that they can provide a realistic picture of the true
floodplain when drawn by FEMA. While FEMA does not yet have
comprehensive coverage of elevations on the 0.2-percent-annual-chance
floodplain published maps, grantees will have the option of utilizing
the FVA or calculating the 0.2-percent-annual-chance elevation when
those elevations are unavailable from FEMA sources.
4. Questions About the Proposed CISA Approach
One commenter asked how maps would address the unpredictability of
elevation sinking and if the maps would be adjusted yearly. Another
commenter asked how HUD will decide what FIRM to go by and how a lender
can be assured that the benchmark is accurate. This commenter also
asked what happens when the FIRM is changed. Other commenters asked if
flood studies would be required if there was insufficient information
to establish FFRMS floodplains with one of the three approaches.
One commenter asked HUD to confirm whether the new rules apply to
existing HUD-insured projects or federally funded projects seeking
refinancing or acquisition and to detail all HUD Multifamily Housing
programs that are expected to comply with this new guidance or any
exceptions that make projects exempt or require compliance with these
new rules.
HUD Response: HUD intends to provide additional guidance to
grantees and practitioners to help them understand what options are
available

[[Page 30867]]

when none of the three approaches have sufficient information to
establish the FFRMS floodplain. Generally, HUD will rely on project-by-
project technical assistance to help grantees find and utilize best
available data to make their determinations. HUD believes that CISA
tools will be regularly updated with best available climate and
topographic data as outlined in the FFRMS CISA State of the Science
Report.
HUD intends that the CISA provisions of the final rule will apply
to any project funded by programs subject to part 55 review, including
Multifamily FHA programs, in accordance with the compliance dates
described in the Compliance Date section of this final rule.
B. Question #2: Whether HUD Should Define the FFRMS Floodplain for Non-
Critical Actions as Whichever Is Lower Between the 0.2-Percent-Annual-
Chance Floodplain or the Base Flood Elevation Plus Two Feet of
Freeboard, Where CISA Resources Are Not Available
1. Support for HUD's Proposed Standard
Several commenters expressed support for whichever approach would
offer the most protection when CISA is not available. Several of these
commenters emphasized that the alternative proposed in Question #2
could significantly reduce flood resilience in some areas especially
given that flood events are likely to become deeper and more frequent
and because livelihoods, resident health, and safe homes are at stake.
Another commenter said that any reduced short-term cost in using the
less stringent approach would come at greater long-term expenses and
would run counter to the risk management approach identified by the
Government Accountability Office. The commenter also noted that models
may underrate flood risk and the more protective approach is justified
by the precautionary principle.
Another commenter urged HUD to consider collaboration with other
agencies to gather data for critical actions in the proposed FFRMS
floodplain.
HUD Response: HUD appreciates the feedback from commenters
regarding the need for higher elevation standards and protections as
flood events worsen due to climate change. The intent of HUD's
preference for the CISA option is to be more proactive and protective
as flood risks increase over time and to use the best science available
at the time the project is considered. HUD believes that the process
for using the 0.2-percent-annual-chance flood approach or the FVA when
CISA is not available or actionable provides a protective and efficient
process that is not only more likely to provide a more protective
approach but also reduce administrative burden (e.g., comparison
between the 0.2-percent-annual-chance flood approach and FVA
elevations).
For critical actions, where comparison between the 0.2-percent-
annual-chance flood approach and the FVA +3 feet elevations is
necessary, HUD believes the extra analysis is warranted to ensure more
protection for those actions for which any risk of flooding is simply
too great. HUD is also supportive of further collaboration with other
agencies to analyze data on critical actions as it becomes available.
2. Support for the Lower Standard
Several commenters asked HUD to allow for the lower standard for
non-critical actions. These commenters were concerned about
incentivizing excessive fill in 0.2-percent-annual-chance floodplains.
Several commenters suggested that the FVA method should take
preference over the 0.2-percent-annual-chance flood approach as it is
easier to calculate. Some of these commenters went onto suggest that a
site-specific flood study would be the best option.
HUD Response: HUD disagrees with commenters' feedback that lower
standards should be used for non-critical actions. Since flood risks
are increasing as a result of climate change and associated sea level
rise, lowering the current regulatory standard on top of this increased
risk would create an exponentially riskier environment for Federal
investments and go against HUD's stated goals. HUD also disagrees that
higher standards create incentive for fill as elevation does not
necessarily require fill. In fact, the rule no longer provides an
exemption for LOMR based on fill, further disincentivizing its use.
HUD disagrees that the FVA method is easier for grantees and
practitioners to calculate than the 0.2-percent-annual-chance flood
approach. The 0.2-percent-annual-chance floodplain is mapped by FEMA
and where it is available for non-critical actions, grantees would not
need to calculate anything. While HUD agrees that site-specific flood
studies can be helpful, requiring them for all projects would be
prohibitively expensive.
C. Question #3: Whether, and Under What Conditions, Part 55 Should
Permit HUD or the Responsible Entity To Rely on the FFRMS Floodplain as
Defined by Another Federal Agency
1. Support for Alignment With Other Agencies
Several commenters supported HUD using FFRMS boundaries established
by other agencies to reduce redundancy in Federal oversight. These
commenters also requested a process by which a stakeholder could
request a reconsideration of HUD's floodplain boundaries.
Several commenters urged a cohesive and consistent Federal vision
when there are multiple flood risk related efforts occurring
simultaneously to avoid conflicting standards and potential
noncompliance. One commenter noted the weaknesses inherent in not
having a comprehensive nationwide approach to defining floodplains.
This commenter encouraged HUD to include requirements for tracking the
location and quantity of developments in floodplains as part of its 8-
step decision making process. The commenter urged collaboration among
Federal agencies to track and quantify the effectiveness of E.O. 11988
and E.O. 13690. Specifically, this commenter recommended that Federal
agencies collaborate with the National Floodplain Functions Alliance.
One commenter suggested Federal agencies align their resilience and
disaster response policies, including building codes and elevation
requirements.
One commenter expressed support for a process whereby a project's
lead Federal agency's implementation of FFRMS is sufficient for the
entire project, as long as such approach looked at long-term risks.
More broadly, several commenters asked that HUD participate in
collaboration with other agencies, affiliations, and interagency
groups.
Several commenters stated that the Federal Interagency Floodplain
Management Task Force (FIFM-TF) is an existing interagency body to
facilitate collaboration and ensure that all agencies are using a
forward-thinking, climate-informed approach. One commenter noted that
HUD should rely on FIFM-TF policies, as long as its deliberations are
more transparent and accessible to interested non-Federal stakeholders.
This commenter suggested that since various Federal agencies have
developed tools, data, and expertise, that collaboration would lead to
more consistent CISA floodplain definition methods.

[[Page 30868]]

Several other commenters endorsed HUD's cooperation with the White
House Flood Resilience Interagency Working Group. Some of these
commenters said HUD should prioritize funding and interagency
coordination, including continued participation in this working group.
One commenter was concerned that the working group would not have
enough resources available to accurately identify flood risks
throughout the country. Another commenter asked who in this working
group is preparing the CISA tools and whether they have any conflicts
of interest between potential consultants working on these resources.
Several commenters urged HUD to rely on FEMA and its flood-risk
data and to engage with FEMA to ensure complementary approaches as the
agencies implement FFRMS through rulemaking. Another commenter
emphasized that FEMA has spent billions of dollars on flood engineering
studies and that adopting an alternative flood map dataset would waste
previous Federal investments. The commenter went on to say that other
entities, such as States, cities, and communities, have come to rely on
FEMA's flood map data for various purposes. Another commenter noted
that because FEMA is actively working to incorporate climate risk and
future conditions into its data and mapping program, HUD should delay
finalizing the proposed rule and continue to rely on FEMA's flood risk
and mapping tools until its formal release of climate-informed flood
risk data and flood maps.
One commenter supported coordination between HUD, FEMA, USACE, and
other agencies to consistently articulate flood risks and best
practices. This commenter reasoned that a comprehensive Federal
narrative would allow for consistency and transparency for owners,
local decision makers, and regulators as opposed to the current
contradicting flood risk identification efforts.
One commenter suggested that HUD align its disaster recovery and
mitigation construction standards with FEMA's Building Resilient
Infrastructure and Communities and Public Assistance Programs, which
have been successfully implemented for several years. The commenter
said that adopting the flood provisions captured in modern building
codes consistently across like programs would help the Federal
government reduce complexity and increase programmatic efficiency.
One commenter asked that HUD share what it learns from developing
CISA mapping tools with other Federal agencies.
HUD Response: HUD's outlined process in the rule requires the use
of Federal CISA data where available and actionable, as described in
Sec. 55.7, or permits the voluntary use of formally adopted local CISA
data, as described in Sec. 55.7(f). A Federal agency tool is being
developed by the Council on Environmental Quality (CEQ), the Office of
Science and Technology Policy (OSTP), FEMA, NOAA, and HUD with input
from the White House Flood Resilience Interagency Working Group and the
FFRMS Science Subgroup. The Science Subgroup of the White House Flood
Resilience Interagency Working Group has found that accounting for sea
level rise in the coastal environment represents available and
actionable data to help identify the CISA floodplain. The White House
Flood Resilience Interagency Working Group has developed a job aid to
help agencies identify the floodplain using the three approaches.\37\
This job aid will help provide consistency of FFRMS application across
the Federal Government.
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\37\ See <a href="https://www.fema.gov/sites/default/files/documents/fema_ffrms-floodplain-determination-job-aid.pdf">https://www.fema.gov/sites/default/files/documents/fema_ffrms-floodplain-determination-job-aid.pdf</a>.
---------------------------------------------------------------------------

Where Federal CISA data is not available and actionable, as
provided in Sec. 55.7, and grantees or practitioners use local, State,
or Tribal CISA data, the 0.2-percent-annual-chance flood approach, and/
or FVA, there may be some variation in the exact horizontal and
vertical extents of the FFRMS floodplain depending on the approach that
is utilized. HUD does not believe that these variations are likely to
be significant and further believes that minor floodplain variation is
worth the greater protection that the methodology in HUD's rule
provides. HUD's rule does not define the boundary of the floodplain,
only a methodology for determining where that boundary is. HUD does not
intend to implement a formal process to contest the methodology used to
define the floodplain at this time but will continue to monitor and
make changes to policy, as necessary, to ensure effective determination
of the FFRMS floodplain.
HUD agrees with the commenter that Federal disaster response
policies, inclusive of their floodplain management policies, should be
complementary and cohesive. As such, HUD drafted this rule to align
with the E.O. 13690 guidance. Additionally, HUD appreciates the
commenter's encouragement for HUD to continue cooperating with the
White House Flood Resilience Interagency Working Group.
HUD's Federal partners are also engaging in rulemaking to update
FFRMS floodplain requirements to comply with E.O. 13690. HUD cannot
wait for these other agencies' rules and must act to protect its own
investments which are otherwise at risk. However, each agency,
including HUD, is developing these regulations with feedback provided
through a required interagency review process which occurs prior to
publication of any proposed and final rulemaking.
In cases where a Federal project is funded by multiple Federal
funding sources, HUD plans to utilize the Unified Federal Review (UFR)
to assist in the collaborative cross-agency/Department discussions to
resolve compliance issues and ensure cohesion in project funding and
goals. Additionally, HUD has procedures in place to adopt the
environmental reviews of other Federal agencies to avoid unnecessary
duplication of effort.
HUD supports its interagency partners and is always looking for new
opportunities to work with other industry leaders in addition to other
Federal agencies. While HUD agrees with the general sentiment behind
adopting resilient building codes, HUD does not believe this rule is
the proper place to include them.
2. Concerns With Relying on Other Agencies To Define the Floodplain
Several commenters expressed concerns regarding HUD relying on
another agency's definition of FFRMS floodplains.
Several commenters said that HUD must ensure it is addressing
resident health and safety as well as economic-related flood disaster
relief in setting its floodplain determination, urging HUD to only rely
on another agency's designation of FFRMS floodplain where that agency's
methodology is at least as rigorous as HUD's; in other words, rely on
whichever generates the highest elevation and most expansive horizontal
floodplain. Another commenter similarly expressed concern for adopting
other agencies' floodplain policies because they believe that HUD's
proposed rule likely better protects wetlands. The commenter said that
HUD should not rely on other Federal agencies at a time when the
USACE's analysis for wetlands has changed through proposed rulemaking
and the Supreme Court case Sackett v. EPA \38\ regarding the definition
of ``waters of the United States.''
---------------------------------------------------------------------------

\38\ 598 U.S. 651 (2023).
---------------------------------------------------------------------------

Several commenters suggested that by not relying on FEMA's maps in
its

[[Page 30869]]

proposed rule, HUD is indicating that FEMA's maps cannot be relied
upon. Specifically, one commenter said the language that an interim or
preliminary FEMA map could not be used if it is lower than the current
FIRM or FIS indicates the FEMA maps cannot be relied upon for accurate
flood risk data.
HUD Response: HUD agrees that it should avoid relying on another
agency's definition of FFRMS floodplains. E.O. 13690 requires agencies
to utilize one of the processes (CISA, 0.2-percent-annual-chance flood
approach, FVA) based on best-available information and FIRMS from FEMA
to define the FFRMS floodplain.
HUD is looking for the most scientifically prudent elevation based
on available data that will provide protection of life, property, and
the Federal investment. Using the CISA approach, HUD's preferred
method, will likely result in the most protective elevation based on
scientific data compared to other methods.
HUD believes that FIRMs provide an accurate point in time snapshot
of flood risk. Unfortunately, these risks are continually changing and
given the time horizon for FIRM updates they may be generally less
accurate than HUD would prefer. The FFRMS approaches outlined in HUD's
final rule allow for greater protection in the face of changing needs
and uncertainty than a floodplain management approach solely based on
FEMA's mapped BFE boundary.
D. Question #4: What Factors or Stakeholder Needs HUD Should Consider
When Establishing an Effective Date for This Rule
1. Support for Extended Effective Date
Several commenters urged HUD to extend the effective date of
implementation to at least one year after issuing this rule to avoid
unforeseen expenses and delays for projects already in planning stages
because development planning often begins years prior to land
acquisition and formal planning processes. Of those commenters, several
raised concerns that absent extension, developers would bear
unequitable financial losses due to changes in land value purchased,
revisions to plans, and resulting delays.
One commenter specifically urged HUD to include a grandfathering
provision that would allow new Community Development Block Grants
(CDBG) and HOME Investment Partnerships Program (HOME) awards, as well
as FHA multi- and single family projects already under development and
applications submitted prior to the effective date to proceed under
current regulations. This commenter reasoned that if developers had to
repeat the lengthy planning, platting, and government approval process
for new development under changed regulations, they would be forced to
engage in more consultation, negotiation, and compromise among all
project stakeholders. This commenter added that the planning process
for FHA insured projects is particularly lengthy.
Several commenters urged HUD to consider stakeholders' need to
access the CISA maps prior to implementation, stating that it is
impossible to examine implications of the rule absent sufficient review
of the CISA method that the rule relies upon. Several commenters
suggested that stakeholders needed at least one year to access the CISA
maps prior to implementation. One commenter urged HUD to delay
implementation until the CISA maps are available and approved and asked
when HUD expected the tools will be made available.
Several other commenters went further, asking HUD to factor in time
to engage industry stakeholders in developing the CISA mapping tool
prior to implementing this rule. One commenter reasoned that improper
development of this tool, or reliance on problematic data, could
negatively impact industry stakeholders (e.g., developers, insurance
providers, floodplain mapping experts).
One commenter sought HUD's consideration that large public housing
authorities need time to determine the impact of the regulation on
costs of rehabilitation and repair, including a portfolio-wide review
of covered properties and a building-by-building analysis. This
commenter estimated that this review would take at least a year after
final rule issuance.
One commenter suggested that HUD consider the potential positive
result that proposed FHA mortgage requirements may incentivize
communities to adopt 2-foot freeboard standards matching the HUD
Minimum Property Standards, so that all development in special flood
hazard areas will maintain qualification for FHA-insured mortgages.
This commenter suggested that HUD extend the effective date for FHA
mortgage requirements by one year to allow this commenter and other
stakeholders to assist communities in updating their floodplain
management codes. For all other aspects of the rule, this commenter
urged HUD not to extend the effective date.
HUD Response: HUD appreciates the feedback from commenters
regarding concerns over ongoing projects incurring unforeseen expenses
and delays. As such, HUD is setting a delayed compliance period for the
rule. Compliance with this final rule is required no later than 30 days
after the rule becomes effective, except compliance with the amendments
to 24 CFR part 200 is required for new construction where building
permit applications are submitted on or after January 1, 2025, and
compliance with the amendments to 24 CFR part 55 is similarly required
no later than January 1, 2025, for FHA programs and programs subject to
the MAP Guide, as more thoroughly described in the Compliance Date
section of this final rule. This delayed compliance period will provide
regulated entities time to come into compliance with this rule,
including the portions of the rule implementing the Minimum Property
Standards. HUD believes this delayed compliance period will allow ample
time for project sponsors to prepare for any increased costs for
compliance with the rule. Additionally, HUD notes that projects
currently in development which have completed environmental reviews
would not be required to backtrack for compliance.
HUD disagrees that stakeholders require access to CISA maps prior
to implementation. After this rule becomes effective, CISA maps will
not be used if they are not available and actionable. The three-tiered
approach to define the FFRMS floodplain adopted by this rule will allow
responsible entities to utilize the best available data and tools in
their area to understand and mitigate their flood risk. As described in
Sec. 55.7, where State, Tribal, or local jurisdictions have already
invested in data and modeling and created CISA data and tools, HUD
permits the voluntary use of those tools if they result in an elevation
that is at least as high as the lowest of (1) the 0.2-percent-annual-
chance floodplain elevation; (2) the elevation that results from adding
an additional two feet to the base flood elevation; or (3) the
elevation required by paragraph (b) or (c) of Sec. 55.7, if CISA data
is available and actionable under paragraphs (b)(1) or (c)(1).
Federally assisted multifamily housing, especially housing for low-
income and vulnerable populations, including the public housing
portfolio, is currently in need of the additional flood mitigation and
resilience requirements the rule requires. The rule will ensure that as
properties undergo rehabilitation, flood mitigation and resilience will
be incorporated. HUD does not believe it is appropriate or necessary to
delay the implementation

[[Page 30870]]

of the part 55 update of this rule for additional study.
2. Support Implementing as Soon as Possible
Several commenters asked HUD to consider the urgent need to
mitigate loss of properties and lives, along with the health and
financial inequalities exacerbated by increasing flooding events,
citing statistics on projected increases in flooding and disparate
impacts of these events. Another commenter asserted that an effective
date no later than January 1, 2025, would provide ample time for
development stakeholders to prepare for implementation.
One commenter urged consideration of the number of HUD-supported
new construction and substantial improvement projects that will or will
not have enhanced resiliency and flood protections, depending on any
delays to implementing this rule.
Another commenter suggested that HUD should consider the regulatory
impact findings that the reduction in financial damages over the life
of the project is greater than the one-time construction cost increases
necessary for implementing the rule. This commentor also urged HUD to
consider its knowledge of these impending requirements since at least
2015 as a factor supporting prompt implementation, with an effective
date of no later than one year.
HUD's Response: After reviewing public comments, HUD has determined
to provide a delayed compliance period to allow entities regulated by
this rule a grace period to come into compliance with the revised
requirements. Compliance with the amendments to part 200 of this rule
is required for new construction where building permit applications are
submitted on or after January 1, 2025. This delay is intended to
provide home builders ample opportunity to adapt and prepare for the
requirements of this rule, including the increased elevation standards.
Compliance with the amendments to 24 CFR part 55 is similarly required
no later than January 1, 2025, for FHA programs and programs subject to
the MAP Guide, as more thoroughly described in the Compliance Date
section of this final rule. Compliance with all other parts of this
rule and for all other programs, except for those noted for parts 200
and 55, is required no later than 30 days after the rule becomes
effective.
3. Additional Considerations
One commenter suggested that HUD consider the Supreme Court's
decision on the Clean Water Act's definition of ``waters of the United
States'' in Sackett v. EPA.
HUD's Response: HUD appreciates the feedback from commenters;
however, HUD's definition of a wetland is unaffected by the Supreme
Court's ruling in Sackett vs. EPA because HUD's wetlands definition
originates from E.O. 11990, not from the Clean Water Act.
E. Question #5: Feedback on Exception Requiring the More Protective FVA
Approach for Coastal Areas
Several commenters continued to recommend the most protective
standard, supporting HUD's excepted use of the FVA standard in coastal
areas. One commenter reasoned that wave action, sea level rise, land
subsidence, warmer seas, and intensification of tropical storms/
hurricanes compound uncertainty in coastal areas. Another commenter
supported the higher standard to increase flood protection in areas
where the mapped floodplain may not accurately reflect risks from wave
action. Another commenter reasoned that the higher standard for coastal
areas is necessary due to particular vulnerabilities of coastal
communities to tidal flooding.
One commenter suggested that HUD's final rule should allow for the
flexibility to use the most protective and up to date science in
coastal regions or where higher quality data and analytics are
available.
One commenter asked about HUD's plan for renovations in order to
eventually have all projects in accordance with the new standards, and
what the projected date is to achieve that plan. The commenter also
asked, if there is no plan, whether one can be added to protect
sustainability of coastal projects.
Other commenters opposed the higher standard for coastal areas,
urging HUD to use a consistent approach in defining the FFRMS
floodplain. These commenters suggested that compliance is stronger when
the rules are consistently applied and easy to understand and
recommended the FVA approach in all circumstances.
HUD's Response: HUD appreciates the commenters' preferences
regarding the use of the most protective standard; however, HUD intends
to retain the three-tiered decision making process to define the FFRMS
floodplain as originally proposed to avoid complicating the process for
builders and grantees. While HUD certainly encourages grantees to use
the most protective approach where CISA isn't available or actionable,
the Department believes that requiring grantees to look at both the FVA
and 0.2-percent-annual-chance flood approach is unnecessary for
noncritical actions. Instead, HUD will require review of both 0.2-
percent-annual-chance flood approach and FVA to determine elevation
heights only for critical actions. HUD believes that CISA tools will
likely be available in coastal areas more quickly than inland locations
and as such, should help to better determine the effects of sea level
rise and wave heights for those structures.
HUD believes that a tiered approach with a preference for using
CISA, where possible, before considering the 0.2-percent-annual-chance
flood approach and/or FVA approaches, allows for the best outcome of
both protectiveness and functionality for HUD grantees and recipients.
It should also be noted that the Federal funding action is the
trigger for NEPA and part 55 compliance. Where a HUD-funded or -insured
action is proposed, an environmental review meeting part 55
requirements is required. HUD will not be enforcing these requirements
retroactively for projects with a completed environmental review.
F. Question #6: Feedback on Alternative Measures That May Help To
Promote the Production and Availability of Affordable Housing in the
Near-Term While Still Promoting Flood Resilience
1. Arguments That HUD's Proposed Rule Will Impede Affordability and
Housing Supply
Several commenters raised concerns that development restrictions
and/or increased costs to comply with proposed requirements would chill
interest and ability to develop, operate, or rehabilitate affordable
housing, resulting in higher rents and housing costs, limited ability
to borrow, and/or unattainable loans. Additionally, several commenters
stated that increased compliance costs will result in borrowers
deferring or foregoing repairs and upgrades to existing affordable
housing.
One commenter disagreed with HUD's projected construction costs,
asserting that HUD relied upon an outdated 2013 FEMA study, which fails
to account for inflated input prices, supply chain challenges, and
labor challenges. This commenter also questioned HUD's certification
that there is no significant economic impact on small entities, citing
that 88 percent of homebuilders and specialty contract firms are self-
employed independent contractors. The commenter provided its own survey
of builders, finding that elevating single-

[[Page 30871]]

family home to two feet above BFE would add $5-$10 thousand dollars to
cost of construction; and costs would be even higher where builders
prefer slab foundations due to humidity, which are more expensive to
elevate than homes on piers. Further, this commenter conducted the
following analysis of the impacts of cost increases on homeowners and
renters: a $1,000 increase in median home price would price 140,436
households out of the market; a $1,000 rent increase per unit would
price out an additional 32,289 renters.
Several commenters explained that elevation requirements would
cause increased transportation costs for soil import from certified
fill sites and earthwork and compacting costs of the additional fill.
Several commenters specifically identified the requirement to
maintain flood insurance as causing additional operating costs, which
will be passed along to residents in the form of higher rents and
housing costs. Several commenters stated that it is unlikely that
insurance costs for homeowners or multifamily owners will decrease
sufficiently to offset the increased construction costs, asserting that
HUD did not provide evidence that insurance costs will decline.
One commenter stated that limiting the current streamlined 203(k)
loan to $35,000 in renovations means that it may not be a lending
option for borrowers mandated to raise substantially damaged properties
to BFE +2 feet.
Several commenters noted that affordable multifamily building and
rehabilitation projects may be deferred, scaled back, or foregone where
increased costs cannot be offset by increased rent, preventing delivery
of needed housing supply. Several of these commenters reasoned that
there is a direct correlation between Federal housing policies
impacting housing supply and affordability and homebuilding
stakeholders' willingness to create affordable housing supply.
One commenter noted that underproduction of housing has translated
into higher housing costs, resulting in a decline in the number of
affordable units currently available. This commenter outlined
difficulties facing housing providers--narrow margins, ongoing labor
and material challenges, elevated regulatory costs--and cited recent
surveys indicating that 79 percent of developers reported construction
delays, with almost half citing project infeasibility as the cause.
One commenter stated that the proposed rule's floodplain expansion
will reduce opportunities to develop HUD projects in low-lying areas
and thus reduce housing for low-income families, who are in turn less
likely to be able to afford relocation.
HUD Response: HUD appreciates the commenters' feedback about their
concerns that additional elevation requirements could increase costs
and chill investment in future housing. HUD acknowledges that the
additional elevation requirements from the increased elevation
standards proposed to the Minimum Property Standards and the increased
regulatory footprint proposed in the part 55 update could have
additional costs associated with them. In the RIA, HUD found that the
increase in construction costs for new residential structures of
elevating an additional 2 feet above BFE would average between 0.3 and
4.8 percent of the building cost. HUD contends that the benefits of
protection provided by these mitigations are greater than the cost of
compliance. In fact, the RIA shows that the lower bound for losses
avoided based on the updated part 55 provides more than $50 million in
benefits even using the higher 7 percent discount rate. Federal
investment in the construction of multifamily and/or public housing in
riskier areas prone to flooding does not increase the availability of
safe affordable housing units. It is HUD's goal to disincentivize
continued Federal investment in high-risk flood-prone areas.
Short term market volatility in prices and labor is a poor
indicator for regulatory decisions and those factors are instead looked
at in aggregate over longer study periods. HUD reviewed the best
available studies and stands by the construction costs and potential
impacts on builders of all sizes as outlined in the RIA.
HUD strongly disagrees that elevation requirements would cause any
change in transportation costs for fill. In its rule, HUD is not
mandating how elevation is achieved; therefore, grantees are free to
utilize methods of elevation that do not involve fill. Additionally,
with the removal of the exemption for LOMRs based on fill, HUD is
actively discouraging its use as a method for elevation.
With this rule, HUD is not changing its requirements for
maintaining flood insurance, which are mandated by statute. Therefore,
HUD disagrees that utilizing existing requirements will increase
operating costs. HUD grantees have also always had the ability to
extend flood insurance requirements beyond those established as the
minimum by HUD. Additionally, HUD notes that HUD's encouragement for
the purchase of flood insurance outside the 1-percent-annual-chance
floodplain is not a requirement.
HUD has decided to remove the elevation requirement for substantial
improvement under the Minimum Property Standards to avoid adversely
impacting homeowners renovating existing single-family homes. While HUD
appreciates the commenter's feedback regarding 203(k) loans, Standard
203(k) financing allows a homeowner to finance improvements with an
insured mortgage that may be based on a loan-to-value ratio using 110
percent of after improved value of the property. Regarding Limited
203(k), on November 29, 2023, HUD published a draft Mortgagee Letter
(ML), Revisions to increase the Maximum Rehabilitation Costs for
Limited 203(k), Rehabilitation Period for both Standard and Limited
203(k), and Consultant Fees Schedule for the 203(k) Rehabilitation
Mortgage Insurance Program (Section 203(k) Program), for feedback on
the FHA's Office of Single Family Housing Drafting Table. The ML
proposes to expand the rehabilitation costs for Limited 203(k) from
$35,000 to $50,000 and to $75,000 for high cost areas.\39\
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\39\ The draft ML is available at <a href="https://www.hud.gov/program_offices/housing/sfh/SFH_policy_drafts">https://www.hud.gov/program_offices/housing/sfh/SFH_policy_drafts</a>.
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2. Arguments That HUD's Proposed Rule Will Improve Housing
Affordability
Several commenters asserted that property resilience investments
are necessary to increase affordable housing at individual and/or
government-wide levels.
Several commenters suggested that reduced property damage and
broader socio-economic costs (e.g., displacement) created by this rule
outweigh potentially increased construction costs for projects in
flood-prone areas, in turn increasing housing affordability. One
commenter cited evidence that the number of affordable housing units at
risk from coastal floods and sea level rise is expected to triple over
the next 30 years.
Several commenters stated that it is incorrect to measure the costs
of flood resilience requirements solely by increased construction
costs/home prices because the cost of homeownership also includes costs
to live in, maintain, and insure a home over time, especially homes
subject to recurrent natural disasters that may become uninhabitable
(and the broader cost of communities becoming uninhabitable).

[[Page 30872]]

Another commenter cited evidence that the savings benefits of
building to modern building codes come without negatively impacting
housing affordability, stating that no peer reviewed research finds
otherwise. This commenter cited findings that insurance savings from
meeting mitigation requirements can reduce homeowners' net monthly
mortgage and flood insurance costs by at least 5 percent, balanced
against about half a percentage point increase in home purchase price
for improvements to model resilience codes in an area affected by
riverine floods.
Another commenter suggested that the proposed rule mitigates
increased construction costs through its identification of practicable
alternatives and provision of technical assistance to help recipients
comply with new standards.
One commenter argued that disaster resiliency standards will lessen
reliance on HUD to rebuild and replace community assets damaged by
natural disasters, allowing HUD to prioritize programs that increase
the stock of affordable housing and availability of mortgage insurance.
This commenter provided examples of post-flood closures of multifamily
units precipitating negative shocks to local housing markets.
Several commenters pointed to jurisdictions and programs that
already require greater elevation standards and requirements than HUD
as demonstrating that stronger standards are feasible and cost-
effective.
One commenter urged that the demonstrated long-term financial
benefits of flood adaptation (citing a 6:1 benefit-cost ratio for HUD-
and FEMA-supported mitigation measures) should be extended to
affordable housing residents.
Another commenter supported measuring/scoring property-level risks
across the spectrum of environmental hazards, providing government and
private stakeholders with insight to balance the costs and benefits of
adding finely tuned/tailored resiliency measures to building codes.
HUD's Response: HUD appreciates the commenter's sentiment that
property resilience investment from the Federal level is necessary to
increase affordable housing. HUD agrees that the reduced property
damage and broader socioeconomic benefits created by this rule outweigh
the additional cost of compliance for flood-prone areas. This is even
more important in areas that may be affected by climate change.
HUD appreciates commenters' feedback regarding the measurement of
the cost of flood resilience. While HUD agrees that the cost of a
community becoming uninhabitable over time would have more devastating
effects than simply more expensive housing, it is unfortunately
difficult to quantify those consequences outside of their direct
economic impact. Generally, HUD agrees with the commenter's sentiment
that the savings benefits of modern building codes on housing outweigh
any impacts on housing affordability. HUD has previously and will
continue to help grantees review practicable alternatives when project
costs are too high to build due to elevation requirements.
HUD generally agrees with the commenter's feedback that the
increased resilience standards should help avoid damages from future
flood disasters and thus increase the longevity of new affordable
housing. HUD appreciates its local partners that have already
demonstrated the effectiveness and feasibility of higher standards in
their communities.
3. Suggested Revisions Commenters Believe Will Help Promote Affordable
Housing
One commenter suggested that HUD amend the rule to provide greater
financial flexibility to design and construction firms by quantifying
design/construction-related costs to achieve the FFRMS as deferred
maintenance instead of substantial improvements.
Another commenter suggested that HUD proactively target financial
and technical assistance to support low-income and historically
disadvantaged communities, stating that opportunities recently codified
by the Community Disaster Resilience Zones Act, Public Law No. 117-225
could be instrumental.
One commenter urged HUD to increase per unit maximums and provide
waivers where necessary (i.e., match requirements) to ensure that
communities in which the entire buildable area is within newly
designated floodplains do not confront such high costs as to
effectively cut off HUD funding.
One commenter urged HUD to revise the flood elevation measurement
for manufactured homes to be consistent with the site-built homes
measurement, to ensure that manufactured homes remain cost effective.
This commenter reasoned that expanding the supply of manufactured
housing is a crucial component of preserving affordable housing and
that a large number of manufactured homes are located on floodplains.
HUD's Response: HUD believes that for the purposes of compliance
with floodplain mitigation requirements under part 55, rehabilitation
needs to be considered substantial improvement when the costs are more
than 50 percent of the value of the structure and/or they include the
expansion of units by more than 20 percent. HUD notes that simply
because a project is considered a substantial improvement does not mean
that that project cannot move forward under the current part 55
requirements. Part 55 simply adds mitigation requirements to ensure
that the overall structure is more resilient. Even in communities where
large swaths of the buildable area fall into the regulatory floodplain
of concern, the requirements do not prohibit building; they require
mitigation to ensure new construction is safe. HUD notes that Sec.
55.21 also provides an alternative process for existing nonconforming
sites meeting specific thresholds for protectiveness to continue to
receive support and avoid cutting off existing communities from Federal
funding.
HUD agrees with the commenter's feedback that HUD funding programs
and technical assistance should benefit low-income and historically
disadvantaged communities. Such benefits are explicit requirements for
many HUD funding programs and are included in Goals 1 and 2 of HUD's
Strategic Plan: Support Underserved Communities and Ensure Access to
and Increase the Production of Affordable Housing.
HUD agrees with the commenter about consistent regulations and HUD
has and will continue to require that manufactured housing requirements
be consistent with those for stick-built homes with regards to part 55
elevation requirements. Under part 55, new siting and substantial
improvement of manufactured housing units (MHUs) are considered the
same as new construction and substantial improvement for stick-built
homes and therefore subject to the part 55 elevation requirements. To
clarify this policy, HUD has revised the rule language to reference
MHUs in the definitions for new construction and substantial
improvement.
Further, for both manufactured homes and stick-built homes subject
to part 55, to determine the lowest floor, HUD looks to FEMA's
regulations in 44 CFR 59.1 and FEMA's Elevation Certificate guidance or
other applicable current FEMA guidance. For manufactured homes in A
Zones, FEMA recommends measurement of MHU elevation from the I-beam as
a best practice. HUD recommends following FEMA best practice where
feasible. For manufactured homes in coastal high

[[Page 30873]]

hazard areas (Zone V), FEMA requires measurement of MHU elevation from
the bottom of the lowest horizontal structural member (e.g., the I-
beam).
It is important to note that FHA-insured single family housing is
not subject to part 55 and that FHA-insured manufactured housing is not
subject to part 55 or to the 24 CFR 200.926d elevation standards under
this final rule. Eligibility requirements, including elevation
standards, for FHA-insured manufactured housing can be found at 24 CFR
part 3285: Manufactured Home Installation Standards and 24 CFR 203.43f:
Eligibility of Mortgages Covering Manufactured Homes, as applicable,
which are outside the scope of this rulemaking. HUD understands that
the part 55 elevation requirements for MHUs differing from the FHA
insured MHU requirements may lead to confusion where HUD programs
subject to part 55 are installing MHUs. To address this, HUD intends to
release guidance and technical assistance material focused on these MHU
requirements which should help project sponsors and responsible
entities ensure compliant programs.
HUD agrees with commenters that wish to minimize the disruption to
the delivery of affordable housing. As such, after reviewing public
comments, HUD has determined to provide a delayed compliance period to
allow entities regulated by this rule a grace period to come into
compliance with the revised requirements. Compliance with the
amendments to part 200 of this rule, including the update to the
Minimum Property Standards, is required for new construction where
building permit applications are submitted on or after January 1, 2025.
This delay is intended to allow home builders and developers ample
opportunity to adapt and prepare for the requirements of this rule. For
FHA programs and programs subject to the MAP Guide, compliance with the
amendments to 24 CFR part 55 is similarly required no later than
January 1, 2025, as more thoroughly described in the Compliance Date
section of this rule. Compliance with all other parts of this rule and
for all other programs, except for those noted for parts 200 and 55, is
required no later than 30 days after the rule becomes effective.
4. Additional Suggestions To Promote Resilient and Affordable Housing
Several commenters urged HUD to pair efforts to make floodplain
housing more resilient with a focus on affordable housing development
outside of floodplains and solving how to accommodate growing housing
need as floodplain housing becomes increasingly uninhabitable. One
commenter reasoned that focusing affordable housing development outside
floodplains and wetlands will counter longtime exclusionary zoning
practices and direct scarce financial resources to building affordable
housing instead of mitigation activities. However, this commenter
stated that HUD should still fund rehabilitation of existing affordable
housing in floodplains through programs like Community Development
Block Grants for Disaster Recovery (CDBG-DR) to prevent displacement.
This commenter outlined their view of three root causes of the current
shortage of affordable housing--Congress consistently underfunding
housing subsidies; Congress's decade's long divestment in existing
public housing; and a severe lack of disaster housing resources and the
use of those limited funds for non-housing costs, and those funds
disproportionately benefit homeowners over renters. Another commenter
suggested that HUD proactively fund buyouts with relocation assistance
for persons living at properties that have experienced severe
repetitive losses.
One commenter urged HUD to take the following additional measures
to promote production and availability of affordable housing: (1)
require HUD CDBG-DR and Community Development Block Grants for
Mitigation (CDBG-MIT) grantees to rebuild public and affordable housing
on a one-for-one basis, deeply affordable in lower-risk areas and in a
manner that affirmatively furthers fair housing (AFFH); (2) ensure that
the right to return to communities is not conditioned on returning to
high-risk area; (3) ensure that grantees are using funding to redress
historical disinvestment in infrastructure--including flood protection
infrastructure--in low-income communities and communities of color; (4)
carry out Department AFFH obligations and ensure that HUD holds
grantees accountable for complying with civil rights obligations on
which Federal funding is conditioned; and (5) ensure that subsidies,
including Housing Assistance Payments (HAP) contracts, can be easily
transferred to new sites and require a new assessment before HAP
contracts are renewed following a flooding event.
Another commenter urged HUD to consider ways to expedite the
regulatory process for affordable housing projects, while ensuring they
follow proposed requirements.
HUD's Response: HUD appreciates the commenters' feedback regarding
making floodplain housing more resilient by encouraging development
outside the floodplain where feasible. The 8-step decision making
process does require project sponsors to consider alternatives to any
development plans in the floodplain. HUD encourages this alternatives
analysis to consider other more resilient sites located outside the
floodplain.
While HUD does not consider this rulemaking the appropriate place
to consider changes to disaster assistance funding or other HUD
programs, HUD appreciates the commenters' enthusiasm for Federal
assistance directed towards increasing affordable and resilient
housing. HUD notes that individual HUD programs may introduce program
specific guidance or policy to more efficiently implement FFRMS
requirements.
F. Question #7: Feedback on the Proposed FHA Single Family Minimum
Property Standards
A discussion of the comments received regarding the FHA single
family Minimum Property Standards can be found in this Public Comments
section of this final rule in the subsection titled Minimum Property
Standards for 1-4 unit residential structures.
G. Question #8: Whether Provisions of the Proposed Rule Will Redress,
Perpetuate, or Create Any Disproportionate Adverse Impact Against Any
Group Based on Race, National Origin, Color, Religion, Sex, Familial
Status, or Disability, as Well as How HUD Can Further Incorporate
Equity Considerations Into This Proposed Rule To Help HUD Meet Its
Affordable Housing and Community Development Mission
1. Proposed Rule Promotes Equity
Several commenters stated that the proposed rule's blended climate
and equity lens will contribute to redressing disproportionate adverse
impacts faced by protected classes; and that allowing communities of
color and low-income communities to endure elevated flood risk would
perpetuate systemic inequalities.
Several commenters specifically supported requiring inclusion of
environmental justice public engagement in the 8-step decision making
process. Several commenters added support for HUD's plan to issue
policy guidance on environmental justice.
Several commenters stated that replacing the misleading 1-percent-
annual-chance flood approach with the CISA approach will ensure more

[[Page 30874]]

accurate accounting for hazard risks to federally assisted housing. One
commenter explained that this is essential to promote wealth retention
in Black, Hispanic, Indigenous, and low-income communities harmed by
centuries of inequitable resource allocation and exposure to natural
and artificial hazards, including heightened exposure to hazardous
flooding and inequitable distribution of disaster aid.
HUD Response: HUD appreciates the commenter's feedback regarding
climate and equity. It is the Department's goal to fully implement the
goals and objectives of E.O. 14096, including to identify and address
disproportionate and adverse human health or environmental effects of
the Department's programs, policies, and activities on communities with
environmental justice concerns, while also working to be more
protective and promote resiliency to flooding. HUD agrees with the
commenter's sentiment that CISA should help to better account for and
reduce hazard risks to federally assisted housing. HUD also agrees that
housing is an essential component to generational wealth building and
that ensuring its resilience in the face of flooding helps communities
build into the future.
2. Proposed Rule Perpetuates or Creates Disproportionate Adverse
Impacts on Protected Classes
a. Inequities Perpetuated by Continued Development in High-Risk Areas
Several commenters raised concerns with provisions of the proposed
rule that they assert would perpetuate or create disproportionate
adverse impacts on protected classes, citing evidence showing the
following: a disproportionately high percentage of low-income,
minority, and other communities that are vulnerable to flooding live in
high-risk areas; communities of color face disparate adverse impacts of
flooding (both in rate of flooding and damage caused by flooding), as
well as face challenges with access to post-disaster resources and
rehabilitation. One commenter cited evidence that flood risk will
increase by 26 percent by midcentury and would be disproportionately
high for Black communities, with population growth in flood-prone areas
accounting for 75 percent of that increased risk (and 19 percent caused
by climate-related flood impacts).
Several commenters asserted that even with the administrative steps
of Sec. 55.20, the exemptions in part 55 allowing continued housing
development in high-risk areas will perpetuate and create
disproportionate adverse impacts on several protected classes of
people, especially considering that its primary application is
subsidized housing units. Several commenters noted that along with
placing residents in danger, this will cause HUD and other public
entities to spend limited resources on disaster recovery for all
citizens, taking away from investments in affordable housing and
programs to redress historical disparities. Several commenters cited
FEMA risk data that 32 percent of federally assisted housing stock (1.5
million housing units) is at high risk of negative impact for natural
hazards, compared to 24 percent of market rent homes and 14 percent of
owner-occupied homes. These commenters noted that underestimates in
FEMA's 1-percent-annual-chance flood hazard measurements mean that many
more federally assisted homes are at risk, which supports the need for
the new FFRMS standard to better assess risk. Another commenter
presented evidence on how maladaptation measures--such as new
infrastructure that cannot be improved without significant investment--
entrench inequities.
One commenter explained that racial disparities in flood
vulnerability are a direct result of local, State, and Federal
exclusionary policies and practices, perpetuated by this rule. This
commenter asked HUD to revise the 8-step decision making process to
directly account for historical patterns and practices of affordable
housing placement. This commenter caveated their response by adding
that HUD must continue to provide funding to rehabilitate and improve
the resilience of existing subsidized units in high-risk areas and
honor residents' right to return to prevent post-disaster displacement.
This commenter also emphasized that households with low incomes are
negatively impacted by flooding even if all mitigation and
floodproofing measures are taken. The commenter explained that flooding
damage takes a variety of forms such as the destruction of vehicles and
personal property, toxins spread by floodwaters, and disruption of
employment or childcare. As such, people with low incomes may
experience significant negative impacts from flooding that are not
related to damage to a housing unit. The commenter added that FEMA is
shifting resources away from ``small disasters,'' reducing the
resources available for replacing personal property, and that residents
of homes built in FFRMS floodplains will continue to be significantly
impacted even with the floodproofing and mitigation steps outlined in
this proposed rule.
Several commenters asserted the alternative processing for existing
nonconforming sites under Sec. 55.21 will perpetuate or exacerbate
inequalities. One commenter explained that exceptions are typically
granted based on the condition under Sec. 55.21(a)(1) that it's not
``practicable to transfer . . . under existing program rules, financial
limitations, and site availability,'' by relying on historical
discriminatory policies and practices that resulted in the
disproportionately high rates of affordable housing in the high-risk
locations. Providing two examples of HUD supporting development repair
in unsafe areas, this commenter argued that HUD cannot excuse its
obligation to redress discriminatory government policies and practices
because those policies have, for example, increased property values in
lower risk areas. Another commenter asserted that HUD failed to support
the existing non-conforming sites with evidence that the floodway and
adjacent areas will be safe over the next 20-40 years, also the
relevant term of years for several listed forms of HUD assistance. This
commenter referenced four HUD Inspector General reports finding
problems with HUD's assessment of environmental and health risks. This
commenter posed the following questions to HUD as important
considerations in understanding the impacts of this provision on
protected classes:
(1) Did HUD perform analysis on potential complete impacts related
to floodways?
(2) How will the floodway analysis occur on an individual site
basis?
(3) How is HUD projecting floodway expansion related to increased
atmospheric water vapor over coming decades?
(4) How will HUD use climate science to project floodways'
potential instability?
(5) How will HUD's site analysis consider climate-induced increase
in pluvial flooding?
(6) How will HUD's site analysis consider potential sea level and
associated groundwater rise?
(7) What is the universe of these floodway projects?
(8) What is HUD's estimate of how many HUD-assisted projects have
buildings in floodways?
(9) How many similar projects has HUD found with floodway impacts?
(10) What racial equity and environmental justice considerations
did HUD account for in drafting this provision?

[[Page 30875]]

(11) How will racial equity and environmental justice analysis
apply to individual sites?
Another commenter asked HUD to address its decision to allow public
housing residents to stay in or near a floodway in a rule acknowledging
the dangerous and increasing impacts of climate change.
Another commenter added that stronger protections would lessen
reliance on HUD to rebuild and replace community assets damaged by
natural disasters, which currently divert funds away from programs
targeting low-income families, aging populations, and persons with
disabilities.
HUD Response: HUD appreciates the commenter's concern that many
low-income communities and communities of color live in higher risk
areas in and around floodplains. HUD believes that this rule supports a
greater resilience within these communities to flooding and other
related disasters, thus avoiding loss of services during disasters and
any disparate adverse impacts. Resilient infrastructure helps to
counteract entrenched inequalities by providing communities with
resilient services through floods. HUD believes that a policy which
bars development in the FFRMS floodplain would be too restrictive and
have a significant negative impact on affordable housing availability.
By allowing limited development and requiring flood risk mitigation
equitably across the FFRMS floodplain through this rule, HUD believes
substantial risk reduction can occur without substantial impact on
housing affordability for all communities across the Nation who face
flood risk. HUD agrees with commenters that the FFRMS standard is
needed to better assess risk for Federal projects.
Separate from this rulemaking, a critical part of HUD's mission is
to fully implement the Fair Housing Act, which not only prohibits
discrimination but also directs HUD to ensure that the Department and
its program participants proactively take meaningful actions to
overcome patterns of segregation, promote fair housing choice,
eliminate disparities in housing-related opportunities, and foster
inclusive communities that are free from discrimination. In keeping
with this mission, HUD also notes that under the new rule, Sec.
55.20(b)(4) requires that any activity in a community with
environmental justice concerns must coordinate its consultation and
decision making from Sec. Sec. 50.4(l) and 58.5(j). HUD disagrees that
this rule perpetuates exclusionary po

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