In the Know: How many of you are going to pay a lot more for flood insurance? And who just paid $44.3 million for a mobile home park?

A few times earlier this year, we first warned those of you in flood zones that noticeably higher insurance bills were going to be flowing your way.

Now, with what's known as Risk Rating 2.0, more real numbers are starting to dribble out. The National Flood Insurance Program, also referred to as NFIP, is updating its half-century-old structure that it says has allowed too many policyholders to underpay.

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"Risk Rating 2.0 was done to create a more fair and equitable rate structure and to place the NFIP on a path towards financial sustainability," said Chris Heidrick, founder of Sanibel's Heidrick & Co. "I think this is the right path. Clearly a change of this magnitude will have some implementation issues."

A number of flood zoners will indeed pay more. But, as it turns out, a few actually are receiving a reduction.

"The inequities in the old rate structure caused some policyholders to pay more than they should and some to pay less so those that were paying more are receiving decreases, and some are substantial," Heidrick told me this past week.

Six percent in Collier County and nearly 9% in Lee will write smaller checks to the NFIP programs. In Lee, 1.1% will save at least $100 monthly while it's a half percent in Collier, according to public records.

On the other end, about 2% in both counties will pay at least $30 more a month but most overall in Southwest Florida's flood zones will dole out less than $10 additional each month.

What FEMA is trying to do is put more responsibility on those choosing to live in flood zones, and it says it has much better technology and sophisticated data analysis to figure it out better than it did in the 1970s.

The nonprofit First Street Foundation says the concept, which dates back a few years, is to make sure folks facing the greatest threat pay more of a fair share than the past when those in less jeopardy and taxpayers often got stuck with too much of the bill.

For example, in 2017, Congress bailed out the NFIP with $16 billion in debt relief, leaving the ultimate cost of hurricanes Katrina, Sandy, Harvey and Irma on the books of the American taxpayer, according to Matthew Eby, director of First Street, which conducted its own insurance study.

‘5 decades of mispriced insurance’

Now FEMA is trying to "compensate for five decades of mispriced insurance," Eby said.

For some, the increases will continue for years to come, with a maximum annual jump capped at 18% a year for NFIP policy holders until they reach what is known as the "Full Risk Premium" — the amount FEMA feels they should actually be paying.

And even then, quite a few of them will still be getting a bargain as long as they stay in the NFIP program.

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"Don’t let the policy lapse or leave the NFIP," Heidrick said. "Even if a flood policy from a private insurer is less expensive, an NFIP policyholder who leaves and then wants to return at some point in the future will lose their 'glidepath' and will receive the Full Risk Rate when they return."

Heidrick has had more inside knowledge on this particular subject than most on the planet as chair of the Flood Insurance Sub-committee for the Independent Insurance Agents and Brokers of America. Having worked closely with FEMA on this topic, he had been under a non-disclosure agreement, and now has plenty of examples and scenarios.

"Seller is currently paying $1,000 for their (annual) NFIP policy. The Full Risk Premium is $4,000. After five years of 18% increases, the premium is now about $2,300. We’ll assume the Full Risk Premium has not changed, though in reality it, too, will increase each year," he said. "The full premium for a new NFIP policy can be 100% to 1,000% higher than it would have been under the old rate structure."

Even then, the kind of mansion buyers Collier is attracting aren't going to prevent them from shopping for a fancy spread, regardless of cost, real estate brokerage CEO Phil Wood has told me. Those folks will simply self-insure.

And as real estate agent Dennis Bowers has pointed out to me, many new local homeowners are coming from places with higher costs of living or taxes. Weighing other savings, the insurance wouldn't seem to be as much of a burden, he said.

Call it what you want, but there's still a little bit of a loophole for newbies, too.

‘Rate shock’

"Federal law currently allows a policyholder to 'assign' a flood policy to a new buyer of the home. This would protect the current owner against a sudden impact to market value by allowing the new buyer to continue on the seller’s glidepath to the actuarially correct premium," Heidrick said. "The worst impacts are being felt by new home buyers where the seller does not have an NFIP policy in place."

Without that, would-be new policyholders began facing the much higher rates 10 days ago.

Heidrick had another example: "The seller is currently paying a $676 premium for their NFIP policy. The buyer’s premium, based off the seller’s policy, is $782. However, if the seller did not have an NFIP flood policy, the premium would have been over $8,000. This is an extreme example, but it is also a real one."

Heidrick is concerned about the "rate-shock" brought on by the more rarer cases.

"The worst-case examples are the ones that will be presented to elected officials and the media," he said. "Clearly there are some people who will be more heavily impacted by the new premiums than others. In my opinion, the answer is a means-tested affordability program to help those property owners who need it rather than going back to the old rate structure that was created in the 1970’s and was fraught with inequities."

How about just not living in a flood zone?

"While some may argue that a homeowner can simply choose to live elsewhere, that is not always the case," Heidrick said. "Many communities were built near the water many, many years ago as the water offered a means of transportation. It is not realistic to think these communities would simply be abandoned.

"These communities still need first-responders and teachers and may depend on industries that require proximity to the water. The people who fill these jobs may need some form of assistance, but it should be outside of the NFIP rate structure."

Until the creation of the homestead exemption, some Floridians were having to sell their homes because the taxes became unaffordable. Couldn't the same thing happen with the rising insurance rates?

"I don’t see this as a pervasive problem," Heidrick said, because of the 18% annual cap. "Recognizing this risk though, some members of Congress have discussed reducing the statutory cap on premium increases. Reduction of that cap will go a long way to addressing this problem."

For now, though, "existing NFIP policyholders are not yet seeing any impact," he said.

That, unfortunately for some, begins happening on April Fools Day 2022.

$44.3 million for a mobile home park

It wasn't easy tracking who just paid $44.3 million for the Tropicana mobile home park on McGregor Boulevard near Summerlin Road intersection and not far from the Sanibel causeway. At least, that was an old name prior to using today's term of manufactured housing community. In some legal descriptions, it's also known as Tropicana Mobile Manor.

Like an Aston Martin car chase in a James Bond movie with that fast-moving electric guitar riff, In the Know dodged LLC and lawyer roadblocks from coast to coast and up and down I-95, from the Caloosahatchee to San Francisco's South Financial District, from Biscayne Bay to the towering skyscrapers of Midtown Manhattan.

Who came to my rescue?

Why, none other than Goldfinger, but no relation to the powerful Shirley Bassey rendition of the movie title song nor the 1964 Bond flick nemesis who first encounters Sean Connery on the pool deck of the iconic Fontainebleau Miami Beach.

In this case, it's retired Jersey Shore cardiologist and author Paul Goldfinger, who graduated first in his class at the George Washington University School of Medicine. With his co-author and food writing wife, Eileen, a retired teacher, they began documenting life and adventures nearly a decade ago at Tropicana through a blog.

He first mentioned the leveraged buyout kings, The Carlyle Group, and then it was a matter of following the behemoth's shadow through other digital correspondence and platforms related to the park.

It seemed it would take more than a fishing rod to land this whale and confirm it. Carlyle has $276 billion in assets under management. That's a big fish. What would Bond do? Well, never mind on that. Boss wouldn't go for another gratuitous Connery reference, even in light of the weekend’s highly anticipated new 007 film release.

Instead, In the Know matched the address of the newly founded Tropicana Owner LLC and other related freshly established entities to the 555 Mission Building in San Fran, where the private equity company inhabits top floors of the 33-story super structure. And its go-to law firm on acquisitions played its usual role on this.

Big dogs on the prowl

Certainly, it was going to be tough to keep this one a secret anyway when company representatives have been meeting with many residents of the coop and the 470-lot community. They were promised it wouldn't be sold from under them, and they wouldn't have to move, which has happened in other cases around here.

But we can't know for sure. Organizations involved or their representatives wouldn't comment.

At the same time, Carlyle's affiliates have made purchases like this in the past including Citrus Park in Bonita Springs in 2019, and the Financial Times last year named them at the forefront of this buying craze. It noted that institutional investors accounted for 17% of the $4 billion in this sector's transactions in 2018, up from 9% in 2013.

"Mobile and manufactured home parks have become a highly popular asset class for institutional real estate investors," said Southwest Florida real estate appraiser and broker Matt Simmons, managing partner at Maxwell, Hendry & Simmons. "A property like that is really all about cash flow. People own their individual homes, but the lots are mostly owned by the park owner, and they collect lot rent from the residents."

Simmons told me it's become a good alternative for investments.

"One of the reasons that the mobile/manufactured home asset class has become popular in recent years is the stiff competition that exists in other areas of residential rental investment, like multi-family apartment housing," he said, noting the rising prices. That "escalation and significant demand from buyers for apartments has caused some investors to look for alternative rental housing investment options."

And some of these big dogs are sniffing out the communities first, as it appears with Tropicana.

"This is a new and unique sort of event for these manufactured home parks," Goldfinger told me. "I got an email this past week from the treasurer of a park in Central Florida, which also received an unsolicited inquiry. He had lots of questions about the process."

‘A total pipedream’

Simmons gets it.

"One of the reasons we’re seeing a flurry of transactional activity is simply a result of how much money is floating out there to be invested. There is far more money chasing deals than deals to be chased," he said. "If you’re a multi-family investor who’s bullish on Southwest Florida, many of the same metrics that would drive your decision to invest in an apartment project are also applicable to a mobile/manufactured home park."

It's not a tough adjustment and "a relatively easy transition," Simmons said.

"A park like Tropicana is a good example of an alternative," he said. "An investor (can) take that same market knowledge and apply it to a sector that has less competition and has traditionally been overlooked. Parks like this, if run well, can be incredibly profitable."

A biggie is that you can't duplicate these communities.

"Parks like these are essentially grandfathered from the standpoint of their legal permissibility. If the land Tropicana sits on was vacant, you’d never be able to go in and recreate this. (Just the) zoning process (alone) would make creating a project like this a total pipedream," Simmons said. It's "a scarce asset with an added layer of protection from competition. That’s another benefit (an) apartment developer doesn’t possess."

Based at the Naples Daily News, Columnist Phil Fernandez (pfernandez@gannett.com) writes In the Know as part of the USA TODAY NETWORK. Support Democracy and subscribe to a newspaper.