BESSEMER, Ala. (AP) - Prices for government-backed flood insurance are on the rise, and homeowners in Lee Cole's urban neighborhood will feel the pinch.
Cole has spent decades in the Pipe Shop area of Bessemer, a low-income neighborhood bordered by Valley Creek and crisscrossed with small streams and ditches. The name comes from the nearby pipe factory and old steel mills where blue-collar residents worked for generations near Birmingham.
Statistics from the Federal Emergency Management Agency reviewed by The Associated Press show that 81 percent of Bessemer's 255 flood insurance policyholders are facing annual price hikes of up to 25 percent. Increases for most of those 207 policies, all of which are subsidized by the government, would be capped at 18 percent annually, although some would pay the higher amount.
That's the highest share of price hikes for any place in Alabama with at least 100 flood policies in effect, worse even than in touristy beach towns that get slammed by hurricanes every few years.
Officials say many of those Bessemer residents who will receive higher bills live in the Pipe Shop neighborhood, where Cole has seen floodwaters reach rooftops.
"They'd have to use boats to get people out of their houses," said Cole, leaning on his pickup truck outside a wood-frame house that resembles dozens more in the area. Years after the last flood, dark water lines still stain the sides of some.
Retiree Arthur Dow lives in a flood plain just a couple of blocks from the creek but lacks flood insurance. Dow says he can't afford it now, and premium hikes will put the coverage even further out of reach.
"The prices just keep going up," he said.
Congress set the stage for large rate hikes two years ago, when it tried to rid the National Flood Insurance Program of $24 billion in debt.
Rate increases were capped at 10 percent a year before 2012. But changes to the law allowed rate increases of as much as 25 percent annually for policyholders who had repeat flooding and hadn't had a survey to determine the real risk to their property.
The stepped increases in premiums are the result of a law passed to alleviate even sharper price hikes.
Statewide, FEMA statistics show that 8,540 flood insurance policies - 15 percent of the state total - could go up as much as 25 percent because of the change.
About $12.4 billion worth of policies were in force at the end of 2013 in the state, costing the holders about $38.2 million annually. Twenty cities or unincorporated sections of counties have at least 100 subsidized flood insurance policies in effect. Those include the large metro areas of Birmingham, Huntsville, Mobile and Montgomery, plus smaller cities Tuscaloosa, Gadsden and Selma.
Coastal towns like Gulf Shores, Orange Beach and Dauphin Island also have hundreds of pieces of property covered by subsidized flood policies, but a greater percentage of vacation homes are covered by the policies there than in inland cities like Bessemer.
In Gulf Shores, for example, 13 percent of policies are subsidized and could be hit with rate hikes of as much as 25 percent, a far smaller share than in Bessemer, where income levels are far lower than in tourist hot spots. Also, many of the homes in Gulf Shores are built on stilts to reduce the threat of flooding, while at-risk homes in Bessemer are typically built with a crawl space at most, leaving them low to the ground.
The city engineer in Bessemer, Ron Gilbert, said at least two sections of the city of roughly 27,000 people are in flood zones.
"I'm afraid a lot of people aren't going to be aware of it until it hits them," he said.
In the Pipe Shop district, Cole has little doubt what price increases would mean for residents.
"They won't be able to afford it. They'll go without it," he said.