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Hovnanian Builds in Flood-Zone
Thursday, 22 October 2009

Hovnanian Awash in Flood-Zone Problems
Permits for home construction in a Sacramento flood zone are causing quite the headache for builder Hovnanian Enterprises — and, possibly, some of its buyers.  Hovnanian received permits for 35 homes in its Westshore development, but the rather appropriately named Dan Waters — the son of a Sacramento councilman — allegedly overrode a computer system to allow construction within the Natomas flood zone, the Sacramento Bee in California  reports... Four homes have already been sold — with people living in them — and eight are in escrow,

Hovnanian Awash in Flood-Zone Problems
By Dawn Wotapka

Permits for home construction in a Sacramento flood zone are causing quite the headache for builder Hovnanian Enterprises — and, possibly, some of its buyers.

Hovnanian received permits for 35 homes in its Westshore development, but the rather appropriately named Dan Waters — the son of a Sacramento councilman — allegedly overrode a computer system to allow construction within the Natomas flood zone, the Sacramento Bee in California reports.

But that appears to violate a federally mandated building ban and work has been halted. The problem: Four homes have already been sold — with people living in them — and eight are in escrow, the paper reports. It’s unclear what will happen to the current residents.

New Jersey-based Hovnanian, the nation’s sixth-largest builder by 2008 closings, declined to comment.

The developments sparked a Federal Emergency Management Agency inquiry and an internal investigation by city officials. There’s also concern the federal government could downgrade the city’s flood prevention rating, which could lead to higher flood insurance rates.

According the Bee, federal regulations barred issuing building permits for new homes after Dec. 8, 2008, unless they were elevated 33 feet to prevent flood issues. Hovnanian received the permits prior to the building ban, but it requested in April that they be switched to better lots, the paper reports. Transferring permits is not allowed under city code.

“There were overrides made on these permits,” Bill Thomas, head of the Community Development Department, is quoted as saying. “The computer says wait, it’s in a FEMA zone and you have to trick the computer to go around that.”

The Sacramento Bee reported Tuesday afternoon that Messrs. Thomas and Waters were placed on paid leave.

http://blogs.wsj.com/developments/2009/10/20/hovnanian-awash-in-flood-zone-problems/

 
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