NFIP at a Crossroads: Rethinking Flood Risk Governance in an Era of Deregulation and Decentralization

The National Flood Insurance Program (NFIP) could be entering a period of profound transition. Long defined by significant federal oversight, detailed regulatory frameworks, and program delivery governed by the Federal Emergency Management Agency (FEMA), the NFIP now sits at the intersection of two powerful forces: a federal push toward deregulation and a broader shift of authority and program delivery to state and local governments.

Taken together, these trends could signal a fundamental rethinking of how flood risk is assessed, managed, and financed across the United States. 

Recent developments—including leadership changes at the federal level and the conclusion of the FEMA Review Council—have accelerated the momentum for reform of various programs related to flood risk management, disaster grant funding, and mitigation programs. The Council’s findings reinforce FEMA’s core strengths in funding and financial support but also highlight opportunities to give states and local governments primary responsibility for natural hazard resilience with the federal government in a supporting role. 

Historically, the NFIP has operated as a federally-driven program, with FEMA providing: 

• Detailed regulatory standards (e.g., 44 CFR §60.3) 
• Flood hazard mapping via Flood Insurance Rate Maps 
• Enforcement of compliance and program participation  
• Oversight of more than 22,000 participating communities 

This model has delivered national consistency—but may have been limiting to state-level flexibility and local customization. Now we’re seeing a push towards a structural shift from top-down to bottom-up. What could emerge is a locally customized and implemented, state-led, federally supported paradigm being driven by two significant forces: deregulation and shifting authorities to states. 

Driver #1: Deregulation and Statutory Alignment 

One of the most consequential forces behind this shift is the growing emphasis on regulatory simplification and statutory alignment. For decades, federal agencies operated under legal “deference” in interpreting statutes into regulations. However, recent legal and policy developments have challenged that paradigm, prompting a reassessment of whether existing regulations truly align with congressional intent. 

The implications are significant: 

• Regulations not clearly grounded in statute may be subject to revision or repeal 
• Agencies are being directed to review and potentially eliminate rules deemed to be overreaching 
• Executive actions have also called for the acceleration of deregulation timelines 

Within the NFIP, this raises important questions. A review of program components suggests that many regulatory elements—particularly those governing mapping and land use requirements—may not fully align with statutory language. If pursued, statutory realignment could: 

• Simplify program requirements 
• Reduce administrative burden 
• Alter how flood risk data is created, updated, and delivered to end-users 
• Redefine minimum floodplain management standards 

This is not merely a technical exercise—it is a potential reshaping of the program’s foundation. 

Driver #2: Shifting Authority to States 

In parallel, federal policy trends are increasingly favoring state- and locally driven implementation. Recent signals include: 

• Reduced federal prescriptiveness in resilience and preparedness programs 
• Greater flexibility (and responsibility) for state-level decision-making 
• Streamlining or elimination of certain federal planning and technical assistance support 
• Emphasis on “partners who deliver” at the state and local level 

By devolving authority, the federal government is effectively betting on increased innovation at the state level, more responsive and context-sensitive decision-making, and stronger alignment between land use and risk. However, it also introduces variability—and potential inequities—in outcomes across jurisdictions. 

What Could the Future NFIP Look Like? 

While uncertainty remains, a plausible future NFIP begins to take shape. Today’s model follows a standard where the federal government (FEMA) sets detailed standards and controls implementation, produces and maintains flood maps, monitors compliance, and offers two main incentives: insurance access and grant funding.  

One potential future of the NFIP is one where FEMA retains its core statutory authorities of identifying flood-prone areas and assessing adequacy of floodplain management standards on the state and local levels, and realigns states and communities as the leaders in implementation and customization. Flood risk data becomes a central federal asset that is broadly accessible and the system relies more heavily on financial incentives from the federal level. 

Risks and Opportunities 

This potential direction of the NFIP presents a complex blend of opportunity and uncertainty for states, communities, and flood resilience stakeholders. If this potential future becomes reality, many states may find themselves with increased flexibility, but also with significantly greater accountability if regulatory structures shift and responsibilities become more decentralized. A move toward state-led and locally customized flood risk management opens the door to more tailored, context-sensitive solutions that reflect local priorities, development pressures, and risk tolerances. At the same time, it introduces real challenges, particularly for states and jurisdictions with limited technical capacity, constrained resources, or less experience managing flood risk programs at scale. 

This potential transition is not simply about doing less at the federal level—it is about doing things differently across all levels of government. States may need to stand up or expand programs that were previously federally driven, from flood hazard mapping and data management to regulatory enforcement and resilience planning. Communities, in turn, may face new expectations around land-use decisions, mitigation investments, and risk communication. Meanwhile, variability in how different states interpret and implement these responsibilities could lead to uneven outcomes, with implications for equity, insurance markets, and long-term resilience.  

In this environment, the ability to navigate change proactively becomes a defining advantage.

As the NFIP continues to evolve, states, communities, and floodplain management professionals will need to closely monitor policy developments and be prepared to adapt to changing roles and responsibilities. While the ultimate direction of reform remains uncertain, the decisions made in the coming years could have significant implications for flood risk management, insurance availability, and community resilience nationwide.

Regardless of the path forward, effective collaboration among federal, state, and local partners will remain essential to ensuring that communities have the tools, resources, and information needed to understand and reduce flood risk.

About the Authors

Jennifer Marcy is the National Flood Risk Management Practice Director for AtkinsRéalis has over 20 years of experience working with federal, state, and local floodplain management authorities, and professional organizations on all aspects of National Flood Insurance Program (NFIP) implementation. She understands Federal, state, and local floodplain management programs, and has worked with FEMA to implement program improvements associated with the NFIP. This includes NFIP implementation and capability building nationwide, the promotion of higher regulatory standards, and other floodplain management programmatic and technical support.

Celinda Adair is the National Lead for Flood Risk Solutions for AtkinsRéalis. She has 18 years of experience in floodplain management, CRS, outreach and training, community planning, federal and state grant support, and hazard mitigation. She is a former State NFIP Coordinator for the State of Oregon, FEMA Risk MAP program coordinator for the State of Montana, and CRS Coordinator and Planner for Thurston County, Washington (a Class 2 CRS community).