No Minnesota community has been affected more by the nationwide spike in flood insurance premiums than the far northwestern city of Roseau, where the specter of rates rising by as much as $400 a month has just about dried up the local housing market.
In the town of 2,600 residents, where the leading employer Polaris Industries is hiring, the real estate market should be booming.
Nearly the entire community lies within the Roseau River flood plain, hard-hit by a major flood in 2002, so mortgage lenders require purchasers to take out flood insurance. Last fall, people shopping for flood insurance and holders of policies coming up for renewal started getting premium quotes of $3,000 to $4,000 a year or more.
"The market's at a standstill," Roseau mortgage consultant Andy Jensen said.
After howls of protests, President Barack Obama signed a law Friday putting brakes on the 2012 overhaul of the federal flood insurance program that ended government subsidies for flood insurance and led to the immediate spike in premiums that have hit Roseau so hard.
But while the law offers instant relief for homeowners hit by premiums that soared overnight, for many the reprieve is temporary, including those in Roseau.
In Minnesota, some 947 owners of businesses and second homes are still facing premium increases of 25 percent a year until they give up their subsidies and start paying rates based on actual flood risks, according Federal Emergency Management Agency data compiled by The Associated Press.
Another 2,520 home and residential building owners could see rate increases of up to 18 percent per year.
Of those, 241 are located in Roseau - more than any other Minnesota city, according to the FEMA data.
Jake Ost and his wife, who are expecting their first child, found out quickly they couldn't afford a home anywhere in Roseau's flood zone. They made an offer on a house they really liked, and then found out the flood insurance premiums could reach $4,000 annually.
But they were lucky, finding their dream home three miles outside of town on higher ground above the flood plain - a log house on a big lot where deer like to roam that's right on the Roseau River.
"Everything happens for a reason," Ost said.
Their real estate agent, Bob Brellenthin, said many families have been priced out of the market.
"I've had three deals blow up, to the tune of quite a bit of commissions that we did not receive, because we could not finalize the deal," he said.
Roseau is pinning its hopes on two things. First is the change to the 2012 law that Obama signed last week. It rolls back the instant increases, capping them at 18 percent annually for most homes.
More important is a flood diversion project due for completion in fall 2015. Flood insurance requirements will be eliminated for nearly the entire city once FEMA certifies the finished work, said Todd Peterson, Roseau's community development coordinator. But that could take another year, he said.
Relief could come sooner for Crookston, a city of about 7,900 on the Red Lake River, which recently completed its levee system. Once FEMA signs off, only about a dozen homes will be subject to the higher rates, city building official Matt Johnson said.
But Crookston real estate agent Shirley Iverson said the high premiums came as a "total surprise" to a lot of longtime owners who want to sell now and remain stuck, at a competitive disadvantage against homes outside the flood plain, she said.
Except for the premium phase-in, no relief is in sight for the southwestern city of Worthington, where 158 homes and businesses will see higher bills. A flood control plan for the city of nearly 13,000 is still in the planning stages and could cost $5 million.
City Engineer Dwayne Haffield said about 10 percent of its homes sit in a shallow depression that doesn't drain well, so they're at risk of basement flooding from heavy rain. The premium spike has made it harder to sell houses in that area, he said, and those costs are being reflected in lower property values.